CAUSES OF DELAY IN CONSTRUCTION PROJECTS

Varmora, Priyanka (Carleton ID : 101054249)

De Lima Pacheco Mota, Thaise (Carleton ID : 101053344)
Chahal, Arshveer Singh (U Ottawa ID: 300034077)
Marken, Navdeep (U Ottawa ID: 300045799)
Jampani, Sandeep Kumar (U Ottawa ID: 8830492)

A Group Project in

EMP5119/CVG6304W

Engineering Management/Civil Engineering Program

University of Ottawa

April 10th, 2018

ABSTRACT

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 TABLE OF CONTENTS
LIST OF FIGURES.................................................................................................. V
LIST OF TABLES .................................................................................................. VI
ACRONYMS ......................................................................................................... VII
CHAPTER ONE ...................................................................................................... 1
INTRODUCTION ..................................................................................................... 1
1.1 General ...................................................................................................... 1
1.2 Project Organization ................................................................................... 3
1.3 Project Objectives ...................................................................................... 3
CHAPTER TWO ...................................................................................................... 3
LITERATURE REVIEW........................................................................................... 3
2.1 Introduction ................................................................................................ 3
2.2 Definition and types of construction delays ................................................ 3
2.2.1 Critical or non-critical ........................................................................... 4
2.2.2 Excusable and non-excusable ............................................................. 5
2.2.3 Compensable and non-compensable .................................................. 5
2.2.4 Concurrent and non-concurrent ........................................................... 5
2.3 Review of articles ....................................................................................... 9
CHAPTER THREE .................................................................................................. 9
METHODOLOGY .................................................................................................... 9
CHAPTER FOUR .................................................................................................. 10
ANALYSIS, EFFECTS OF DELAYS AND MITIGATION ...................................... 10
4.1 Analysis of the main causes of construction delays ................................. 10
4.1.1 Natural causes ................................................................................... 10
4.1.2 Owner-related causes........................................................................ 10
4.1.3 Contractor-related causes ................................................................. 10
4.1.4 Management-related causes ............................................................. 14
4.1.5 Material and equipment supply related causes .................................. 18
4.1.6 Legal issue- related causes ............................................................... 18
4.2 Effects of delays in construction projects ................................................. 18
4.3 Mitigations ................................................................................................ 20
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 4.3.1 Software tools for mitigation delays ................................................... 20
CHAPTER FIVE .................................................................................................... 20
CASE STUDY IN OIL & GAS PROJECT IN ALBERTA, CA ................................ 20
CHAPTER SIX ...................................................................................................... 21
OBSERVATIONS AND CONCLUSIONS.............................................................. 21
BIBLIOGRAPHY ................................................................................................... 21

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 LIST OF FIGURES

Figure 1: Example of a project length defined by the critical path with activities A,
B, and C. (Nagata et al, 2018. pp.78). ..................................................................... 5
Figure 2: Example of the impact of 2-day delay to the activity A on the project
scheduled completion date. (Nagata et al, 2018. pp.78). ........................................ 5

v
LIST OF TABLES

vi
ACRONYMS

vii
 CHAPTER ONE

INTRODUCTION

1.1 General

Construction industry has expanded beyond the borders and reached to the global
markets over the past few decades. Having that said, construction projects which
forms the infrastructure of the nations and works towards providing higher living
standards are now consuming high capital and resources. Involvement of money
can be estimated from the facts that market revenues from this industry were
approximately $9.00 billions in 2015 in Malaysia (Leong 2010) and International
revenue of the top 225 contractors grew from $106.5 billion in 2001 to $453.02 in
2011 and top 250 contractors have $909.26 billion revenue in 2014 just from
domestic projects (Enigineering News Record, 2003, 2013, 2015) (Al-Saggaf, 1998)

Construction projects due to their dynamic nature, involvement of multiple parties, a

plethora of activities and dependency on government policies and other nations
involves huge risk in their execution. Very often, construction projects lag the fixed
time during scheduling due to numerous expected and unforeseen reasons. Risk is
even higher because it consumes immense resources whether in the form of money,
material and manpower.

