Five Reasons a Construction Project Fails

construction program contractor

A seasoned construction superintendent once said that the essential aspect of a construction project is a clean job site. Why? You can be behind schedule and over budget, but everyone thinks you’re rolling along just as planned if you have a clean job site.

A tongue-in-cheek statement reflects two of the most critical aspects of a successful project: the client receives their new building or site on time and within the established budget. While these may be two of the most significant building or site development components, many components make up a successful project for all parties. But what about those cringe-worthy, stressful frustrations that form the unsuccessful flipside of the construction landscape? 

A failed project is typically due to exceeding budget and schedule delays. An array of factors can lead to project failure, but most of the time, it comes down to how well the project manager and supporting team execute the project. A project can present difficulty, but if managed well, it can still be ultimately successful! 

Here are five reasons construction projects fail and some essential tips to ensure your next project gets completed to your liking. 


1. Lack of Planning

Some say that life is 10 percent what happens to you and 90 percent how you react to it. The pragmatist may then ask what’s the point in planning then? A project will always have curveballs, but going into a project without a plan is like facing those curveballs without a bat. 

Poor planning leads to poor execution. No matter the complexity of a project, establishing a plan is vital. A good plan starts with diving into the details of the project plans, specifications, and client expectations. Coordination with stakeholders, the design team, and subcontractors, as well as suppliers who understand the material climate will determine what will be required for you to deliver a successful project. A baseline construction schedule is established, and the subcontractors and suppliers buy into the set schedule. A good subcontract will incorporate the project schedule so that the subcontractor is fully aware of the expectation.

A project plan may morph throughout the project, but no plan at all will undoubtedly lead to failure. 


2. Lack of Time and Money

Delays are common in construction. Some projects begin with a tight schedule, and some are simply riddled with delays caused by permit approvals, government holdups, unreliable subcontractors, or other unexpected events. Whatever the issue, delays can quickly derail even the best-planned projects. As outlined above, a solid, upfront plan can mitigate most schedule impacts, but a lack of time can ultimately derail a project. Work with the project stakeholders to set clear schedule expectations at the beginning of the project.

Any sort of delay almost certainly leads to extra project costs. Delays negatively impact the budget, and the project manager is left to figure out how to resolve the budget while dealing with higher costs than budgeted. Nine out of ten construction projects end up costing more than initially estimated, but this doesn’t have to lead to project failure. One may think that a higher budget leads to more success, but a Gartner survey shows that the opposite is true. A successful project is managed to fit the client’s precise budget and maintain the contractor’s projected profit. 


3. Lack of Communication

The “three Cs” of Construction are communicate, communicate, communicate! Communication, or the lack thereof, can truly make or break a project. Breakdowns in communication, whether among contractor, architect, and client or between contractor and subcontractor, can lead to expensive rework, dissatisfied clients, and unsafe work conditions. Keeping the project team updated on changes to the work and schedule goes a long way in averting significant problems. 

The project manager will be, by default, the primary hub of communication, but the entire team must be committed to an established plan of documentation and communication procedures. Submittals, requests for information, meeting notes, daily logs, invoices, and change orders should be documented and saved. The project teams’ ability to retrieve these items at any point can maintain the project’s trajectory toward success. 


4. Lack of Information or Complete Buyout

A contractor should enter into no project with incomplete plans or specifications or poorly defined scope. Similarly, incomplete buyout, the lack of budget coverage on all items required to complete the project, can quickly lead to failure. 

When a project does not have a clearly defined scope and well-drafted plans and specs, scope creep is right around the corner. Scope creep is when a project’s scope of work increases beyond the original agreement between client and contractor. Poor communication, incomplete plans and specs, and unforeseen conditions can lead to scope creep, which almost always results in extra costs. The project team should agree to the scope of a project and a formal process for documenting change before entering into any agreement.

Even if all project parts are clearly defined and detailed, a contractor may simply miss a part of the scope in their bid. Talk to an experienced general contractor, and you’re sure to hear at least one horror story about an incomplete proposal that cost them money out of their pocket or, if the missed scope was big enough, even lead to project failure. 


5. Lack of Focus on the Whole Picture

According to Gallup, a project’s processes, policies, and procedures can be fine-tuned and still end up in failure. While current project management tools, techniques, and theories account for the rational components of project management, they often overlook the emotional and interpersonal elements that form the makeup of a successful project. Developing your personnel, individually and corporately, into emotionally engaged and driven employees is essential to profitable and meaningful projects.

Construction is complex, and every project has its difficulties. Even a clean job site doesn’t solve everything! Awareness of the top reasons construction projects fail is key to completing project after project on time and under budget.

September 8th, 2021 | ,