THE ROOT CAUSES OF DELAYS IN HIGHWAY CONSTRUCTION

Dr. Ralph D. Ellis, Jr. Associate Professor Department of Civil and Coastal Engineering University of Florida PO BOX 116580 Gainesville, FL 32611 Phone 325/392-3730 relli@ce.ufl.edu Dr. H. Randolph Thomas Professor The Pennsylvania Transportation Institute The Pennsylvania State University 201 Transportation Research Building University Park, PA 16802 Phone 814/863-1901 hrt1@psu.edu

July 25, 2002

Word Count: 4408 + 5 Tables and Figs. * 250 = 5658

Submitted for Presentation at the 82nd Annual Meeting of the Transportation Research Board, Washington, D.C., 2003

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Abstract The timely completion of highway construction projects is an important SHA objective. A significant annoyance to the public occurs when construction projects are not completed in a timely manner and when the actual progress of the construction work is longer than necessary, thereby prolonging the inconvenience and disrupted business access. Economic and social welfare, and safety are all related to timely completions. In spite of the importance of timely completion, construction delays remain a common occurrence. This paper summarizes some of the findings from NCHRP 20-24(12) Avoiding Delays During the Construction Phase of Highway Projects. The root causes of highway construction delays were identified by the researchers. A survey of State Highway Agencies (SHAs), Highway Contractors, Design Consultants, and various professional organizations was conducted. Fundamental principles necessary for improving the time performance on highway construction are presented. An analysis of project records was performed to identify the most frequent reasons for adding time to construction projects. Site visits and in-depth interviews were conducted with SHA and contractor personnel in six states. Case studies on specific contract time extensions were developed as a tool to discover the root cause of the delays. Root causes of delay were defined as situations or conditions that violated the fundamental principles and were defined in sufficient detail that allowed corrective action to be taken. A listing of the most common root causes of delays is provided.

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

INTRODUCTION A primary goal of state highway agencies (SHAs) is to serve the public by providing timely construction of highways with the least disruption to the public. A significant annoyance to the public is when important projects are not completed in a timely manner and when the actual progress of the construction work is longer than necessary, thereby prolonging the inconvenience.

The problem of delays in highway construction has been a priority issue for years. A 1985 FHWA study showed that on average, 31 to 55 percent of all highway projects finish beyond the original contract time (1). The overall average time delay was 44 percent. The sample size for the study was five states covering 1,731 projects. The problem of timely completion has not improved in the last 17 years. It is likely that the critical nature of the problem has worsened because much more of the work is done in urban areas. Many approaches have been tried to reduce the delay problem. However, in spite of past efforts the problem remains.

This paper reports on the results of a 2001 NCHRP study titled NCHRP 20-24(12) Avoiding Delays During the Construction Phase of Highway Projects (2). One objective of the study was to investigate and determine the root causes of delays. Given a clear understanding of the root causes, another objective of the study was to develop recommended practices for dealing with the root causes. The objective of this paper is to provide a clear understanding of the root causes of delay in highway construction.

The lack of success in past efforts to avoid delays has been largely due to a focus on the apparent causes of delay rather than the root causes. Progress in reducing delays requires that one understand the root causes of the problem. Having identified the root causes, one can then proceed with developing solutions that can be applied within a SHA.

RESEARCH METHODOLOGY

Industry Input

The researchers distributed approximately 1000 surveys to industry professionals including SHAs, Highway Contractors, Design Consultants, and various professional organizations with an interest in highways, such as the American Automobile Association (AAA). The purpose of the survey was to obtain input from working professionals concerning the most frequent causes of construction delay and delay avoidance measures. Additionally, the survey provided leads for more detailed follow up interviews and for site visits to SHAs. 141 responses were received. Table 1 presents a summary of reasons for delay as ranked by all survey participants.

SHAs ranked the following reasons, in order of importance, as the five most frequent reasons for delays in highway construction: 1. 2. 3. 4. 5. Utility Relocations Differing Site Conditions (Utility Conflicts) Errors in Plans and Specifications Weather Permitting Issues

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

Contractors ranked the following reasons as the five most frequent reasons for delays in highway construction: 1. 2. 3. 4. 5. Utility Relocations Errors in Plans and Specifications Differing Site Conditions (Utility Conflicts) Weather Owner Requested Changes

While there are some differences of opinion between the SHAs and contractors, it is interesting to note that utility related issues and, plan errors are ranked high by both groups.