For any construction projects two targets should be given even more importance one
is minimal cost and other is timely completion. It can be generally seen that projects
furnished within the given time, also completes within the estimated capital costs.
So, timely completion of the project is the key to avoid additional costs and
resources. But in real there are not much to count in the list of successful projects in
terms of money, time and quality. Delays in worst conditions can even bring the
project to halt.

One approach to avoid time lags in projects can be the identification of the causes
of delays (which are unforeseen during planning stage) from the previous similar
projects in the construction industry so these mistakes and causes of delays can be
avoided or included in the planning of the project. Studies identifying the major
1
causes of delays in different nations have been undertaken by many authors (F. Arif
et. al. 2014, A. Eleftheria et. al. 2008, M. F. Nagata et. al. 2018 and Sambasivan
et. al. 2007). These studies are based on the nation, type of projects and government
conditions.

There can different causes of delays at each level. Owner and Manager are the two
prominent bodies involved in a construction project. Any negligence in work by these
individuals can lead to huge losses in terms of time and money. Apart from these
parties there are also significant and frequent delays occurs in the management,
material supply and due to natural causes and legal issues. In this study, major
causes of delays due to aforementioned reasons has been thoroughly discussed.

Moreover, delays can have different impact on the progress of the project.
Considering the impact of the delays they can be classified into different types.
Depending upon the parties responsible and its impact on the project, delay can be
divided into various types. A delay can be compensable or non-compensable
depending upon the nature and its impact. Moreover, it can be excusable or non-
excusable. Delays irrespective of their type (compensable or not, concurrent or not)
can cause additional expenditures, conflicts between the involving parties and can
even lead to legal issues.

Another important step while dealing with the delays is the analysis. It includes the
assessing the major causes of delays, impact of the delays and identifying the
responsible bodies. “The most important goal of delay analysis is to find the causes
affecting the critical path and consequently the completion of a project” Al-Saggaf
1998. Over the years, a plethora of methods have been introduced by analysists.
(S.N.A Hisham 2015, M.R.B. Mohamad 2010, B. Prakash Rao (2016)) and relative
ranking of the delays based in their frequency and analysis is the most common.

Analysis of the delay in any project is important to avoid the conflicts between the
involving parties. To avoid clash between two parties apportionment of the delay
between the responsible bodies is of utmost importance.

Software Tools:

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1.2 Project Organization

Chapter Two

Summary of the chapter.

Chapter Three

Summary of the chapter.

Chapter Four

Summary of the chapter.

1.3 Project Objectives

Objectives

CHAPTER TWO

LITERATURE REVIEW

2.1 Introduction

Introduction for literature review.

2.2 Definition and types of construction delays

Delay is when a project, specifically a construction in this case, is completed later

than planned. That can happen for many reasons and be caused by the delay of
one milestone or various milestones along the construction. It is what is being
delayed that determines if the milestone or the construction will be completed late
or not (Nagata, Manginelli, Lowe, & Trauner, 2018). Therefore, the delays can be
categorized into 4 types, depending on the effect of an event on the construction,
as follow.

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 2.2.1 Critical or non-critical

The analysis of the delays to determine if they are critical or noncritical can be
done focusing on the completion of a particular event, i.e. a milestone, or the
completion of the construction project. In either case, the concepts that apply to the
analysis are the same. According to Nagata et al. (2018), “Critical delays are those
activity delays that affect the progress of the project in such a way that result in a
predicted delay to the project completion date.” (pp.74). There are also many
delays that do not compromise the completion of the construction, which are
considered noncritical.

