Abstract
- Purpose: The purpose of this paper is to identify how quality can be applied in many ways to various aspects of the construction process. And this model will help us to study a different element of the cost of quality which can be implemented by the main contractor within the project execution time. Implementing a model for analyzing the extra cost of poor quality and the overall saving realized from good quality.
- Design/methodology/approach: Based on the analysis of 20 scholarly articles, this paper examines the potential reasons for project delays and cost overruns and ranks the origin of these problems in the field of large public construction.
- Findings: The cost of poor quality only shows a part of the total quality costs. The internal and external failure costs are generally associated with the Cost of Poor Quality while the Appraisal and Prevention Costs represent the costs related to ensuring the product is true to requirements.
- Research limitations/implications: This work considers projects exclusively related to public construction. Obtained results cannot be applied to privately funded projects and the construction of smaller sizes.
- Originality/value: The construction industry currently requires two concepts, and the first one implies the transformation of the construction field from the spending of resources on quality non-conformance to the spending of resources on quality conformance. The second concept implicates the development of the construction business from theoretical quality compliance mode to practical quality performance standards.
Introduction
Changes may be regarded as inevitable parts of the process of construction that should be responded to in terms of newly developed circumstances. Large and inappropriately managed changes may have a highly negative effect on cost performances and project time. Constant project delays and cost overruns are among the most disturbing issues in the construction field. In the contemporary competitive business environment, the necessity to complete construction projects within defined time frames, performance expectations, and costs are becoming immeasurably significant. Project delays and cost overruns inflate the budget, extend the projects’ duration, degrade productivity and reduce revenues.
The cost of poor quality that occurs when contractors or clients fail to prevent defects and wastage in the process of construction negatively affects the final product as well. In general, the total cost of quality in large public construction consists of the project’s stipulated cost, cost overruns, the cost of poor quality, and prevention costs. The purpose of this paper is to review a literature selection that consists of 20 scholarly articles to investigate the potential reasons for project delays and cost overruns in the sphere of large public construction.
General Explanations for Cost Overruns and Time Delays in Large Public Construction Projects
Constant cost overruns, construction project delays and significantly reduced quality levels may be considered as commonly known problems in the sector of construction and engineering. In general, time and cost overruns that occur in public construction projects are a global phenomenon that affects the majority of countries on five continents (Asiedu and Adaku, 2019). An average cost overrun is currently equal to almost 30% of total expenses “with no reduction in the last 70 years” (Larsen et al., 2015, p. 2). At the present day, the substantial loss of allocated financial resources and the necessity to optimize and develop construction projects may be observed.
That is why a prevalent number of scholars and the construction industry representatives “has become increasingly aware of the challenges presented by the frequent time and cost overruns and reduced quality level of construction projects” (Larsen et al., 2015, p. 1). Effective budget and time planning should not imply the reduction of productivity and quality level both in the final product and during the stage of construction.
The occurrence of time delays and cost overruns in any large public construction project has multiple reasons. In their article, Larsen et al. (2015) identified five main categories of factors that may cause cost and time overruns. They are external complications, complications related to a contract, project management-related complications, project change-related complications, and finance and scheduling complications. External complications are related to circumstances and conditions that cannot be controlled by the project organization (Larsen et al., 2015). They include time overruns and long process times caused by public authorities and various unpredictable conditions, such as the state of the construction market and soil, weather, and other project conditions.
Complications related to a contract may be regarded as unpredictable circumstances or certain inconsistencies in the documentation related to a project and shared by partners. They traditionally include inconsistencies or errors in project documents, a lack of project material, structure and requirement specifications, especially in tender documents, and the use of assignment criteria and selection (Larsen et al., 2015). Complications related to a contract are connected with various unforeseeable authority restrictions and requirements as well.
Project management-related complications refer to human-related factors that determine the stability of an organization and the working process. These complications frequently include disputes and conflicts between partners due to misunderstanding and miscommunication, slow and ineffective decision-making, and the change of partners in the process of construction (Larsen et al., 2015). In addition, a lack of experience of consultants and construction supervisors, especially in case if they are newly qualified, may cause cost overruns and time delays in a large public construction project.
In turn, project change-related complications are documentation-related circumstances or conditions that result from changing requirements. These circumstances include omissions and errors in the process of construction or on the consultant material and a ”lack of preliminary examination before design or tendering” (Larsen et al., 2015, p. 6). Moreover, the failure of any part of the construction to identify the project’s needs may substantially affect the working process or the final product in a negative way.
Finally, finance and scheduling complications are regarded as issues within project scheduling and finance. They traditionally include the failure of optimistic expectations concerning the project’s quality, time and costs and the substantive “political focus on reduced project costs or time” (Larsen et al., 2015, p. 6). A lack of or unsettled project funding or planning and the redundant volume or complexity of a project may lead to time and costs overruns as well.
In their articles, scholars from all over the world examine the factors that may lead to cost overruns and construction delays as well. Adam, Josephson, and Lindahl (2017) reported aggregated rankings of significant causes of time delays and cost overruns and showed a focus on the aspect of management as the main cause of these issues. In addition, the scholars identified the tendency to deemphasize “the role of financial considerations in explaining cost overruns and delays” (Adam, Josephson, and Lindahl, 2017, p. 393). Previously, the same authors conducted another research dedicated to the investigation of time delays and cost overruns as well (Adam, Josephson and Lindahl, 2015).