Analysis of Supplemental Agreements

The research team also complied and analyzed a database of contract supplemental agreements from the Florida Department of Transportation (FDOT) project records. A total of 2616 contract changes were analyzed. The FDOT assigns a reason code to each of its contract change from a standard list of several hundred reasons. Table 2 provides a listing of the ten most frequently cited reasons for contract changes. The most frequent reason for a time extension was Change Resulting from an Engineering Decision.
This is code used to address errors and omissions in plans and specifications. Table 3 provides a similar listing using the FDOT database of the top 10 reasons producing the most additional construction time. The reason that caused the most additional time was Subsurface Conditions. Utility issues and errors in plans contributed heavily to increases in time.

Time Growth Correlations with Project Designer and Contractor

In 2000, the factors influencing Florida Department of Transportation project success were studied. The investigation reviewed the results of 150 projects of varied size and type. The projects were performed by 27 different construction contractors and designed by 15 different designers. The time growth on all projects averaged 272 days, or 25% of the original contract time. The average cost growth was 2.1%. Analyses of these data showed a high correlation between the contractor or designer and the project outcome with regard to time and cost performance. Nine of the 27 contractors accounted for 80% of the total time growth. This is shown in Fig. 1. Three of the 15 designers accounted for a cost growth of more than twice the average. The data suggest that certain contractors and designers are habitual contributors to poor time and cost performance.

Site Visits Based upon the survey information and follow up discussions with selected respondents, the following six states were selected for visits: California, Florida, Georgia, New York, South Carolina, and Wisconsin. Interviews were conducted with more than 75 SHA representatives, contractors, construction managers, and designers. Prior to each visit, a number of contractor claims in each state were reviewed. These claims helped focus the discussion during the site visit on specific issues. The site visits allowed the researchers to gather specific and detailed information in the topical areas mentioned above and to identify the root causes of delay.

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

FINDINGS Fundamental Principles SHAs and contractors should follow recognized management principles. The research identified the following principles that are relevant to timely completion. The site visits found that adherence to these principles was often inconsistent and lacking. Lack of adherence usually resulted in construction delays. Cost-Time Relationship More time spent in design identifying problems will reduce construction time and result in a shorter overall project time. A widely recognized principle is that spending more monies during planning and design will reduce the time and cost required for construction by avoiding unforeseen conditions, reducing to a minimum design errors and omissions, and developing schemes that will support the most efficient approach to construction.

In the design phase, the opportunity to make decisions to influence the final project cost is greatest. Yet, the expenditure of project funds is comparatively minimal, typically about 10% of the capital budget. Yet, regulations may preclude the designer from spending the time and monies necessary to make the project less expensive, timelier, and of higher quality. The typical SHA budget model may not permit the expenditure of more on design and less on construction. A true project team is needed to facilitate early decisions that save monies later, yet such a team environment often does not always exist. It is no coincidence that one of the highest cited causes of delay and cost overruns on highway projects is errors and omissions in the contract drawings. However, a study published by The Rand Corporation reported schedule slippage as a function of the amount of time overlap between engineering and construction (3). While not directly comparable to the present discussion, the results showed that for 29 industrial-type facilities there was extreme difficulty in maintaining the construction schedule when engineering is delayed, incomplete, or inaccurate. Less than 25% of the projects did not experience schedule slippage, and in each instance, the engineering effort was expedited. This concept does have application to highway construction delays because many highway designs are expedited, there are many participants, and the SHAs have less control.

Time Priority Timely completion of projects must be made a priority. The SHA must take the lead in establishing timely completion as a priority within its own organization and within its consultants and contractors. Timely completion should be a major consideration when implementing policies, management procedures, and specifications. Critical resources should be applied to projects based on the importance of the project. No obvious system of project priorities was identified during the site visits, meaning that generally, all projects are treated alike. At the central office level, it may be decided that a particular project is unique and deserves high priority regarding time. However, this urgency was not clearly communicated to the project level which means that all projects are treated alike or nearly so. The result is that the resources are not always applied on the basis of the urgency of the project. A few high profile projects are the exception.

Accountability The project team must be accountable for their performance. A team concept must be embraced Performance of the team with regard to timely completion of the project should be measured for all participants who make up the project team: SHA personnel, consultants, and contractors. Individuals and organizations should be accountable for timely completion. Lack of accountability and misplaced priorities are common problems in highway construction. Under the design-bid-build arrangement, only the contractor is accountable for the timely delivery of the project. The designer is accountable for completing the contract documents by a specified time. If
TRB 2003 Annual Meeting CD-ROM Paper revised from original submittal.