That concept comes from the Critical Path Method (CPM) scheduling, which attests
that only delays to the critical path causes the delay to the schedule project
completion date. However, independently of the scheduling method, all the projects
have critical activities. In the CPM scheduling, the critical path is the longest path of
the schedule network and therefore is the path that determine the length of the
project and its deadline. The establishment of the activities that indeed affect the
construction completion date depends on the following:

 The project itself

 The contractor’s schedule
 The contract requirements for sequence and phasing
 The physical constraints of the project

The Figure 1 shows basically how the critical path determine the completion date
of a project, being the shaded parts the nonworking days. However, the analysis of
the project completion date delay must consider not only the delay of a critical
activity, but also how that delay will affect the hole project. It means that, as shown
in the Figure 2, if a critical activity starts 2 workdays later, it does not necessarily
mean that the project will be delayed 2 days only. In the example of the figure, the
2-workday delay causes the 5-calendar-day delay to the project scheduled
completion date.

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Figure 1: Example of a project length defined by the critical path with activities A, B, and C
(Nagata, Manginelli, Lowe, & Trauner, 2018, p. 78).

Figure 2: Example of the impact of 2-day delay to the activity A on the project scheduled
completion date (Nagata, Manginelli, Lowe, & Trauner, 2018, p. 78).

2.2.2 Excusable and non-excusable

Sandeep

2.2.3 Compensable and non-compensable

Priyanka

2.2.4 Concurrent and non-concurrent

Usually during the construction projects, it is very common that two or more delays
occurs at same time. These types of delays are known as Concurrent Delays or
Intertwined Delays. Concurrency is when two different causes of delay events delay
the project in a specific time-period. For example, when any contractor induced

5
delays occurs at the same time of owner caused delays, it is case of concurrent
delay. Concurrent delays are more critical and complex to analyse.

There are lot of argument exists among the researchers regarding the definitions of
concurrent delays. It should be noted that two different causes of delays occurring
at the same time may not affect the time schedule of the project in the same phase.
There effects can be sequential. On the other, two different delay causes occurring
at different time of construction may induce the delay in same phase (or same time)
of construction. All the definitions of the concurrent delays can be summarized in
the following three categories: (Farrukh Arif et. al. 2012)

Event Based

Many researchers and analysists call it a concurrent delay when events causing the
delay occurs in the same time period. Reynolds and Revay (2001), for instance,
“Concurrent delay is experienced on a project when two or more separate delay
events occur during the same time period and each, independently, affects the
completion date. Rubin et al. (1983), Baram (2000), and Boe (2004) in their studies
also define concurrent delays on the event basis.

Cause/ Effect Based

Another approach used to define concurrent delays is based on the concurrency of

the effects of two delays. As Bidgood et al. (2008) define concurrent delays in such
a manner by stating that “effects are ‘concurrent when their respective causes
(whether simultaneous or sequential) operate or have their effects simultaneously
upon a single work element or phase of contract performance.”

Combined Event and Cause/ Effect Based

6
Ponce de Leon (1987) in his studies includes both of the above cases in his definition
of concurrent delays. He broadly defines concurrent delays either as two unrelated
delays taking place in an overlapping time frame while both delays fall on parallel
critical paths, or two unrelated delays occurring at different time frames while both
fall on two as-built critical paths.

On the other side, if only one delay occurs at one time it is known as non-concurrent
delay. These should be treated as simple excusable or non-excusable, critical or
non-critical, compensable or non-compensable depending upon the type of cause.

Delays arising the concurrent delay situation can be pair of any kind of delays
explained above (Excusable- Non-excusable, Critical-Noncritical, Compensable and
Non-Compensable). These delays provide both owner and contractor an opportunity
to earn benefits and neutralize their mistakes. It acts as a defensive tool for
contractor to waive of the delays he may have cause earlier and for the owner to
acquire liquidated damage from the contractor.

Concurrent delays usually occur during peak construction which involves the
activities of multiple bodies involved in the project. Concurrent Delay can be due pair
of owner caused- contractor caused delays, general contractor caused-
subcontractor caused delays and general contractor caused- supplier caused
delays.

