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Delays in construction projects - Causes and impacts

(presented at the 6th IESM Conference, October 2015, Seville, Spain) © I4e2 2015

Amílcar Arantes, Pedro Fernandez da Silva Luís Miguel D. F. Ferreira


CERIS, CESUR, Instituto Superior Técnico Departamento de Economia, Gestão e Engenharia Industrial,
Universidade de Lisboa, Portugal GOVCOPP
Emails: amilcar.arantes@tecnico.ulisboa.pt, Universidade de Aveiro, Portugal
pedrofernandezdasilva@gmail.com Email: lmferreira@ua.pt

Abstract— The main aim of this paper is to identify the main large fraction of construction projects. Nevertheless, in recent
causes for the delays in the Portuguese construction industry and years, the financial crisis has resulted in stagnation in the
its impact, with the purpose of increasing knowledge on the industry, forcing some firms to move abroad or declare
causes and impacts of delays in construction projects. The bankruptcy. Consequently, the industry is becoming
Relative Importance Index was adopted to classify the increasingly more competitive and improving the time and cost
importance of the 47 causes and six impacts identified causes of factors has become indispensable for contractors. Concerning
delays. Results show the main causes of delay are slow decision- this matter, a number of studies have been done but outside the
making, changes to orders, unrealistic timescales and poor Portuguese context. Thus, the aim of this research work is to
contract specifications, financial constraints on the contractor
identify the main causes and impacts of delays in the
and the type of bidding and contract award process. The main
impacts are time and cost overruns and disputes. Factor analysis
Portuguese construction industry and comprehend the links
revealed eight high-level causes that result in 26 of the original between them. It is also important to assess whether there are
causes. Finally, Pearson correlation coefficients were calculated differences in perception between the entities involved in
to find the relationship between the extracted factors (latent construction projects.
causes) and impacts, revealing that lack of commitment and sub-
standard contracts are positively correlated with all impacts, and II. DELAYS IN THE CONSTRUCTION PROJECTS
poor consultant performance is negatively correlated with time
overrun. These findings are expected to improve the scientific In recent decades several researchers have studied the
community’s knowledge of construction management. causes and impacts of delays in the construction industry.
Mansfield et al. [5], using a questionnaire survey conducted
Keywords— construction industry; construction delays; relative with contractors, consultants and developers, found 16 major
importance index; causes of delays and cost overruns in Nigerian construction
projects, and they concluded that the main causes of delays had
I. INTRODUCTION to do with finance and payment issues, poor contract
management, shortage in materials, inaccurate estimates and
Regardless the type and localization, delays in construction price fluctuations.
projects have always been an important issue. Assaf and Al-
Hejji [1] define delay in construction as the time overrun either Ogunlana et al. [6] led a study on causes of delays in
beyond the date the contract parties agree upon for delivery of Thailand, analyzing 12 skyscraper projects and they identified
a project, or beyond the completion date specified in the 26 causes and concluded that material shortages, especially
respective contract. A project is considered successful if it cement, nonexistence of qualified workforce, change orders by
meets the requirements of 3 major indicators: time, cost and the developers and lack of contractor experience were the most
quality. However, the timely completion of a project was important ones. Chan and Kumaraswamy [3] conducted
frequently seen as one of the major parameters for evaluating questionnaire survey in Hong Kong with contractors,
project success [2]. consultants and developers with an aim to classifying the
relative importance of 83 causes of delays. The main causes of
To overcome delays, projects are prolonged or speeded delay identified were poor site management and supervision,
with additional costs. As project delays are so recurrent, it is unforeseen ground conditions, low speed of decision making
common practice for a contingency cost to be considered in the involving all project teams, developer initiated variations and
contract, which is usually a fraction of the total contract price necessary variations of work. Odeh and Battaineh [7]
[3]. As a consequence of delays, a variety of problems can conducted a questionnaire survey in Jordan to evaluate the
result, particularly financial problems, which frequently result relative importance of 28 pre-selected causes of delays in
in conflicts between the entities involved: contractors, traditional construction projects. They determined that the
consultants and developers. Notwithstanding all the efforts, the major causes of delays were inadequate contractor experience,
project design and construction complexity makes it often hard developer interference, delay in progress payments by the
to find the causes of the delays, which often are interconnected developer, slow decision making by the developer, improper
[4]. The Portuguese scenario is no different and delays affect a
planning, low productivity level of labor and problems with [1] showed the link between the causes of contractor delay and
subcontractors. time overruns in construction projects in Saudi Arabia.
More recently, Doloi, Sawhney, Iyer, and Rentala [8] used From the literature reviewed, it is clear the causes and
a survey to find the main causes of delays in construction in effects of delays in construction projects vary depending on the
India. The most important causes, from a set of 45 causes, were type of construction project and the country in which it is