Ellis and Thomas

inadequate plans lead to cost overruns and time extensions, the designer is not generally accountable because the design contract has been fully executed. A comment heard repeatedly during the site visits was that contracts were let with known errors because deadlines had to be met. The solution to errors or omissions was to let construction take care of the problem. Thus, the design-bid-build arrangement creates a situation where each party is accountable for different objectives. Contractors are held accountable for timely completion, but time extensions are readily granted for unforeseen circumstances. Contractors are not held accountable to look ahead and mitigate unforeseen events that frequently lead to delays. SHA employees are not a held accountable for timely completion either. Timely decisions are not always forthcoming, and SHA practices requiring the contractor to adhere to its own schedule are not uniformly applied.

Rewards Reward systems must reward superior performance. Accountability must be matched with systems that provide rewards (not necessarily monetary) for superior time performance. This should be considered when developing contractor and consultant qualification procedures, contract award procedures, contractor and consultant payments for additional work, contractor and SHA and consultant project evaluations and performance incentives. The reward system does not positively reward all parties for timely completion. Instead, the contractor is negatively rewarded with liquidated damages. Sometimes, bonuses may be offered, but without the designer and SHA team being similarly rewarded, timely completion may be difficult to achieve without a time extension. There is a need to provide non-financial, positive rewards for all team members when timely completion is achieved. What is needed on time-sensitive projects is a team concept where each team member is held accountable for the successful attainment of timely project completion and rewarded accordingly. It is not sufficient to optimize the subparts in the view that the overall project goals will be optimized in the process.

Knowledge Superior knowledge and skill must be available at all steps in the project development and delivery. Reduction of errors and omissions requires the knowledge and skill, which is obtained from experience. The shrinking experience base within the SHA and design consultant communities must be captured and leveraged to all participants through training and access to Information Technology. Project development and design must have access to construction knowledge and input. Another problem often heard is that construction knowledge is not incorporated into the design. There are many reasons for this occurring. First, both SHAs and designers have lost construction expertise through retirements and changes in employment. The increased volume of work has made this situation much worse. The pressure to let projects quickly further limits the SHA from incorporating construction knowledge into the design. The SHA may not make the best use of the knowledge that is readily available.

Efficiency Organizational structure and processes must support delay avoidance and mitigation. Sound and timely decisions are essential to reduce delays. The organizational structure with regard to communications, decision authority, and process must support the earliest possible resolution of project problems. The SHA organization must change from a bureaucratic organization having a primary goal of cost reduction to one that includes also the goal of timely completion. Consistent with the change from doer to facilitator organizations, the SHA has less control and there is more reliance on others. The organization needs to be efficient and provide for rapid responses to technical and managerial problems.

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

Innovative Thinking Stagnant thinking is an important axiom to risk aversion. Many organizations possess a large degree of inertia with regard to doing things the same way. Change is associated with risk. There is a premium on not doing anything that will create risk to the agency. Unfortunately, this also means that new ideas that have minimal negative consequences or risk do not have room to emerge. Obtaining substantial improvements in performance often requires doing things in a fundamentally different way. Based on discussions with SHA officials, contractors, and consultants during the site visits, it was sometimes apparent that there was an old school attitude that we tell them (utilities) where we are going and it is their responsibility to get out of our way. Further, there is a lack of innovative thinking in many quarters that places a high premium on business as usual. Young project engineers and managers are frustrated by the intransient attitude of some senior managers and are more likely to seek employment elsewhere, thus further exacerbating the problem. In support of this observation, TRB Circular 363 has identified three major barriers to innovation (4 ). These are: Resistance to change Risk potential Cost factors

Thus, before substantial progress can be made on timely completion of highway projects, the barriers to doing things differently must be taken down.

For sure, there have been a number of new initiatives in the past 10 years. The TRB Task Force on Innovative Contracting Practices summarized a number of innovative practices that had been tried under the FHWA SEP 14 program (5). The report detailed practices, recommendations, and research needs in four major categories that were: Contract bidding procedures Material control enhancements Quality considerations Insurance and surety

Of particular interest are the recommended practices in contract bidding. The TRB Task Force recommended greater use of A + B bidding, lane rentals, warranties, constructability reviews, incentives and disincentives, and other strategies. This project spawned other NCHRP research into innovative contracting practices (5), constructability reviews (6), warranties (reference), quality-based prequalification (7) among others. Many of the recommendations and developments in these studies have been put into practice with varying degrees of success. However, not all projects are suited for warranties, design-build contracting, A + B bidding, etc.

