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.