Example of Concurrent Delay and Nonconcurrent Delay

In case of the pipe installation, owner provided the approved drawing of the pipe
installation after four weeks of the original schedule. Till that time contractor starts to
install some pieces of equipment in other locations of the site. Owner causes an
excusable delay by providing drawing the after the fixed time. After getting drawing
contractor can commence the pipe installation. But supplier failed to provide the
fabricated pipes by that time causing another delay. As only contractor has direct
link the supplier, so contractor is responsible for this non-excusable delay.

7
In this situation we have two delay events late approval of drawing and late supply
of prefabricated pipes and both events are critical and effect the overall schedule of
the project. If only one of the above-mentioned cause occurs, then it is case of non-
concurrent or simple delay.

Potential Apportionment Practices

Whenever there is concurrent delay due to both general contractor and sub-
contractor, general contractor necessarily had to pay for the liquidated damages to
the contractor. In this case, it is very important for the general contractor to apportion
the damages among the responsible sub-contractors according to their share.

These four approaches can be used to distribute the damages of concurrent delays.

1. Company Count Based Apportion- This is the most-easiest method and

requires minimum project data. It distributes the delay damages among all the
parties responsible for it.
𝑪𝒐𝒏𝒕𝒓𝒂𝒄𝒕 𝑽𝒂𝒍𝒖𝒆 𝒐𝒇 𝑷𝒂𝒓𝒕𝒚 (𝒊)
Damage Paid by each Party=∑𝑪𝒐𝒏𝒕𝒓𝒂𝒄𝒕 𝑽𝒂𝒍𝒖𝒆𝒔 𝒐𝒇 𝒕𝒉𝒆 𝑷𝒂𝒓𝒕𝒊𝒆𝒔 𝑰𝒏𝒗𝒐𝒍𝒗𝒆𝒅

2. Contract Value Based Apportion- This approach uses the contract value of
each participant and apportion the damages accordingly. The advantage of
using this method is that contract value directly represents the involvement of
the party in the project. It is moderately to use as contract value of each
company involved is usually available.
𝑪𝒐𝒏𝒕𝒓𝒂𝒄𝒕 𝑽𝒂𝒍𝒖𝒆 𝒐𝒇 𝑷𝒂𝒓𝒕𝒚 (𝒊)
Damage Paid by each Party=∑𝑪𝒐𝒏𝒕𝒓𝒂𝒄𝒕 𝑽𝒂𝒍𝒖𝒆𝒔 𝒐𝒇 𝒕𝒉𝒆 𝑷𝒂𝒓𝒕𝒊𝒆𝒔 𝑰𝒏𝒗𝒐𝒍𝒗𝒆𝒅
𝑋 𝐿𝑖𝑞𝑢𝑖𝑑𝑎𝑡𝑒𝑑 𝐷𝑎𝑚𝑎𝑔𝑒𝑠

3. Direct Cost Based Apportion- Similar to contract value, this method uses
the direct cost instead of contract value. However, this method is relatively
difficult as direct costs are not easily available. It offers same advantages and
disadvantages of the contract value based apportion. The following formula
is used for this method.

8
 (𝒊)
Damage Paid by each Party= ∑𝑫𝒊𝒓𝒆𝒄𝒕𝑫𝒊𝒓𝒆𝒄𝒕 𝑪𝒐𝒔𝒕 𝒐𝒇 𝑷𝒂𝒓𝒕𝒚
𝑽𝒂𝒍𝒖𝒆𝒔 𝒐𝒇 𝒕𝒉𝒆 𝑷𝒂𝒓𝒕𝒊𝒆𝒔 𝑰𝒏𝒗𝒐𝒍𝒗𝒆𝒅
𝑋 𝐿𝑖𝑞𝑢𝑖𝑑𝑎𝑡𝑒𝑑 𝐷𝑎𝑚𝑎𝑔𝑒𝑠