delays in material delivery by vendors, non-availability of taking place. Moreover, some of the authors also suggest
drawings on time, financial constraints on the contractor, comparable studies should be carried out in other countries and
increases in scope of work and obtaining permissions from on other types of construction project [1], [13]. The present
local authorities. Gündüz and Özdemir [9] led a survey to study, therefore, contributes to increasing knowledge about the
define the relative importance of 83 different causes of delays cause and impact of delays in construction projects.
in the Turkish construction projects. They concluded that
inadequate contractor experience, ineffective project planning III. METHODOLOGY
and scheduling, poor site management and supervision, design
changes by the developer and late delivery of materials were In the present research study a questionnaire survey
the most important causes of delays. Finally, Fallahnejad [10] methodology was used to evaluate the importance of the causes
studied the causes of delays in 24 gas pipeline projects in Iran and impacts of delays in construction projects. This
and concluded that the main causes of delays were inability on methodology has been employed in similar studies [3], [5],
the part of contractors to provide imported materials, [7]–[9], [12], [13]. For the success of this methodology it is
unrealistic contract durations imposed by the developer, slow essential that the questionnaire is clear and has no errors or
delivery of materials by the developer, slow land expropriation inconsistencies in its design. For that, basic rules for social
due to resistance from occupants and change orders by surveys were used in the design of the questionnaire [15] and a
developers. five point Likert scale was used (1 - very low to 5 - very high)
to measure the relative importance of the causes and impacts of
Studies on the impact of delays in construction projects delays.
were also developed, often in parallel with studies on the
causes of delay, although the number of studies on this subject A total of 47 causes of delays (divided into 9 categories)
is smaller. Aibinu and Jagboro[11] examined and evaluated the and 6 impacts reported in the literature, and validated by
impact of delays in the Nigerian construction industry and construction experts, were considered adequate to capture the
through a survey they identified six impacts of delays: time Portuguese construction reality and were used in the
overrun, cost overrun, dispute, total abandonment of the questionnaire (Tables I and II, respectively). After, a pilot test
contract, arbitration and litigation. Time and cost overruns was conducted with a restricted number of construction firms
were identified as the most frequent effects of delays in to check the efficacy in gathering information and to identify
construction projects. possible errors or misinterpretations. After that, a few changes
were done in the questionnaire.
Manavazhi and Adhikari [12] analyzed the impact of delays
in the delivery of materials and equipment to construction sites The questionnaire was then disseminated by email to a
for 22 highway projects in Nepal. The authors carried out a random sample of 150 contractors, 100 consultants and 70
quantitative analysis of the impact of these delays and found developers. To avoid non-response bias, which can reduce the
that the actual impact of these delays was on average quality of the results, all recommendations by Forza [16]
approximately 0.5% of the project’s total budgeted cost. concerning size and design of sample and non-response bias
were considered. A total of 139 questionnaires were returned,
Sambasivan and Soon [13] conducted a survey to identify respectively: 62 by contractors, 46 by consultants and 31 by
the causes of delay and their impact on project completion in developers. Finally, the data from the questionnaire responses
the construction industry in Malaysia. They concluded that was then analyzed using statistical tools.
delays in construction projects were empirically associated
with the causes of delay linked with the project developer and
IV. RESULTS
contractor. The results also showed that financial overruns
were correlated with the causes related to the contractor. A. Ranking of causes
Although the vast majority of studies primarily address the In this study the Relative Importance Index (RII) method
causes of delay rather than their impact, the truth is that many was used to assess the relative importance of causes and
studies note probable relations between causes and impacts. impacts of delay in construction. This method has been used by
Mansfield et al. [5] and Frimpong et al. [14] identified the several authors in similar studies [8], [9], [12]. For each cause
association between delay causes connected with the or impact the particular RII is calculated as follows (1):
developer, the supervision, materials and time and cost
overruns in construction projects in Nigeria and Ghana,
respectively. Chan and Kumaraswamy [3] concluded that the RII = ∑ W/(A x N) (1)
causes of delay related to the developer and to the supervision
were linked to the failure to meet deadlines in construction Where W is the importance given to each cause or impact
projects in Hong Kong, while Odeh and Bataineh [7] found (1 to 5), A the highest weight (A = 5) and N the total number of
that the causes of contract delay were linked to the regular responses.
conflicts in construction projects in Jordan. Assaf and Al-Hejji
TABLE I. CAUSES OF DELAY of bidding and contract award process”. Respondents also
Category Causes of delay indicated “delay in progress payments by owner”, “improper
C1 - Delay in progress payments by developer planning and scheduling”, “developer interference, “increase in
C2 - Slow decision making by developer scope of work” and “mistakes and discrepancies in drawings”
Developer

