The Principal Causes Of Cost Overruns And Delays On Construction Projects

Abstract
Delay and cost overrun are common to most construction projects despite the knowledge
attained in project management .Although some authors argue that this is negligible ,It is
important to understand that because of the physical and economic scale of most projects being
driven under the concept of profit to the parent organization and of natonal interest (for
government projects) by the degree of success defined within the iron triangle of cost ,time and
scope (flyvbjerg, 2009).This essay looks at four possible causes of project delay and cost
overrun.

Design Errors
Design errors is one of the major factors which contribute to cost overrun in most projects . It is
important that the client's requirements are represented properly to achieve good technical input
to project execution , therefore a design with errors practically means wrong or insufficient
representation of project works.Normally this would lead to wrong application of techniques in
acheiving result,as the actual project execution begins the subsequent correction of these errors
would lead to cost overrun and delay .Addditionally because project estimations are done based
on the design , errors within the design in the form of ommision or misrepresentation will mean
that the estimation for the project cost will also include these said omissions therefore leading to
extra works etc.

Scope changes
The scope of works is the term that defines the entire project deliverables which is expected at
the end of the project .The scope of works usally details all project plans , estimation , schedule ,
quality and base lines. Any changes which is made to the scope of works during execution will
mean that the entire project plan would have to be looked over , this would mean that more time
and resources would be needed ." With each scope change, precious project resources are diverted to
activities that were not identified in the original project scope, leading to pressure on the project schedule
and budget (Narayans, 2010).Project scope change sometimes is caused by a wrong initial scope
definition , sudden change of interest etc. This may lead to changes in project deliverables hence

affecting project cost and time completion, therefore proper scope management is necessary to avoid
these setbacks .

Inappropriate And Inadequate procurement and faulty contractual management system

The contract basically underlines payment terms , pricing and service levels . A contract that does not
highlight the entire project clearly subsquently leads to disputes. For example if the contract does not
specify the relevant scope of works , then this may lead to a series negotiations , arbitrations or
mitigation because of work change orders. Additionally ambiguos contratual aggrement

with unclear

clauses can lead to potential dispute therefore playing a role in project delay and cost overrun ." It is
important to note that procurement process and contract management is critical to the successful
completion of projects. Thus poor selection of contractors due to low bids, with no technical capability to
handle the project will lead to cost overruns, schedule delays, poor quality, and a final result that is not
acceptable" (PMI, 2010).

The Complexity of the project

The complexity of the project also plays a substantal role in delay and cost overrun .Changes in material
prices and exchange rates may cause subsquent adjustments to the initial budget. Also projects with a
high degree of complexity usually requires complex plans , schedules and estimations, if enough focus
is not placed on them , certain aspects may be ommited from the project plan thereby leading to change
orders , cost overrun and delay .

Conclusion
Although being a very common problem delays and cost ovverruns can be reduce or totally
eliminated using a proper project monitoring and control system that will outline all the
important activities in each phase of the project .In addition ,"Another additional tactics used to
achieving a project with little or no delay and cost overrun is in the definition of project success
factors and criteria. The integration of these factors will lead to a better understanding of the
issues in which the project manager needs to address and design a control system that will
monitor these issue"(Ambituuni ,2011)

References
BORDAT, C et al., 2004. An analysis of cost overrun and time delay of INDOT
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FLYVBJERG, B et al., 2004. What causes cost overrun in transport infrastructure
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KIMBERLY, R. and JAMES, LYNEIS., 1999. Management focus: the dynamics of project
management: benchmarking the derive of cost and schedule overrun. European
Management Journal, 17(2), pp. 135-150.