4. Labour Hour Based Apportion- Another method used for apportioning of

damages is based on labour hours. Project data needs to be well maintained
as labour hours are not easily accessible. The labour hour data can be either
planned or actual.
𝑳𝒂𝒃𝒐𝒖𝒓 𝑯𝒐𝒖𝒓 𝒐𝒇 𝑷𝒂𝒓𝒕𝒚 (𝒊)
Damage Paid by each Party= ∑𝑳𝒂𝒃𝒐𝒖𝒓 𝑯𝒐𝒖𝒓 𝒐𝒇 𝒕𝒉𝒆 𝑷𝒂𝒓𝒕𝒊𝒆𝒔 𝑰𝒏𝒗𝒐𝒍𝒗𝒆𝒅
𝑋 𝐿𝑖𝑞𝑢𝑖𝑑𝑎𝑡𝑒𝑑 𝐷𝑎𝑚𝑎𝑔𝑒𝑠

Analysis of Concurrent Delays

Analysis of Concurrent delays include the identification of the critical delays and
critical causes and apportion the damages responsibilities accordingly. Similar
methods can be adopted to counter the situation of concurrent delay. Most
commonly methods include critical path method, Time Impact Analysis and
Snapshot Analysis. Additionally, one should address whether concurrent are
occurring on same path or not before analysing the Concurrent delays.

2.3 Review of articles

Sandeep

CHAPTER THREE

METHODOLOGY

Methodology

9
 CHAPTER FOUR

ANALYSIS, EFFECTS OF DELAYS AND MITIGATION

4.1 Analysis of the main causes of construction delays

Many causes of construction delays are presented in various studies as shown in

Literature Review part. Those delays are grouped into categories according to who
or what causes them. That is done to help practitioners avoid the delays in future
constructions and to solve disputes at the end of the project when those delays
result in project time overrun. However, the causes of delays are not deeply
explained in any of the articles. It means that it is not described how those causes
result in delays neither why they are related to the respective responsible party.

Therefore, this section aims to analyse the main causes of construction delays
cited in the reviewed studies. The intention is to clarify why the parties are
responsible for the respective causes of delays and how those causes result in the
construction delays.

4.1.1 Natural causes

Priyanka

4.1.2 Owner-related causes

Sandeep

4.1.3 Contractor-related causes

Many construction delays can be caused by the Contractors through their own
workers or/and Subcontractors’. They are non-excusable delays and may be also
critical delays, depending on which activity is delayed. The main causes of delays
related to the Contractor are the following.

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Inadequate Contractor experience

One of the most important causes of delays related to the Contractor is his/her
inadequate experience because that results in many subsequent causes of delays.
The inadequacy can be technical, for example, do not follow or understand well the
drawings and execution specifications, resulting in rework. Also, the inadequacy
can be related to his/her business skills, for example, poor site management and
ineffective planning and scheduling. Those and other causes of delays are deeper
explained in the following items.

Difficulties in financing project by Contractor

The Contractor must have an enough amount of money to execute the construction
before receiving the payment from the Owner. The method of payment varies
according to the contract, in terms of the percentage and period of the payment.
However, usually the amount to receive is to pay for the initial work cost and not to
pay future works in advance. Then, along the construction, the Contractor will
always need to use his/her own money till receive it back plus the profit after
handing the project over to the Owner and the final inspection. If the Contractor
has difficulties in financing the construction, there will be delays by the lack of
payment of the workers and lack of some tools and equipment.

Conflicts in Subcontractors’ schedule in execution of project

The Contractor is the responsible for the management of the Subcontractor’s

schedule according to the project schedule. In medium and large projects, the
Contractor usually needs to contract many Subcontractors to execute the specialty
services. To attend the project schedule, those services need to be done
concomitantly and the Contractor must prevent one activity from interfering with the
other, causing its delay.

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Poor communication and coordination by Contractor with other parties

The Contractor must communicate with the other parties (Owner and Consultants)
all the time for many reasons, for example, to inform the progress of the work.
However, the poor communication by the Contractor leads to delays mainly when
he/she faces a hard situation that must be solved by the other parties. For
example, during the construction it is common to find design mistakes or
incompatibility between some subjects, such as electrical and mechanical designs.
Those issues must be forwarded to the other parties in order to find the solution as
soon as possible. When this communication fails, it results in construction delays.

