Property Depreciation and
Construction Cost Consultants


Quantity Surveyors - Cost Planning and Tax Depreciation
BMT & Assoc Provide Depreciation Schedules

Part One: Causes of Construction Delay

Many projects experience extensive delays and often exceed original time and cost estimates. This is the first instalment in a two part series discussing the causes of construction delay (part one) and the associated costs (part two).

Much to the dislike of developers, many projects run over time, causing issues with costs, subcontractors, labour and equipment. A common question is: why do projects exceed time estimates?
There are a number of key factors that play an important role in the delay of some projects. These
factors are related to:

1. The Developer

  • Unrealistic contract duration imposed by developer
  • Continually making changes to plans and slow decision making
  • Finance and payments of completed work – financiers may hold back payments to developers, causing a delay with work going ahead. If developers can’t pay contractors then work will slow down or cease.

2. The Contractor

  • Inadequate experience of contractor in similar types of work
  • Poor site management
  • Improper and inadequate planning
  • Mistakes during construction – can mean having to remove what has been completed and start again
  • Sub-contractor delays

3. The Material

  • Shortage or unavailability of materials can lead to delays in construction while trying to source the correct materials
  • Quality of materials

4. Labour and Equipment

  • Qualified labour supply – as previous bmt qs news issues have discussed, depending on the
  • location of the site, qualified labour might be difficult to source
  • Labour productivity – if the labourers on site aren’t working as quickly as estimated, the
  • development’s progress will be delayed
  • Equipment availability and failure

5. The Consultant

  • Inexperienced Contract Management
  • Slow preparation and approval of drawings
  • Inadequate Quality Assurance/Control – can mean having to re-do reports/plans and inspections
  • Long waiting time for inspections – Council and other authorities

6. The Contract

  • Changed orders and mistakes
  • Discrepancies in contract documents – can cause delays if discrepancies have to be rectified

7. The Contractual Relationship

  • Major disputes and negotiations during construction – industrial relations or work stoppages can delay construction
  • Lack of communication between parties involved

Many projects experience extensive delays and often exceed original time and cost estimates. This is the first instalment in a two part series discussing the causes of construction delay (part one) and the associated costs (part two).

BMT & Assoc Quantity Surveyors

 

8. The External Environment

  • Weather conditions – continual bad weather can cause construction to cease
  • Change in regulations – for example, the new BASIX legislation may cause delays with the
  • development approval process
  • Site conditions

Any delay to a construction project is costly and it often results in disagreements over payments. It is
important to have a contract that outlines costs associated with delays so all parties involved
understand what penalties apply. It is also vital that the development’s time programme is achievable.

How BMT & ASSOC assess delays and their implications


Pre-Commencement Report

In the Pre-Commencement Report, BMT & ASSOC analyses contracts and ensures that there are
provisions for any delays. BMT & ASSOC also assesses the time programme for the site, making
recommendations as to whether the development’s completion is achievable within a certain
timeframe. BMT & ASSOC also review the developers experience with projects of a similar size, as well
as the contractors. Should either be found to be inexperienced, BMT & ASSOC will report this back to
financier.

Progress Payment Valuation

BMT & ASSOC carefully monitor all delays that occur through our detailed site inspection and progress
payment valuation. We monitor the site on a monthly basis and report to the financier on how well the
project is progressing and whether or not we can foresee any delays. By giving the financier this insight,
we are able to provide them with information that can help in determining the funds that need to be
released.

Further Information

Should you have any queries about any of BMT & ASSOC services, please do not hesitate to contact
Pedro Cardoso, Bradley Beer or Tom Plenty.

Recently Completed Jobs

Location: Northern NSW

Project type: 10 residential units
Approx. Square Metre Construction Rate: $1,100/m²

Location: Southern NSW

Project type: 3 residential units
Approx. Square Metre Construction Rate: $1,300/m²

Location: Central Coast, NSW

Project type: 7 residential units
Approx. Square Metre Construction Rate: $1,100/m²

Location: Sydney South, NSW

Project type: 6 residential units
Approx. Square Metre Construction Rate: $1,400/m²

Location: Newcastle, NSW

Project type: 39 lot subdivision
Approx. Cost Per Lot: $36,000

 

Quantity Surveying Work

Quantity Surveying Work

Disclaimer: This information should be read subject to the following conditions:
• Information is published as a matter of interest only and is not intended to be relied upon by readers. In any
situations which may be similar to matters herein readers should exercise and rely upon their own judgement.
• Neither BMT & ASSOC Pty Ltd nor any of its officers or employees bear any responsibility for any error in the
material published in this publication or in any previous publication, or for any damage or loss resulting from any reliance on any material published in this publication or in any previous publication.
• This newsletter is issued as a helpful guide and is not intended to, and does not cover all aspects of the topics discussed. Professional advice should be sought before any action upon these topics is undertaken.