Correcting the course of capital projects

Planning ahead to avoid time and cost overruns

Any company that has ever undertaken major capital building projects knows they almost always take longer and cost more than expected. Unless strong project controls are put in place in advance, project owners often don’t realize the severity of delays and cost overruns until well after a project has foundered. Proper governance and control processes are essential for spotting problems early and getting projects back on track quickly. The more time and effort companies put in at the outset, the greater the chance they will keep projects in check throughout the construction cycle.

 

“A capital project is rarely derailed by a single problem; it usually takes a series of failed steps along the way to put a project in jeopardy.”

Daryl Walcroft, PwCPrincipal, Capital Projects & Infrastructure Leader

Early warning signs that a project is in trouble

The best way to get back on track fast is to be alert to red flags. Such signals mean it’s time to investigate to determine whether the project is truly in trouble and, if so, how to fix the problems. So beware when:

Contractors

The contractors request to expand the budget and stretch the schedule, keep changing project scope, keep reporting materials delays, evoke suspicion of fraud or quality and safety concerns, and/or experience one serious injury or a string of minor injuries.

Architects

The architects submit numerous revisions to architectural drawings and/or a flurry of requests for information (which often indicate that design documents were not complete enough for contractors 
to understand.)

Owners

The owners request a host of change orders, which can significantly affect cost and schedule. Or they delay in responding to questions from contractors.

Project managers

The project managers submit monthly progress reports that always show things on time and on budget. This may actually indicate that the reporting process is not robust enough, or that the project team is withholding “bad news”. Comparing actual specific costs to budgeted amounts can provide valuable clues.

 

 

What causes cost overruns?

Lack of planning before – and rigorous controls during – construction is the biggest misstep that leads to project delays and failure. 

Top 11 reasons why capital projects veer off course

A capital project is rarely derailed by a single problem; it usually takes several mistakes along the way to put a project in jeopardy. The graphic below lists the top mistakes we see companies make. 

 

 

How to get capital projects back on track

It is possible to bring a derailed capital project back on track – and sometimes even exceed original goals. The following are seven ways to help you move from a position of fear and uncertainty to one of confidence and control. 

Contact us

Daryl Walcroft
US Capital Projects & Infrastructure Leader
Tel: +1 (415) 498 6512
Email

Anthony Caletka
Principal, Global Capital Projects & Infrastructure Energy Leader
Tel: +1 (713) 356 5871
Email

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