Rework due to errors during construction

The Contractor must fully understand the drawings and technical specifications of
the project, including the execution specification. Also, it is his/her responsibility to
ask questions if some information is not clear before the work execution.
Therefore, the misunderstood information which results in rework and delay is
Contractor’s responsibility.

Delay in site mobilization

When the Contractor is not ready to start the construction work, i.e. when he/she
does not have the necessary equipment, tools and workforce in a timely manner to
attend the project schedule, it results in delay to the construction beginning.

Poor site management and supervision by contractor

It is Contractor’s responsibility to manage and supervise the work and the

environment in terms of organization and cleanliness, for example. The lack of
management and supervision of the work causes, for example, the aforementioned

12
conflicts between the Subcontractors. Also, the lack of site organization and
cleanliness may affect the workers’ productivity, for example, when they take too
long to find their tools or spend time deviating from garbage in the workplace.

Ineffective planning and scheduling by contractor

Ineffective planning and scheduling happen when the daily tasks are not properly
planned and schedules by the Contractor to attend the project schedule, which
cause delay to the related activity.

Delays in Subcontractors’ work

The Contractor is responsible for the Subcontractors’ work and their schedules
since they are contracted by the Contractor to execute the specialties services,
which cannot be done by the Contractor’s workforce. Therefore, any delay caused
by the Subcontractors is also the Contractor’s responsibility.

Frequent change of sub-contractors because of their inefficient work

When the Contractor repeatedly changes the Subcontractors who work

inefficiently, because they usually offer the cheapest service, it causes delays due
to their inefficiency in execute the tasks and, moreover due to the period of
adaptation of each new Subcontractor’s workers to the project and the workplace.

Poor qualification of the contractor’s technical staff

Not only the Contractors cause delays when they contract inefficient
Subcontractors, but also when they hire poor-qualified technical staff, who usually
accept lower salaries. It results in either slower tasks execution or low-quality final
product, which needs to be redone, or both.

13
 4.1.4 Management-related causes

Management of involved resources, finance and manpower is the most imperative

for the timely completion of project. A proper coordination among multiple bodies
and documents management are some of the basic steps to avoid time lags. Role
of the management starts from predesign stage of the project. When it comes to
delays of a construction project, the following are the most frequent and important
management related issues which are responsible for critical delays during
construction project.

Poor Communication and Coordination among Owner, Contractor and Sub-

Contractors

A successful completion of a construction project needs the completion of two

processes, design and implementation. These both process is performed by two or
more different parties, owner/designer and contractor. A building design is
multidisciplinary, complex and dynamic. So, lack of interaction between designer and
contractor often leads to time overruns and difficulties during construction stages.

Low constructability, construction rework and design deficiencies can be found if

there is minimal interaction between designer and contractor. Moreover, if contractor
is not familiar with the design it also leads to delay. During construction stage, there
are always some modifications in the original design. Lack of coordination always
leads to time overrun in such situations.

(Glavinich, 1995) in his studies described that “Failing to consider the way the design
should be executed by the builder is the major contributor to scheduling problems,
building constraints and delay during the construction project” Further incoordination
between contractor and subcontractor also causes delays. Construction project
rarely goes as per prepared schedules. Each subcontractor needs to get updated
with any change in the ongoing schedule. (Athanasopoulou Eleftheria September
2008)
14
Lack of Supply Chain Management

It has been noted that lack of resource availability, changes in delivery rates and
chaotic installation conditions are often the sources of costly delays (Vrijhoef and
Koskela, 2000). Advancement in technologies over the year has opened many
suppliers from all over the world to the construction industry. Now a day, contractors
resort to many sub-contractors or suppliers for quality and specialized material.