Adam, Josephson and Lindahl (2015) admitted that these issues may be caused by various unpredictable conditions and risks, the size of the construction, and the activities of various governmental agencies. However, in this work, scholars put particular attention to the role of clients in the time and cost overruns during the construction process (Adam, Josephson and Lindahl, 2015). While the responsibility of constructors was constantly emphasized and the client organization was frequently overlooked, the connection between the actions of clients and the impact on time and costs currently exists.
Factors of Time Delays and Cost Overruns in Different Countries
The review of the articles dedicated to the reasons of cost and time overruns in large public construction in different countries is highly essential. The works of Zewdu and Aregaw (2015), Asiedu and Alfen (2015), Niazi and Painting (2017) and Khabisi, Aigbavboa, and Thwala (2016) provide insight into the construction market situation all over the world and potential causes of time and cost overruns worldwide as well.
Amandin and Kule (2016) examined the key reasons for potential risks and project delays in Kigali City, Rwanda. The scholars revealed that more than 65% of implemented construction projects were delayed due to delayed payments, financial deficiencies from contractors or clients, material procurement and poor supervision (Amandin and Kule, 2016). The major reason for cost overruns in public construction in Kigali City is subsequent changes in the final product’s design.
Senouci, Ismail and Eldin (2016) conducted the study to investigate cost and time overruns in the large public construction of Qatar as well. They identified three major causes of construction and delivery delays. They are insufficient data collection or inappropriate survey before design, the increase of expected costs and prices due to inflation, and further repair work due to poor quality and errors in the process of construction (Senouci, Ismail and Eldin, 2016).
Improper planning, limited experience, and poor site management were distinguished as the additional reasons for construction delays. In addition, scholars reported the factors that lead to cost overruns – site conditions, awarding contracts to inappropriate bidders, poor site management, incompetent subcontractors, changes in orders and the inaccurate estimation of the clients’ needs (Senouci, Ismail, and Eldin, 2016). Other substantial causes of cost overruns may be regarded as political situations, market conditions, insufficient estimated construction time, a lack of the constructors’ personal experience and material fluctuation.
According to Famiyeh et al. (2017), in Ghana, the fundamental factors that cause construction time overruns are unrealistic contract durations requested by clients, financial difficulties, inaccurately defined project scope, underestimation of the project’s costs by consultants, client-initiated variations, and the construction’s poor supervision. Additional factors include the inappropriate estimation of project complexity, poor site management, delays in legal permits by governmental agencies, and inappropriate methods of construction (Famiyeh et al., 2017).
The clients’ financial difficulties, constant delays in payments, variations in designs, inappropriate initial project analysis, material price fluctuation, and poor financial management are regarded as factors that have a substantial impact on cost overruns. In Iraq, the substantively effective factors that affect construction overruns are bureaucracy and the changes of regulations by government, security measures, non-official and official holidays, and design changes by an owner or consultants (Bekr, 2015). Issues with local communities, the owner’s lack of experience, global and local construction market conditions, and delays in subsequent payment cause construction delays as well.
In their study, Mulla and Waghmare (2015) emphasized that the issue of time delays and cost overruns is typical for public construction in India and the occurrence of these problems does not depend on the project’s size or location. All projects inevitably face construction delays and cost overruns due to poor project formulation and appraisal, improper plan implementation and the absence of advanced actions from any part involved in construction in case of unpredictable challenges (Mulla and Waghmare, 2015).
In addition, delays in decision-making, poor monitoring, loosely framed contracts and the insufficient or inappropriate use of available modern technologies negatively influence the accuracy of construction as well. Similar factors that cause construction delays and cost overruns were identified in the scholarly articles written by Bagaya and Song (2016), Al-Hazim, Abu Salem and Ahmad (2016), Durdyev, Omarov, and Ismail (2017) and Amoatey et al. (2015).
Cost of Poor Quality and Prevention Costs
Apart from time delays and cost overruns, the cost of poor quality is regarded as a significant problem in the construction industry. According to Mashwama, Aigbavboa, and Thwala (2017), the cost of poor quality is hidden, however, it “eats up to 40% revenues of the construction enterprise” due to failure in the prevention of defects and wastage in the process of construction (p. 447). Their study revealed that the cost of poor quality is the inevitable part of the total quality costs that may be reduced by the implementation of well-elaborated quality management systems. Competent management is regarded as a critical factor that may eliminate poor quality in large public construction.
In general, projects and the process of construction are constantly facing a substantial number of risks that may have a highly negative effect on project quality. In their articles, Iqbal et al. (2015) and Mallawaarachchi and Senaratne (2015) address the initial appraisal and prevention costs of construction to reduce the potential costs of poor quality. Risk management includes preventive techniques that include the evaluation of risks before the project’s start and remedial techniques that are used in case if a risk was detected in the construction process (Iqbal et al., 2015). The contractor of a project is responsible for the management of all risks related to construction quality, labor, subcontractors, machinery, and materials, while a client occupies with financial issues and the changes in documentation, regulations, and codes.
Conclusion
The in-depth analysis of 20 scholarly articles demonstrates that the problem of time delays and cost overruns is typical for large public construction and does not depend on the project’s size or location. The major reasons for time and costs overruns are improper planning and initial project analysis, a lack of experience in construction, subsequent changes in a project, poor site management, investment delays, and financial difficulties of clients.
Bureaucracy, non-official and official holidays, weather conditions, and the insufficient or inappropriate use of available modern technologies may be currently regarded as minor factors that negatively influence the cost and accuracy of construction. Such a disturbing issue of public construction as the cost of poor quality may be regarded as a frequently non-excludable part of the total quality costs. All failures to detect and prevent defects and errors in the process of construction are traditionally associated with the cost of poor quality. In turn, prevention costs should ensure that the final product will meet all requirements.
Reference List
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