Definition of Root Cause

In most cases the apparent cause of the delay was identified in the contractor claim. The research methodology was to trace the process beyond the point of the apparent cause to find the real or root cause of the problem. A root cause was distinguished from an apparent cause by determining if the cause violated a fundamental principle and if the cause was known or developed in sufficient detail to allow corrective action to be taken. For example, an apparent cause may be plan errors. However, in depth investigation may ultimately determine that the root cause was a violation of the time-cost principle leading to easily recognizable mistakes. One corrective action may be constructability reviews. Similarly, utility relocations may be an apparent delay cause, but this knowledge is not sufficient to result in corrective

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

action. The resources (time priority) may have been insufficient. Thus, utility relocation is an apparent cause. Apparent causes are many; root causes are fewer in number.

Root Causes of Delay

The root causes of delay were determined during interviews with industry representatives. In some instances, the root cause was not identified per se by any one individual or organization, but rather emerged from the researchers perception in repeatedly hearing similar problems and statements. Also, the researchers relied on their understanding of practices in other construction industry sectors and good project management principles. The root causes of delay are summarized in Table 4.

The root causes of delay in Table 4 are many and varied. Some relate to specific areas of concern like utility locations and relocations while others relate to broader generalities like the SHA philosophy and business practices. The breadth of the root causes reveals that there is no silver bullet to alleviate the problem of untimely completion of highway projects. Making the contractor accountable for planning ahead will not work unless the plans are made more constructible. Making plans more constructible will not suffice unless the subsurface utilities are correctly located. Correctly locating utilities is only a partial solution if utility companies will not move existing utilities in a timely manner. Many other similar scenarios could be developed. Clearly, comprehensive solutions are required. An analysis of the root causes suggests that they originate with the failure to recognize and follow fundamental principles.

CONCLUSIONS

The first step in reducing delays in highway construction is to understand the root causes of the delay. As a result of a NCHRP 20-24(12) a comprehensive investigation of this subject was conducted. The results provide a listing of root causes and issues that are directly responsible for most highway construction delays. Additionally, the researchers found that fundamental principles must be adopted before significant improvements can be made.

The renewal of highways will continue to be a major task, and the timely completion of highway construction projects is a national priority. Safety, economic and social welfare are dependent upon the transportation infrastructure. Therefore, SHAs need to apply collectively the resources and knowledge towards the goal of reducing delays in highway construction. Identifying the root causes and recognizing fundamental principles is a starting point.

References 1. Thomas, H.R., Hester, W.T., Hunter, J. M. and Logan, P.A. Comparative Analysis of Time and Schedule performance on Highway Construction Projects Involving Contract Claims. Final Report. FWHA. Washington. D.C. 1985 2. Thomas, H.R. and Ellis, R.D. NCHRP 20-24(12) Avoiding Delays During the Construction Phase of Highway Projects. Final Report. Transportation Research Board. National Research Council. Washington, D.C October, 2001. 3. Myers, C.W., Shangraw, R.P. , Devey, M.R., and Hayashi, T. Understanding Process Plant Schedule Slippage and Startup Cost. Report No. R-3215-PSSP/RC. The Rand Corporation. Santa Monica, CA. June 1986. 4. TRB Circular 363.Transportation Research Board. National Research Council. Washington, D.C. 1991.

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

5. TRB Circular 386.Transportation Research Board. National Research Council. Washington, D.C. 1991. 6. Cost Benefits of Constructability Reviews, Project 20-07, Task 124, Final Report, Transportation Research Board. National Research Council. Washington, D.C.2002, 7. Minchin, E., Smith, G. and Thomas, H.R. Quality Based Performance Rating of Contractors for Prequalification and Bidding Purposes. Project 20-54. Final Report. Transportation Research Board. National Research Council. Washington, D.C. 2001.

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

List of Tables and Figures TABLE 1 Most Frequent Reason for Delays in Highway Construction.........................................................9 TABLE 2 Most Frequent Reasons for Additional Time from Analysis of FDOT Project Data ...................10 TABLE 3 Reasons Resulting the Most Additional Time from Analysis of FDOT Project Data..................11 TABLE 4 Root Causes of Highway Construction Delays ............................................................................13 Figure 1 Average Time Growth for Each Contractor....................................................................................12

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

TABLE 1 Most Frequent Reason for Delays in Highway Construction Rank Survey of Highway Contractors Survey of SHAs 1 Utility Relocations Delayed Utility Relocations Delayed 2 Errors in the Plans or Specifications Differing Site Conditions (Utility Conflicts) 3 Differing Site Conditions (Utility Conflicts) Errors in the Plans or Specifications 4 Weather Weather 5 Owner Requested Changes Permitting Issues 6 Differing Site Conditions (Other than utilities) Delays in Right of Way Acquisition 7 Permitting Issues Delays in Environmental Planning 8 Delays in Environmental Planning Insufficient Work Effort by Contractor 9 Delays in Design Differing Site Conditions (Other than utilities) 10 Pay Items do Not Match Scope of Work Poor Coordination of Work by Contractor

