Construction Project Definition
•Construction implies designing building, installation and commissioning of items of civil, mechanical, electrical, telecommunication and other utility works necessary for building a specified construction-related facility or service.
•A Construction Project is a high-value, time bound, the special construction mission of creating a construction facility or service, with predetermined performance objectives defined in terms of quality specification, completion time, budgeted cost and other specified constraints.
Construction Projects Classifications
|Project Classification Basis||Classification Breakdown|
|1. Nature of Construction Facility||‘Building Construction’, ‘Infrastructure Construction’, ‘Industrial Construction’ or ‘Special- Purpose Projects’|
|2. Nature of Work Construction Project Characteristics||Repetitive, Non- Repetitive or Combination|
|3. Mode of Execution||Departmental or Contractual|
|4. Nature of Construction Contract||Cost Plus, Item Rate, lump Sum, Turnkey or BOT|
|5. Completion Time||Long duration Programme ( Over 5years) Medium duration projects (3-5 years) Normal duration projects (1-3 years) Special short term projects (less than 1 year)|
|6. Budgeted Cost (Indian Public Sector)||Mega Value Programme/ Projects (Over 1000 crores) Large Value Projects (100-1000 crores) Medium Value Projects (20-100 Crores) Small Value project (Less than 20 crores)|
|7. Maturity Level||Insignificant Risk, Low Value Risk, Medium Value Risk, High Value Risk|
|8. Need – Based Projects||Public Need Projects, Corporate Need projects, Commercial Projects, Re- Engineering Projects|
Typical project Success and Failure Factors on Project Performance
|Success Factors||Failure Factors|
|Project Manager’s Competency||Conflict among Participants|
|Top Management Support||PM’s ignorance and lack of knowledge|
|Monitoring and feedback by project participants||Hostile socio-economic environment|
|Favorable working conditions||Owner’s incompetency|
|Commitment of all participants||Indecisiveness of project participates|
|Owner’s competency||Harsh climate conditions at site|
|Interaction between internal & external project participants||Aggressive completion during tendering|
|Good coordination among project participants||Negative attitude of project participants|
|Availability of trained resources||Faulty Project Conceptualization|
|Regular budget updates|
|Availability of trained resources|
Major Controllable Causes of Project Time and Cost Overruns
1.Project formulation, planning and contract administration failures:
a. Inadequate project formulation: Poor field investigation, inadequate project information, bad cost estimates, lack of experience, inadequate project formulation and feasibility analyses and poor project appraisal leading to incorrect investment decisions.
b. Poor planning for implementation, inadequate time plan, inadequate resource plan, inadequate equipment supply plan, poor organizing and poor cost planning.
c. Lack of proper contract planning and management. Improper precontract actions and poor post award contract management.
d. Lack of project management knowledge and skills during execution, inefficient and ineffective working.
2. Client inaccurate budget cost estimate
Client’s narrow or unclear perspective about the proposed project may lead to inaccurate budget cost estimate.
3. Contractor’s unrealistic tendered cost estimate
Many times Contractor’s objective is to extract maximum profits from the project which may lead to malpractice and may lead to cost over runs. Improper planning and estimation of Project activities may also lead to time and cost overruns.
4. Management Failure
a. Work Policy failure
It is due to unclear objectives and targets, unworkable plans, top management’s failure to back up the plans, failure to identify critical items, lack of understanding of operating procedures and policy directions, too many change orders, reluctance to take timely decisions and ignorance of appropriate planning tools and techniques.
b. Organizational Failure
It is due to incorrect organizational structures resulting in inadequate funding, confusion of responsibility, inadequate delegation of authority at various levels, higher management interference, lack of stress on accountability etc.
c. Human Resource failure
Improper choice of the project manager, inexperienced staff, lack of commitment and motivation.
d. Directional failures
It can be attributed to lack of team spirit, internal conflicts, poor human resource management, labour strikes etc.
e. Controlling Failure
It is due to unclear targets, inadequate information flow, incompetency in adopting appropriate monitoring techniques and an absence of timely corrective measures.
•It can be attributed to a breakdown of communication at various levels, lack of day-to –day decisions to fill procedural gaps and an absence of co-operation and spirit de corps.
•They may be due to faulty procurement of machinery and materials, bad workmanship, poor performance of subcontractors, accidents, unforeseen bad weather