C3 - Developer interference as important causes of delay. These results, considering the 10


C4 - Delay in handing over the site to contractor by developer most important causes are aligned, if not exactly, at least in
C5 - Increase in scope of work terms of the causes’ natures, with the results existent in other
C6 - Change orders
C7 - Bureaucracy in developer’s organization
research works [8], [10], [13].
C8 - Delays and changes of subcontractors However, it is also important to find the differences in the
C9 - Inadequate construction methods ranking of categories of causes between the different types of
C10 - Improper planning and scheduling
respondents, which can be seen in Table VI. The categories of
Contractor

C11 - Mistakes during construction


C12 - Inadequate contractor experience causes related with the developer and to the contract and
C13 - Site accidents contractual relationships are perceived as the most important.
C14 - Poor site management and supervision by contractor As one would expect, the major difference in responses is
C15 - Financial constraints on part of contractor related to the importance of the causes related to the contractor.
C16 - Delay in site mobilization by contractor Developers and consultants agree to classify the importance of
C17 - Inflexibility of consultant this category of causes, but contractors give more importance
Consultant

C18 - Delay in approval of drawings to “design” and “consultant” related causes. One can conclude
C19 - Delay in quality control
C20 - Lack of control over subcontractor
that the perceptions of the consultants and developers are more
C21 - Waiting time for approval of tests and inspections aligned with each other than they are with the contractors.
C22 - Inadequate material quality Correlation analysis can be used to study the degree of
C23 - Damaged materials agreement between respondent types once the data is gathered
C24 - Shortage in materials on a Likert-scale [17]. Analyzing the Spearman’s rank of
Material

C25 - Delay in material delivery correlation presented in Table V produces a statistical


C26 - Changes in material specifications during construction significance of 0.01, which reinforces the previous conclusion
C27 - Delay in materials procurement that the most significant differences in opinions are between
C28 - Change in material prices
C29 - Lack of qualified Labor
contractors and developers. These findings, which are aligned
with the findings by Doloi et al. [8], supports the findings by
equipment
Labor and

C30 - Low Labor productivity


C31 - Equipment availability and failure Sambasivan and Soon [13].
C32 - Inadequate equipment Respondents were asked to rank impacts according to their
C33 - Mistakes and discrepancies in drawings frequency. There was a consensus (in terms of impact ranking)
Design C34 - High complexity of drawings between developers, contractors and consultants, which is in
C35 - Delay in producing design documents
C36 - Bidding and contract award process
line with the results obtained by Aibinu and Jagboro [11]
(Table VI), although the respective RII values of the impacts
Contract and

C37 - Unrealistic time schedule and specifications in contract


relationship
contractual

C38 - Mistakes and discrepancies in contract vary between groups.


