Many construction projects are financially successful until the end, when costs suddenly spiral out of control. The main reason for the additional costs is because the project isn’t completed on time. When I say completed, I don’t just mean handed over, I mean one hundred percent finished. Many Construction Project Managers focus only on giving the client access to the completed project facility. However, there’s normally more to a construction project than this. It includes finalising punch lists, finishing and submitting all paperwork (including as-built drawings, quality data packs, guarantees and warranties) and concluding all the contractual obligations (such as commissioning and testing).
Failure to complete construction projects correctly, including completing all paperwork and documentation, results in increased costs to construction companies due to:
- the project extending beyond the contractual end date, often resulting in the application of penalties or liquidated damages
- construction resources remaining on the project longer than budgeted for
- resources not being released to other construction projects where they’re required, which negatively impacts those projects
- retention money and sureties being retained longer by the client
- insurances remaining in place for a longer time
- the contractor incurring additional overheads, such as the costs of facilities, accommodation, vehicles and security remaining on site longer
- the contractor’s personnel who remain behind to complete the outstanding issues become frustrated – especially when they are completing and rectifying work done by others
Needless to say the failure of the construction company to complete all outstanding items can be very frustrating to clients and they usually incur additional costs for their supervision as well as inconvenience and disruption to their operations.