How to Recognize Project Failures

and Initiate Project Recovery

SECOND EDITION

By Shiven Sompura & James Roessling

California, USA

Abstract

This paper is to feature the importance of recognizing several causes of project failures and initiating the recovery of the construction projects at the initial stage. Project failure can happen to any organization and to any level project. There are numerous reasons for failure and sometimes it is out of control of a project manager or team members to control failure. Failed projects and people involved with the failure have few things in common. In such cases, they are directed for quick fixes which typically prove to be ineffective and sometimes causes catastrophic side effects. In this paper, we will discuss and emphasize several factors causing project failures, how to classify and categorize project failures, how to conduct, plan and develop an assessment process for project failure. With these key focus areas for assessment, project controls and management review process could be analyzed and can be selected. The study will also help to clarify the necessity and a suitable process an organization should develop to analyze project failures.

Introduction

For contractors, both GC’s and subs, an effective project is one finished on time and within budget. The client is happy with the finished product and the contractor leaves with a clean benefit. Everyone wins. At the point when construction project comes up short, it’s regularly because of conflicts and issues that cause cost overruns and delays in the schedule.

If not properly managed, it will eventually lead to running over budget and blowing past the scheduled substantial completion date. Going over budget eats into the GCs or subs profit in addition to being hit with liquidated damages for every day past the agreed upon completion date. It can also impact upcoming projects if a contractor’s workers and equipment are tied up trying to finish up a failing project.

So, what causes the project to fall flat? Any number of variables can lead to project failures, yet often it comes down to how well the project manager or leadership performs regulating the project.

Factors affecting project failures

a) Under estimating the project: A standout amongst the most widely recognized – and expensive! – reasons a project may fall flat is because of an inaccurate estimate. Miscalculations, specification errors, oversights, excluded permits, and changing economic situations (e.g., costs of materials and work) can all lead to costly overruns, leaving the contractor stressed and the client unhappy.

b) Scope Creep & Change Orders: Scope creep depicts the procedure in which the amount of work grows beyond the original contract or DPP (Detailed Project Plan). The three-fundamental driver of scope creep include:

1. Owner requests that are out of the scope of work originally settled upon
2. Unforeseen or general conditions that are unknown to the contractor at the time the contract is signed
3. Owners not doing thorough preliminary work (e.g., site surveys, proper planning, Geotech report etc.)

While the number one goal of any project is a happy Owner, this can now and again move toward becoming traded off if they consistently make demands without thinking about the cost or don’t give you the most exact data forthright.

More…

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Editor’s note: Second Editions are previously published papers that have continued relevance in today’s project management world, or which were originally published in conference proceedings or in a language other than English. Original publication acknowledged; authors retain copyright. This paper was originally presented at the 6^th Annual University of Maryland PM Symposium in May 2019. It is republished here with the permission of the author and conference organizers.

How to cite this paper: Sompura, S. and Roessling, J. (2019). How to Recognize Project Failures and Initiate Project Recovery; presented at the 6^th Annual University of Maryland Project Management Symposium, College Park, Maryland, USA in May 2019; PM World Journal, Vol. VIII, Issue IX, October. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/10/pmwj86-Oct2019-Sompura-Roessling-recognize-project-failures-initiate-recovery.pdf

About the Authors

Shiven Sompura, Assoc. DBIA