C39 - Lack of motivation for contractor to finish early
C40 - Lack of communication between parties
The most common impacts on delay noted by respondents
C41 - Disputes and negotiations between parties were “time overrun” and “costs overrun”. In fact, their
C42 - Unforeseen site conditions observed RII values are not very different, which may indicate
External

that both impacts are related, given that time overrun often
causes

C43 - Problems with neighbors


C44 - Unavailability of utilities in site leads to an increase in the cost of the construction project. The
C45 - Weather conditions impact of “disputes” between groups involved in the
C46 - Changes in government regulations construction project is the third most frequent, as is indicated
Authority
C47 - Delay in obtaining permits from authorities by the value of its RII. This comes as no surprise since
conflicts and disputes between contractors and consultants,
TABLE II. IIMPACTS OF DELAY
contractors and developers or consultants and contractors are
Impacts of delay common [13], [18]. Time and cost overruns, disputes and
I1 - Time overrun conflicts also often arise between groups in the process of
I2 - Cost overrun responsibility assignment. These results are identical to the
I3 - Disputes results by Sambasivan and Soon [13].
I4 - Arbitration
I5 - Litigation The gap in RII values between the first three (very
I6 - Total abandonment frequent) and last three (less frequent) impacts (Table VI) is
worthy of note. According to respondents, the use of
The most important cause (Table III) indicated by arbitration, legal dispute and total abandonment of the project
respondents was “slow decision making by the developer”, occurs less frequently than time and cost overruns and disputes
which is justifiable as timing of decision-making is critical in between the different entities.
construction projects. The following 4 main causes were:
“change orders”, “unrealistic time schedule and specifications
in contract”, “financial constraints on the contractor” and “type
TABLE III. RANKING OF CAUSES OF DELAY TABLE IV. RANKING OF CAUSE OF DELAY CATEGORIES
Category Causes of delay RII Rank Respondents
C1 - Delay in progress payments by developer 0.770 6

Contractor

Consultant
C2 - Slow decision making by developer 0.849 1

Developer
Global
C3 - Developer interference 0.736 8
Developer

C4 - Delay in handing over the site to Category


0.574 38
contractor by developer
C5 - Increase in scope of work 0.732 9 Rank Rank Rank RII Rank
C6 - Change orders 0.845 2 Developer 1 2 1 0.740 1
C7 - Bureaucracy in developer’s organization 0.670 22 Contract and contractual relationship 2 1 2 0.717 2
C8 - Delays and changes of subcontractors 0.655 26 Contractor 6 3 3 0.657 3
C9 - Inadequate construction methods 0.626 30 Design 3 6 5 0.649 4
C10 - Improper planning and scheduling 0.755 7 Material 8 4 4 0.635 5
C11 - Mistakes during construction 0.645 28 Authority 5 7 6 0.628 6
Contractor

C12 - Inadequate contractor experience 0.677 18 Consultant 4 9 9 0.617 7


C13 - Site accidents 0.474 47 Labor and equipment 9 5 7 0.612 8
C14 - Poor site management and supervision Labor and equipment 9 5 7 0.612 8
0.577 37
by contractor
C15 - Financial constraints on part of TABLE V. SPEARMAN'S RANK OF CORRELATION COEFFICIENTS
0.843 4
contractor
C16 - Delay in site mobilization by contractor 0.657 25 Entity Contractor Consultant Developer
C17 - Inflexibility of consultant 0.668 23 Contractor 1
C18 - Delay in approval of drawings 0.674 20 Consultant 0.727 1
Consultant

C19 - Delay in quality control 0.621 32 Developer 0.648 0.831 1


C20 - Lack of control over subcontractor 0.521 44
C21 - Waiting time for approval of tests and TABLE VI. RANKING OF IMPACTS OF DELAY
0.598 33
inspections
C22 - Inadequate material quality 0.585 36 Impacts of delay RII Rank
Time overrun 0.804 1
C23 - Damaged materials 0.511 45
Cost overrun 0.785 2
C24 - Shortage in materials 0.677 19
Disputes 0.700 3
Material

C25 - Delay in material delivery 0.711 14


Arbitration 0.506 4
C26 - Changes in material specifications
0.717 13 Litigation 0.485 5
during construction
C27 - Delay in materials procurement 0.721 12 Total abandonment 0.415 6
C28 - Change in material prices 0.523 43
C29 - Lack of qualified Labor 0.626 30
exceeds the minimum threshold of 1, and all factor loadings are
equipment
Labor and

