There are many reasons that cause projects to lose money, and often more than one for a particular loss. Some reasons may be:
1. There are too many people. - 2. Inadequate, poor or insufficient supervision. - 3. The wrong mix of trades and skills. - 4. Poor worker morale. - 5. Poor discipline and time-keeping. - 6. Poorly trained workers. - 7. Poor safety. - 8. Too much equipment or the inefficient utilisation of equipment. - 9. The wrong type of equipment. - 10. Equipment that continually breaks down. - 11. A shortage of materials. - 12. Defective materials. - 13. Materials aren't available when they're required or where they required. - 14. The project is poorly planned and managed. - 15. Subcontractors not performing as they should, delaying follow on trades. - 16. Poor workmanship resulting in work having to be redone. - 17. Theft of materials and equipment. - 18. Wastage of materials.
Of course sometimes the reasons are because of the client, in which case it's important that the contractor notifies the client, claims for the delay, changes, or additional scope, and assists the client to rectify the problem. Some reasons may be:
1. Changed conditions to those expected at tender stage such as restricted working hours, longer haul routes or materials with different properties. - 2. Increase in scope. - 3. Changed specifications. - 4. Changed testing procedures. - 5. Late access. - 6. Late information. - 7. Changes to work already completed. - 8. Different ground conditions. - 9. Client provided services are inadequate or further from the work area than specified. - 10. Inadequate access or the client's operations impacting on the work. - 11. The client taking too long to approve designs and drawings. - 12. The client's design is more complex than the one tendered for. - 13. Encountering unexpected services. - 14. Finding unexpected artefacts or hazardous materials.
Occasionally the problem is due to a mistake in the tender in which case the estimator should be told so the same mistake doesn't occur on the next tender.
Copyright 2016 - The attached articles cannot be reproduced for commercial purposes without the consent of the author.
The opinions expressed in the attached articles are those of the writer. It should be noted that projects are varied and different laws and restrictions apply which depend on the location of the contractor and the project. It's important that the reader uses the supplied information taking cognisance of their particular circumstances. The writer assumes no responsibility or liability for any loss of any kind arising from the reader using the information or advice contained herein.
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