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

10

TABLE 2 Most Frequent Reasons for Additional Time from Analysis of FDOT Project Data Ranking Reason Number of Total Contribution Supplemental Additional to Total Agreements Time Time (Days) Growth (Percent) 1 Change Resulting from an Engineering 327 192 4% Decision 2 Necessary Pay Item Not Included 231 297 6% 3 Drainage Modification 165 93 2% 4 Existing/Proposed Utility Conflict 138 208 4% 5 Subsurface Conditions 136 644 14% 6 Harmonize Project With Adjacent Project 131 84 2% 7 Local Government Agreement Modification 127 541 12% 8 MOT Plan Modification 115 -16 0% 9 Conflict Between Pay Item & Pay Item Note 103 136 3% 10 Design Std/Spec Change after Letting 73 556 12%

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

11

TABLE 3 Reasons Resulting the Most Additional Time from Analysis of FDOT Project Data Ranking Reason Number of Total Contribution Supplemental Additional to Program Agreements Time Total Time (Days) Growth (Percent) 1 Subsurface Conditions 136 644 14% 2 Architectural Feature Related Issue 62 600 13% 3 Design Std/Spec Change after Letting 73 556 12% 4 Local Government Agreement Modification 127 541 12% 5 Necessary Pay Item Not Included 231 297 6% 6 Unavoidable Acts of God 66 239 5% 7 Existing/Proposed Utility Conflict 138 208 4% 8 Change Resulting from an Engineering 327 192 4% Decision 9 Minor Changes 55 184 4% 10 Non Weather Related Damages 70 173 4%

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

12

90%

Average Percentage Time Increase

80% 70% 60% 50% 40% 30% 20% 10% 0% -10% -20%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

Contractor
Figure 1 Average Time Growth for Each Contractor 8.

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

13

TABLE 4 Root Causes of Highway Construction Delays Major Category Business Practices Root Causes Business as usual Most projects are treated alike For political and funding reasons, projects often need to be awarded based on an accelerated schedule Various team members have different objectives Budgets restrict the expenditure of project funds across functional boundaries There lacks team accountability for timely project completion The decision maker weigh cost benefits more heavily than time benefits SHA personnel and consultants called to the project to solve technical problems sometimes do not have an adequate appreciation for the need for a timely decision Construction expertise is not incorporated into the design A shortage of experienced personnel exist within the design industry Because of time pressure, designers often leave problems to be solved during construction Utilities are unidentified or incorrectly located Many smaller utilities have no as-built drawings Often, the as-built drawings are incorrect As-built location information may not include vertical location Utility location information provided on drawings is not clear particularly for complex intersections The standard of practice for designers with regard to communicating utility information on drawings is not clearly defined Slow response by utilities to improve their processes Smaller utilities are restrained by funding limitations Delays in the relocation of utilities Utilities may not see SHA work as a priority SHA right of way agreements with utilities may not provide adequate terms and conditions to obtain timely response from the utilities The information provided is inaccurate Conditions are known but not incorporated into the design because of funding or time pressure issues. The view point that site investigation is done for design not for construction Conditions change after the design is complete Project pre-bid visits not done or ineffective Conditions are unknown and SHA response time is slow Pressure to get the project bid Conditions are unknown but are easily discoverable Constructability reviews are ineffective Site investigation data is used for design purposes and not for construction planning Inadequate planning by contractor Planning horizon is too short Unit price contract forms encourage work on high pay items that are not critical

Procedures

Utilities

Differing or Unforeseen Site Conditions

Contractor and SHA Management of Scheduling and Planning

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.

Ellis and Thomas

14

TABLE 4 Root Causes of Highway Construction Delays (Continued) Inadequate Scheduling by contractor Contractor and SHA Management of Scheduling Project schedules often do not match the way the work is to be and Planning done CPM schedules are often overly complex and not representative of the work plan Schedule updating is not done or done incorrectly Inadequate review and administration by SHA Chosen scheduling format is not an appropriate match for the project Initial review of the contractors proposed schedule is inadequate Schedule update provisions are not enforced MOT designs focus on traffic management and often are lacking with Maintenance of Traffic regard to constructability MOT plans often do not represent the required construction process MOT plans often do not address worker safety issues MOT plans often omit critical construction steps Design Errors and Designers are not given sufficient time to produce quality designs Omissions Designers are not accountable for project performance during construction There is a shortage of experience personnel within the design industry particularly with regard to construction experience

TRB 2003 Annual Meeting CD-ROM

Paper revised from original submittal.