C30 - Low Labor productivity 0.651 27


C31 - Equipment availability and failure 0.574 38 superior to 0.5 and the corresponding cross-loadings are
C32 - Inadequate equipment 0.596 34
inferior to 0.5, as recommended by Field [19]. The factor
C33 - Mistakes and discrepancies in drawings 0.728 10
analysis was performed using the statistical package for social
Design C34 - High complexity of drawings 0.587 35 sciences (SPSS). The result of KMO and Bartlett’s test of
C35 - Delay in producing design documents 0.632 29 sphericity value was 0.826 (higher than 0.5, the minimum
C36 - Bidding and contract award process 0.828 5 value recommended by Kaiser [20]). Furthermore, to validate
Contract and contractual

C37 - Unrealistic time schedule and


0.845 3
that extracted factors measure what they are intended to, the
specifications in contract Pearson correlation coefficient was calculated and all
relationship

C38 - Mistakes and discrepancies in contract 0.666 24 correlation coefficients between causes present values higher
C39 - Lack of motivation for contractor to
finish early
0.560 41 than 0.3, so it can be assumed that the factors extracted contain
C40 - Lack of communication between parties 0.696 16 related causes [19]. Finally, all Cronbach’s alpha values are
C41 - Disputes and negotiations between greater than 0.67 (Table VII), which ensure the consistency of
0.711 14 latent causes [21], [22]. Therefore, all results of the factor
parties
C42 - Unforeseen site conditions 0.687 17 analysis can be accepted and have statistical meaning.
External
causes

