Q27

Some construction projects suffer from budget overruns and late completion.
Discuss possible reasons for these problems and measures that could be taken to
avoid their recurrence on other projects.
Civil engineering projects inevitably contain a large number of unknown factors, such as
the nature of the ground and the unpredictability of the weather. These factors can
often lead to delays and budget overruns. However, whilst bad luck may account for the
poor performance of some projects, most delays and cost overruns could be avoided by
ensuring that adequate planning is undertaken and good communications are maintained
between all parties.
Perhaps the most common source of delays and increased project cost is unforeseen
conditions. This is usually associated with ground conditions. Unforeseen conditions can
result in very significant delays to the construction programme if a section of the works
has to be redesigned, or the contractors progress is slower than envisaged.
Under traditional forms of contract, such as the I.C.E. 6 th Edition, the responsibility for
risks arising from unforeseen conditions is allocated solely to the Client. Therefore, any
additional cost, either directly incurred or resulting from delays, must be borne by the
Client rather than the Contractor. This situation can be avoided by the adoption of a
design and build form of contract, which allocates the risk to the Contractor. This may
be more appropriate in many circumstances, as the Contractor is often in the best
position to manage unforeseen events as they arise.
However, the ideal solution would be to avoid or reduce the occurrence of such events in
the first place. This can only be achieved if adequate site investigations are undertaken
before construction work commences. Too often, insufficient money is made available at
the start of a project, meaning that the site investigations are limited in scope. This
inevitably causes problems during the construction phase of the project. In addition, it
is also essential to carry out an in depth study to identify the locations of any services
within the area. If services can be located at an early stage, they can be diverted
before they cause disruption and delays to the construction work.
Variations to the design during the construction stage are another common cause of
delay and budget overruns. Such variations can often mean that the Contractor has to

change his working methods, hire new plant or order different materials.

This is in

addition to the length of time required to actually undertake the redesign.

The potential significance of variations was highlighted during my secondment to Taylor
Woodrow Civil Engineering Limited and the contract to refurbish the Thames Tunnel in
London. On the day that construction work started, a Grade 2* listing was allocated to
the tunnel. This resulted in the major changes to the design of the works, which in turn
caused the project to be delayed by 18 months and costs to rise from 6.1m to over
20m.
In many cases, variations could be avoided by planning the works properly during the
design stage.

The designer must ensure that all alternative solutions have been

evaluated during the feasibility study. This should ensure that the best solution is taken
forward to detailed design. Processes such as value engineering and design reviews can
often help to ensure that this goal is achieved. It is also essential that the designer
receives a clear brief from the Client. If this is not achieved then variations are likely
to arise during construction to ensure that the Clients long-term requirements are
satisfied.
Many recent projects have also suffered significant delays due to demonstrations by
environmental pressure groups and concerned members of the public, e.g. Newbury
Bypass and Manchester Airport, amongst others. These demonstrations have prevented
construction work from commencing and necessitated the spending of millions of pounds
on security to protect the sites and workers.
Whilst it would probably be impossible to satisfy the environmental concerns of all
parties, the occurrence of such demonstrations could be significantly reduced by
ensuring that environmental factors are given a high priority during the design process.
Consultations with the public and any interested parties could also play a very important
part in demonstrating that projects are as environmentally friendly as possible.
The confrontational nature of some forms of contract can also lead to delays and
escalating project costs.

For example, in the Report Constructing the Team, Sir

Michael Latham suggested that many of the traditional forms of contract are naturally
adversarial, often propagating disputes rather than assisting in their resolution. Any

form of dispute between the parties to a civil engineering contract is likely to cause a
delay, with associated costs. If legal proceedings result from the dispute, those delays
and costs can be very significant.
Latham has recommended that this can be overcome by adopting some of the newer, less
adversarial, forms of contract, such as the Engineering and Construction Contract. In
addition, the Housing Grants, Construction and Regeneration Act, 1996, has introduced
the requirement for all forms of contract to include provisions for adjudication. This is
a much quicker, and less expensive, process than arbitration or conciliation.
Adjudication should therefore assist in reducing time and budget overruns, if properly
applied.
The method of evaluating tenders and criteria for awarding contracts can also result in
delays and significant additional costs during construction. Traditionally, construction
contracts have been awarded to the lowest bidder, with little importance placed on
quality or experience of the contractor. A better way of awarding contracts would be to
assess tenders on a value for money basis, or to include factors such as competence,
safety record and Quality Assurance in the evaluation process.

This would help to

ensure that the winning contractor is capable of performing the work satisfactorily,
whilst providing greater assurance that the Client will be handed a quality product, on
time.
Many delays and costs are also caused by poor supervision and management of
construction work on site. Potentially, inadequate supervision could result in incorrect
setting out or unacceptable build quality, either one requiring demolition and rebuilding
of a structure.

This can be overcome by ensuring that contractors have certified

Quality Assurance systems in place on site. Regular audits can be carried out by the
Resident Engineer to ensure that those systems are being properly applied.
Poor management and planning of construction works can lead to inefficient methods and
procedures being employed during construction. This inevitably causes delays to the
project programme. These delays could be avoided by using experienced members of
staff in key positions and ensuring that all staff have adequate training to carry out
their duties effectively.

In addition, good internal communication within the contractors organisation is also

essential for an efficient site.

This can be achieved by setting up the lines of

communication at the start of construction work, having regular site meetings to discuss
progress and resolve problems, and adequate circulation of documents such as Method
Statements. Developing a good working relationship with the Resident Engineer will also
play a critical part in ensuring that the work runs smoothly and is completed on time and
to budget.
To conclude, there are a wide variety of reasons for projects being delayed or running
over budget. Occasionally, such problems can be blamed on bad luck. However, in most
instances the delays and additional costs could have been avoided if appropriate
measures had been implemented. In addition, the source of these overruns can be the
designer, contractor or client. It is therefore essential for all parties to work together
to ensure that future projects are constructed on time and to budget.