Construction Project characteristics

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 BasisClassification Breakdown
1. Nature of Construction Facility‘Building Construction’, ‘Infrastructure Construction’, ‘Industrial Construction’ or ‘Special- Purpose Projects’
2. Nature of Work Construction Project CharacteristicsRepetitive, Non- Repetitive or Combination
3. Mode of ExecutionDepartmental or Contractual
4. Nature of Construction ContractCost Plus, Item Rate, lump Sum, Turnkey or BOT
5. Completion TimeLong 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 LevelInsignificant Risk, Low Value Risk, Medium Value Risk, High Value Risk
8. Need – Based ProjectsPublic Need Projects, Corporate Need projects, Commercial Projects, Re- Engineering Projects
Construction Project Classifications

Typical project Success and Failure Factors on Project Performance

Success FactorsFailure Factors
Project Manager’s CompetencyConflict among Participants
Top Management SupportPM’s ignorance and lack of knowledge
Monitoring and feedback by project participantsHostile socio-economic environment
Favorable working conditionsOwner’s incompetency
Commitment of all participantsIndecisiveness of project participates
Owner’s competencyHarsh climate conditions at site
Interaction between internal  & external project participantsAggressive completion during tendering
Good coordination among project participantsNegative attitude of project participants
Availability of trained resourcesFaulty Project Conceptualization
Regular budget updates
Availability of trained resources
Success and failure factors on Project performance

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.

f.Coordination failure

•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.

g.Procurement failures

•They may be due to faulty procurement of machinery and materials, bad workmanship, poor performance of subcontractors, accidents, unforeseen bad weather

h.Unpredictable Causes

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