Factors of delay and cost overrun in negotiated contracts in the precast industry in Lebanon

Abstract

Numerous examples of construction delays and cost overruns have been documented as a result of bad planning and/or implementation of needed construction procedures. Researchers have concluded that the construction industry is overburdened, with more frequent delays and cost overruns than other labor-intensive businesses. Infrastructure and project development in underdeveloped countries have grown dramatically during the last decade. Construction areas are predicted to experience substantial cost and schedule overruns during construction due to large investments in construction activities that occur all of a sudden in a very short construction period. The main goal of this study is to identify the most significant time delay and cost overrun factors in negotiated contracts in the precast industry in Lebanon. Following a literature research, a list of 15 time delay factors and 9 cost overrun factors was compiled and provided in the form of a survey questionnaire. The questionnaire was delivered via a google form and emailed to a number of precast industry specialists. The relative importance index, frequency index, impact index, frequency adjusted importance index, Person's correlation, P-value and risk analyzing were used to rank significant factors of time delay and cost overrun in the precast industry. As a result, it was found “Lack or delay of delivery of compilatory materials in markets”, “owner delay in freeing the contractor financial payments”, “Contract modifications”, “Bad project manager decision making”, “Delay in giving instructions\ drawings\ specifications”, “Lack of coordination between parties” were ranked as the most significant delay factors in the precast industry respectively and “Fluctuations in the cost of building materials”, “Delay in construction, supply of raw materials and equipment by contractors”, “Excessive pricing of variations and additional works”, “Design changes”, “Financial Resources constraint: funds and associated auxiliaries not ready”, “Lack of cost planning/monitoring during pre and post-contract stages” were ranked as the most significant cost overrun factors in the precast industry respectively.