Construction on the Sydney Opera House started in 1959. It was supposed to take 4 years and cost about $7 million (AUS). It took $102 million (AUS) and was completed 14 years later. It’s one of the most iconic buildings around the world, but it was also a construction management failure. It was plagued with redesigns, underestimates, and cost overruns. However, ultimately, once Queen Elizabeth II inaugurated it in 1973, it paid for itself in just two years. There are many reasons the project became so complex and expensive, not the least of which was bad management. Let’s take a look at some key warning signs that a construction project may be trouble.
Reasons Construction Projects Get Off Course
The surety industry bonds contractors to ensure that projects are completed on time and budget. They have found four main reasons that contractors fail. Learn the warning signs to know when your project may headed toward failure.
Financial Warning Signs of a Failed Construction Project
Contractors often overextend themselves, which leads to low profit margins. Profitability keeps a contractor focused, so when the project starts to lose money, a contractor may not think that it’s worth completing. A contractor may also have excessive debt or not enough capital to complete the project. The estimate may be too low for the contractor to make money. These are red flags that you need a different contractor or management assistance to get your project on target.
Management Warning Signs of a Failed Construction Project
When management fails, it can be lack of a plan or just untrained management. Missing deadlines or a high incidence of claims are red flags that your management is not performing up to task. Before you begin a project, work with Polaris to get the experts in the industry who can make sure that the plan is sound and everyone is up to speed for the task. Don’t let inadequate management slow your project down.
Signs of Overexpansion Failures in Construction Projects
Growth opportunities are great, but when you’re building it can also be a disaster. If the contractor doesn’t have the infrastructure to grow the project, it can be headed for failure. It’s not just the equipment and labor needs, it’s also the behind-the-scenes personnel. Your contractor should also be able to keep up with the bookkeeping and accounting, the market, and estimating for each job.
Other Risks for Failure Construction Project
Surety companies also found that weather delays caused many failures. Hurricane damage can really slow a project down. Then there were unreasonable owners and onerous contracts that delayed projects. Poor site conditions or a lack of labor were also cited as signs of construction failure. Managing each of these risks is something that every contractor needs to take into account.
Don’t Let Your Construction Project Fail
Not everything that goes wrong on a project is because of the contractor, but the contractor can have more help in managing their project. Polaris provides reliable, well-managed construction and engineering services that will help make your construction project a complete success. Call us for more information and to discuss the needs of your project.