7 reasons for overrun construction projects

Cost overrun is a common problem that construction companies experience for a number of reasons. While the construction industry generates billions of dollars every year, the costs can also be extraordinary and profits are historically thin. To help maximize profitability, avoiding cost overrun is crucial.

The following are some reasons for overrun construction projects that construction companies experience and how they can be avoided.

1. Delayed Responses

Delays in responses from either Submittals or RFIs at any point during construction projects often culminate in cost overrun. One way to avoid this issue is by using automated workflows via a digital platform. By integrating a reliable platform that eliminates the need for manual workflows, you can facilitate faster response times.

2. Construction Safety Issues

Unfortunately, construction remains one of the most hazardous industries, despite many innovations in place to improve safety. Different types of construction accidents  occur that require in-depth investigations, putting projects on hold in the meantime. In addition to potential cost overrun due to delayed projects, lawsuits from injured workers could lead to even greater costs to cover compensation and legal fees. Thankfully, construction companies can mitigate these potential problems with sufficient workers' compensation insurance coverage and robust safety programs.

3. Poor Time Management Practices

Construction project management requires a huge time investment, which can lead to inefficiencies if project managers aren't able to devote that time. In many cases, manual processes are responsible for decreased productivity, making it important for companies to implement a corporate performance management (CPM) solution to help maintain efficiency.

4. Unexpected Errors in Blueprints and CAD Drawings

Human error might ocur when creating CAD drawings and blueprints, which can cause serious setbacks in projects. Regardless of who in your organization is responsible for the errors, construction business owners will be the ones paying for them. To prevent this problem, machine learning programs and integrated AI can minimize the risk of errors during the design process.

5. Unanticipated Costs

Although costs aren't entirely predictable, it's necessary for construction companies to prepare for certain unanticipated expenses that could arise. For example, design errors could lead to issues during construction that lead to costly delays, or low-quality materials could initially compromise the integrity of the project and require replacements that cost even more. The best way to brace for unexpected costs and avoid cost overrun is to allow room for contingencies in your project budget.

6. Labor Shortages

An insufficient number of workers could also make it difficult to complete projects in a timely and cost-effective manner. While it's impossible to completely avoid the impact of a labor shortage that affects the entire industry, it's possible to combat this with innovative technological advances. More people may be inclined to join the industry if they understand that it is an environment that embraces technology.

Avoiding Cost Overrun with the Right Measures

By taking the proper steps to put a sufficient project budget in place and automate various processes, construction companies can effectively avoid cost overrun. By identifying inefficiencies and addressing them with appropriate solutions, companies are more likely to stay within their budget and maintain cost-effective operations. Briq can help your business avoid cost overrun, speak with our experts to learn more.