In the lack of supply chain management, many a times late delivery of the specialized
materials and components delayed the construction project Timely delivery of these
specialized equipment’s is crucial because in the complex project, design and
installation of special materials and equipment often lies on the critical path. A proper
supply chain management is required to assure the on-time delivery of materials with
well setup communication between the contractor and supplier.

Moreover, in the complex project, like construction of an airport, refinieries and oil
and gas plants, different suppliers should be involved during the design stages of
the project. (Athanasopoulou Eleftheria 2008)

Failure to allocate available resources optimally

Many a times, manager fails to allocate the available resources (which is a part of
site management) like frame-work, concrete etc. optimally which causes delay in the
project

If two critical activities (assume concreting of columns) in two different zones of

construction are have a time difference of just two days. Manager allocates same
formwork for both activities. While concreting in the first zone formwork of some of
the columns opens. This not only delays the first activities but also affects the second
activity in the other zone of site for which the same formwork is going to be used.
Allocating the same formwork or other limited resource to two critical activities
separated by small time difference should be avoided.

15
Documents Mismanagement

A construction projects involves many drawings and documents. Missing of any

drawing (design, architectural, electrical, plumbing, ventilation) can delay the
process for the time until it is not revived. Apart from these drawing, material testing,
costing and estimation reports, daily reports and material consumption reports
should be properly maintained for records. In responding to a survey 75 % of
professional out of 108 said that documents mismanagement is responsible for 1/3rd
of cost and time overruns. Main issues related to documents identified in the survey
are:

Use of Multiple Software’s, unavailability of any cloud service specifically for

Architecture, Engineer and Contractor, multiple version of same drawing,
inaccessibility to late drawings, documentation backups

Another important document is client permit document should never be avoided

before concreting. A representative of owner must sign client permit form after
checking the reinforcement before concreting. Failure to this often leads to disputes,
construction delays, construction rework, extra labour and cost. Online access of
all documents.
(https://www.canadianconsultingengineer.com/engineering/poor-document-
management-causes-delays-construction-projects/1003399610/ )

Delay in Progressing Payment

Any discrepancies in the cash flow between any party leads to serious disputes
which often ends up in the court. Cash flow must follow the pattern discussed in the
contract. Also, contractor should also issue timely payments to sub-contractors,
vendors and labour. Failure to this can lead to labour strikes, delay or low-quality
material supply from the vendors and low-quality work by sub-contractors. This
inferior work can also induce the conflictions between owner and contractor which
further delays the project. (M. E. Abd El-Razek 2008).
16
As discussed by Hamzah Abdul-Rahman (30 July 2009) in his studies the most
important cause of delay related to financial issues is poor cash flow management.
Other causes are untimely payments, contactor, stakeholders and market financial
instability.

Labour Strike

In the United States (R.J. Rider 2017) labour can cause serious losses to the
contractors and owner as “Building and Construction Industry has been developed
traditionally by the nation’s strongest trade unions.” Labour strikes have direct impact
on the cost and time of project. Depending upon the fault of contractor in initiating
strike, it can be entitled as excusable or non-excusable delays. Some recent cases
of labour strikes are-

1. Labour Union strike with 175,000 workers in Quebec province in 2017 costs
nearly $45M a day. (http://www.cbc.ca/news/canada/montreal/quebec-
construction-worker-strike-1.4128886 )
2. LiU (Leong, 2010)NA Local 183 (a union with 5000 skilled
workers) strike in 2016 in Greater Toronto Area.
3. Rohtang tunnel work halts after 600 labours starts strike a few week ago. This
project is already going behind the schedule.
(http://www.timesnownews.com/india/article/rohtang-tunnel-rohtang-pass-
manali-dhundi-labour-laws-laborer-strike-action/213003 )

Poor Organizational Structure for Client and Consultant:

17
Insufficient or ill-integrated basic project data. RANK 2 FREQUENCY 4

Complicated administration process of client RANK 3 FREQUENCY 2

Inadequate integration on project interfaces

4.1.5 Material and equipment supply related causes

Navdeep

4.1.6 Legal issue- related causes

Navdeep

4.2 Effects of delays in construction projects

It is important to understand the consequences of the construction delays in order

to know why they should be avoided or at least minimized. Serious consequences
can occur which affect not only the project, but also the involved parties. The main
effects found in the Literature are the following.