C43 - Problems with neighbors 0.566 40


C44 - Unavailability of utilities in site 0.511 45 Factor I (latent cause “poor contractor performance”)
C45 - Weather conditions 0.672 21 comprises 6 causes of delays directly associated to inefficient
C46 - Changes in government regulations 0.530 42 site management by the contractor. In fact, he has a decisive
Authority C47 - Delay in obtaining permits from role in construction projects and his performance is essential to
0.726 11
authorities avoid delays. The commitment of the contractor gathers all
these causes of delay into one latent cause, which it is easy to
accept.
B. Latent causes
Factor II (latent cause “inefficient site management”)
As used before in similar studies [8], factor analysis was groups 6 causes of delays connected with materials, labor and
useful to find correlations between causes of delay and 6 equipment; unavailability of equipment or inadequate
factors (latent causes) that were extracted aggregating 26 equipment can decrease labor productivity and it is a sign of
(observed) causes of delay, explaining nearly 70% of total improper planning and poor site management, which can also
variance (Table VII). The eigenvalue of the extracted factors be considered a reason for construction delays.
Factor III (latent cause “poor consultant performance”) TABLE VII. FACTOR ANALYSIS
groups 4 causes of delay, all of them linked to poor control by Factor
the consultant; consultants play a relevant role in construction Factors extracted (latent causes)
loading
projects and rigidity/inflexibility on their part can origin delays Factor I - Poor contractor performance (Cα =0.867)
in projects progress. C8 - Delays and changes of subcontractors 0.663
C9 - Inadequate construction methods 0.646
Factor IV (latent cause “lack of commitment”) links 3 C10 - Improper planning and scheduling 0.829
causes of delay apparently unrelated, their correlation depend C11 - Mistakes during construction 0.742
on mostly on the contractor’s commitment; lack of C12 - Inadequate contractor experience 0.652
commitment means that contractor is negligent selecting and C14 - Poor site management and supervision by contractor 0.690
Factor II – Inefficient site management (Cα =0.894)
controlling the subcontractors, which can lead to a reduction in
C23 - Damaged materials 0.508
quality of materials and change their prices. C24 - Shortages in materials 0.733
Factor V (latent cause “poor developer performance”) C25 - Delay in materials delivery 0.727
C30 - Low labor productivity 0.648
groups 3 causes of delays associated to formality required by
C31 - Equipment unavailability and failure 0.711
the developer and by the legislation. Unnecessary paper work C32 - Inadequate equipment 0.777
and ineffective communication chains can lead to potential Factor III – Poor consultant performance (Cα =0.873)
bureaucracy. Excessive bureaucracy in the developer’s C17 - Inflexibility of consultant 0.707
organization can cause delays in the progress of works in many C18 - Delay in approval of drawings 0.815
ways and legislation changes (external and unpredictable) are C19 - Delay in quality control 0.794
too a major issue in delays in construction projects. C21 - Waiting time for approval of tests and inspections 0.751
Factor IV – Lack of commitment (Cα =0.752)
Factor VI (latent cause “sub-standard contracts) aggregates C20 - Lack of control over subcontractor 0.803
4 causes of delays associated with the contract and contractual C22 - Inadequate material quality 0.597
relationships. Moreover, lack of communication among all C28 - Change in material price 0.671
entities involved in the construction project also may results in Factor V – Poor developer performance (Cα =0.670)
C7 - Bureaucracy in developer’s organization 0.794
disputes and negotiations.
C35 - Delay in producing design documents 0.588
Finally, from the 6 latent causes found in this work, only 3 C46 - Changes in government regulations 0.702
can be found in the work of Doloi et al. [8], (inefficient site Factor VI - Sub-standard contracts (Cα =0.737)
C37 - Unrealistic time schedule and specifications in contract 0.723
management, lack of commitment and sub-standard contracts),
C39 - Lack of motivation for contractor to finish early 0.595
reflecting the differences between the contexts. C40 - Lack of communication between parties 0.648
C41 - Disputes and negotiations between parties 0.771
C. Correlation between causes and impacts
The final phase involved identifying the relationship TABLE VIII. PEARSON CORRELATION BETWEEN LATENT CAUSES AND
IMPACTS OF DELAYS
between causes and effects. To do so we calculated the Pearson
correlation coefficients between the eight latent causes (factors Impacts
extracted from the factor analysis) and the six previously Total
identified impacts (Table VIII). Time
overrun
Cost
overrun
Dispute
Arbitra-
tion
Litigation abandon-
ment
Latent causes
Several correlations were found between latent causes and Poor contractor
impacts. Positive correlation means an increase in the -0.091 -0.173 -0.014 -0.048 0.015 0.033
performance
occurrence of an observed cause of a certain latent cause will Inefficient site
-0.093 0.112 -0.014 0.099 -0.039 0.013
increase the frequency of the corresponding impact while management
negative correlation means the opposite – an increase in the Poor consultant
-.208* -0.022 -0.080 0.146 0.094 0.052
performance
latent cause occurrence will reduce the frequency of the effect.
Lack of
0.353** 0.163 0.092 0.209* 0.280** 0.288**
Latent cause VI, sub-standard contracts, is positively commitment
correlated with all impacts, although without statistical Poor developer
-0.180 -0.002 -0.071 0.087 0.096 0.005
performance
significance with arbitration, litigation and total abandonment. Sub-standard
On the other hand in the case of latent causes I, II and V, poor 0.233* 0.231* 0.325** 0.165 0.194 0.085
contracts
contractor performance, inefficient site management and Poor ** Correlation is significant at the 0.01 level (2-tailed)
developer performance, the correlations with impacts are very * Correlation is significant at the 0.05 level (2-tailed)
small and have no statistical significance. However, while
these causes that originated these latent causes have no direct
considered more important, time overruns tend to happen less
relationship with the impacts it does not mean that they have
frequently. Sambasivan and Soon [13] also found a negative
no relationship whatsoever.
correlation coefficient between causes related to consultant and
It is also important to analyze the negative correlation time overrun, although without statistical significance.
coefficients to ensure they make sense and to verify the quality
Finally, latent cause IV, lack of commitment, is positively
of results. The negative coefficient that correlates causes
correlated with all impacts, although without statistical
related to “poor consultant performance” with time overrun
significance with cost overrun and dispute.
means that, when the impacts driven by these causes are
V. CONCLUSIONS most important causes of delays in construction projects to
Regardless of the type and location, delays in construction mitigate their impacts.
projects have always been an important issue and in recent
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However, we acknowledge some limitations, notably the small
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In terms of further development, it would be of interest to [21] H. Doloi, “Analysing the novated design and construct contract from the
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conduct another survey with a view to achieving a higher Management and Economics, vol. 26, no. 11. pp. 1181–1196, 2008.
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study in other economic and cultural contexts. Finally, another
future development could be finding out the root causes of the

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