TODAY’S CONSTRUCTION INDUSTRY IS BEYOND BROKEN

Construction holds the dubious honor of having the lowest productivity gains of any industry, and in America, it has plunged by 1/2 since the late 1960s (Economist, 2017).

Budget Oversight & Schedule Enforcement

  • 98% of megaprojects become delayed or over budget (McKinsey, 2016).
  • 90% of the world’s infrastructure projects are either late or over budget (Economist, 2017).
  • 66% of general contractors are carrying added costs from overtime/second shifts on at least 3 quarters of their projects due to schedule slippage, with 50% of them needing to extend the project end date (Autodesk, 2019).
  • Only 31% and 25% of all projects came within 10% of the budget or original deadline, respectively in the past 3 years (KPMG, 2015).
  • Large projects typically take 20% longer to finish than scheduled and are up to 80% over budget (McKinsey, 2016).
  • Over the past 70 years, 85% of projects globally experienced cost overrun, with an overall average overrun of 28% (Propeller Aero, 2020) (Primary Source: A. Aljohani, D. Ahiaga-Dagbui, and D. Moore, 2017).
  • 75% of projects were over planned budgets, and 77% were late. On average, projects were 70 days late compared to their original estimates (BusinessWire, 2021).
  • Owners experienced an average of 6 changes to the budget and 5 changes to the schedule, with a 15% average increase in project costs as a result of these changes (BusinessWire, 2021).

Communication

  • 60% of general contractors see problems with coordination and communication between project team members and issues with the quality of contract documents as the key contributors to decreased labor productivity (Autodesk, 2019).
  • Poor communication is the root cause of project failure 1/3 of the time (Primary source: PMI) (Secondary Source: Brightwork, 2017).

Vendor Management & Contract Compliance

  • 69% of owners say poor contractor performance is the single biggest reason for project underperformance (KPMG, 2015).
  • 45% of construction professionals report spending more time than expected on non-optimal activities (Primary Source: PlanGrid, 2018)
  • $1.63 trillion could be saved annually from infrastructure productivity changes (McKinsey, 2013).
  • 68% of trades point to poor schedule management as the key contributor to decreased labor productivity (Autodesk, 2019).
  • 59% of contractors are still using manual processes to collect and track safety data (Viewpoint, 2019).
FLAG ensures our clients finish their bond programs on time, on budget, and to expectations.

DOWNLOAD PDF HERE

Check out our other Case Studies:

Beating the Industry Average By 90%

VIEW MORE