Project Slippage

Project Slippage Effects All Stakeholders

If you have worked in commercial construction for any amount of time you are aware that schedules are at the top of everyone’s priority list. Effective communication and collaboration are key to keeping project schedule. When a project deadline or milestone is missed, project slippage happens. What is the cause of project slippage and what happens when a commercial construction project slides?

The cause of project slippage can range from scope creep, specified material shortages, poor planning, and mistakes made by subcontractors. If you are two months away from installing the millwork and the designer is still making changes, it is likely that your project will suffer from either slippage or poor quality. Adding features during the execution of a project (scope creep) will likely cause project slippage. Subcontractor mistakes may not cause slippage. However, if the mistake requires delivery of a long lead time material or other delays, slippage will likely happen.

For owners, project slippage can delay the occupancy date or move in date. The longer owners wait to take occupancy the longer it will take to recover construction costs. In healthcare, treating patients is the primary source of income and slippage can have a significant impact. The delay of operating room procedures alone can cost more than a hundred dollars per minute. You read that right, per minute. Delays for owners can cost financially and a damaged reputation.

For general contractors, a delay can result in liquidated damages, strained relationships with subcontractor partners, as well as a damaged reputation. Often when an early trade causes a delay the substantial completion date does not move. For every delay, the schedule compresses just a little bit more for the later trades. This can result in further delays, poor quality, safety risks, and cost overruns.

For subcontractors, project slippage can cause problems with labor schedule, material costs, and possibly delays of other projects. If a project schedule slips and work is removed from the schedule, the subcontractor will have to fill that spot with other project scope. If those spots cannot be filled the subcontractor may have to pay labor to do nothing or make the tough decision to lay people off. If material has been purchased and the project slips the subcontractor may have to wait to recover the material cost until the project is back on schedule. If the project slippage is pushed to a time frame of an already full schedule, tough decisions will have to be made by the subcontractor. Will the subcontractor have to pay for overtime or possibly subcontract the work to another subcontractor? Neither option is good for any of the project stakeholders.

At Giffin Interior we know and feel the pressure of projects schedules that can be a moving target. We are continuously monitoring our fabrication schedule and our installation schedule. When a project slips, we discuss our options both internally and with our customers. Our goal is to serve our customers by communicating the effects of project slippage and how we can work together to ensure project success.