Time overruns

It is known that not all the delays lead to project time overruns. According to
Sambasivan and Soon (2007), Owner-related and Contractor-related causes are
the ones which have most impact on time overrun. Among the most significant
causes are ineffective planning and scheduling by Contractor, inadequate
Contractor experience, and delay in payments for the work completed by the
Owner. Other delays can also result in time overrun depending on the period of
delay.

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Cost overruns

Inevitably, time overrun results in cost overrun in many ways. The Owner faces
increased costs when design mistakes occur, and construction works are delayed.
Moreover, time overrun causes loss of revenue for the Owner and other financial
issues. On the other hand, Contractor has cost overruns caused by time overrun
because of material costs due to inflation and costs of labours (Eleftheria, 2008).

However, according to Eleftheria (2008), other situations cause cost overruns for
Contractors, such as the rework due to his/her mistake which increases
construction and operational costs. Also, according to Sambasivan and Soon
(2007), mistakes and discrepancies in the contract documents related to the scope,
deliverables, payment terms, and achievement of various milestones can cause
project cost overrun.

Disputes

Disputes occur between the parties when there is an attempt to attribute the
causes of the delays, especially concurrent delays, to any or each of them mainly
when those delays result in cost and time overruns. According to Sambasivan and
Soon (2007), many causes can lead to disputes, such as lack of communication
between the parties, frequent Owner interference, and changing requirements. If
the disputes are not resolved amicably, it can lead to arbitration or litigation.

Arbitration

The arbitration is the following step when the disputes are not resolved amicably. It
usually occurs when the causes of delays are Owner-related or contract
relationship-related. In this case, a competent third-party can settle the dispute
amicably without going to the court (Sambasivan & Soon, 2007).

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Litigation

According to Sambasivan and Soon (2007), litigation is the last resort to settle
disputes. The main causes of delays that lead to litigation are Owner-related,
Contractor-related, Consultant-related, contract-related and external factor-related.

According to Arif and Morad (2014), disputes that lead to litigation are difficult to
evaluate, what requires a robust analysis and investigation into the facts.
Historically, courts have settle the disputes dealing with the concurrent delays
mostly using subjective assessment or by comparing schedules of different time
lines.

Total abandonment

Total abandonment can occur when the causes of delay can no longer be
supported by the other parties. It is more common in situation of financial crisis,
such as the one occurred in Malaysia between 1997 and 2000 when many projects
were temporarily or permanently abandoned (Sambasivan & Soon, 2007).

4.3 Mitigations

4.3.1 Software tools for mitigation delays

Priyanka

CHAPTER FIVE

CASE STUDY IN OIL & GAS PROJECT IN ALBERTA, CA

Thaise

20
 CHAPTER SIX

OBSERVATIONS AND CONCLUSIONS

BIBLIOGRAPHY

Arif, F., & Morad, A. A. (2014). Concurrent delays in construction: International

legal perspective. Journal of Legal Affairs and Dispute Resolution in
Engineering and Construction, 04513001.

Eleftheria, A. (2008). Delays in construction projects using traditional contract

forms: Causes and effects. ProQuest LLC 2013.

ENR (2003, 2013, 2015). Enigineering News Record.

Leong, M. (2010). The Construction Markert in Malaysia. . Frost & Sullivan .

Nagata, M. F., Manginelli, W. A., Lowe, J., & Trauner, T. J. (2018). Construction
Delays (Third ed.). Cambridge, MA: Elsevier Inc.

Sambasivan, M., & Soon, Y. W. (2007). Causes and effects of delays in Malaysian
construction industry. International Journal of Project Management, 517-
526.

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