Construction project delays are an unfortunately common occurrence. A recent study showed that 70% of construction projects are delayed. The good news is that there are ways to mitigate the financial losses associated with these delays. Here are five of them:
Communicate With Stakeholders
Good communication is key to mitigating losses in construction project delays. By keeping all stakeholders updated on the project’s status, you can avoid misunderstandings and potential legal disputes down the road. Furthermore, regular communication will help build trust between you and your partners, which is essential for any successful business relationship. Here are ways you can stay connected with your shareholders:
Status Meetings
One of the simplest ways to communicate with stakeholders is to hold regular status meetings. In these meetings, you can provide an update on the project’s progress, discuss any potential problems, and solicit feedback. Status meetings should be held at least once a month but more frequently if there are significant changes in the project’s status.
Project Management Software
Another great way to communicate with shareholders is to use project management software. This software allows all stakeholders to view the project’s progress, see who is working on what, and track deadlines. This transparency will help keep everyone on the same page and avoid misunderstandings.
Share Information Electronically
In today’s world, there’s no excuse for not sharing information electronically. Whether you use email, instant messaging, or project management software, ensure all shareholders have access to the latest project information. This will help ensure that everyone is up-to-date and reduce the likelihood of miscommunication.
Contingency Plans
No matter how well you communicate and how strong your relationships with your partners are, there’s always a chance that construction delays will occur. That’s why it’s essential to have a contingency plan in place before problems arise. This plan should include alternative suppliers, different construction methods, and backup financing options. A contingency plan will help you keep your project on track even when facing unexpected delays. Here are some essential things you need to have in your contingency plans.
Change Orders
A change order is a document that requests a change to the scope of work laid out in the original contract. Change orders can be used to add or remove work, change the sequence of work, or make other changes to the project. Change orders should only be used when there is a legitimate change to the scope of work and should not be used as a way to increase profits.
Change orders can be a valuable tool for mitigating losses in construction project delays. You can add or remove work as needed by using change orders to keep the project on schedule. This flexibility will help you avoid costly delays and keep your project on track.
Force Majeure Clauses
A force majeure clause is a provision in a contract that excuses one party from its obligations if an event beyond its control occurs. Everyday events typically covered by force majeure clauses include war, natural disasters, and pandemics.
Force majeure clauses can help mitigate losses in construction project delays. If an event beyond your control causes a delay, you may be able to invoke the force majeure clause to excuse yourself from your obligations. This will help you avoid costly delays and keep your project on track.
Proactivity
If construction delays occur, it’s essential to be proactive about solving the problems that caused them. This may require working with your suppliers to find alternative materials or with your financiers to secure additional funding. Whatever the cause of the delay, being proactive about solving the problem will help you get your project back on track as quickly as possible. Here are some other ways you can stay proactive in your projects.
Training and Testing
The average cost of an individual accident in construction is around $35,000. You can mitigate this cost through training and testing. For example, you can let your workers take the CSCS exam if you’re in the United Kingdom. This exam tests an individual’s knowledge of health and safety in construction. Alternatively, you can offer your workers on-the-job training to ensure they’re up-to-date on the latest safety procedures.
Technology
Construction technology can help you mitigate losses in construction project delays. For example, drones can survey the site and track progress. You can also use 3D printing to create prototypes of your project. This technology will help you save time and money by avoiding costly mistakes.
Limit Your Budget
It’s easy to overspend when faced with construction delays, but doing so will only exacerbate your financial losses. To avoid this trap, stay within budget by closely monitoring your expenses and cutting costs wherever possible. Reducing your spending will help you minimize your losses and get your project back on track faster.
Act Fast
When Construction delays occur, it’s essential to act fast to mitigate their impact. However, you must also take a long-term view when dealing with delayed projects. For example, if you’re offered a lower price for materials from a new supplier, it may be tempting to take the offer to save money in the short term. But if that supplier has a history of delayed deliveries, it could cost you more in the long run. So when faced with construction delays, think long-term to make the best decisions for your business.
Construction delays can cost your firm dearly in terms of time and money. To avoid these costly delays, make sure to follow the tips above. The tips can help you mitigate the effects of construction delays and keep your project on track.
