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Research Outline

Prepared for Rob B. | Delivered January 11, 2021

Contractors - Project Delays

Goals

Determine how often general contractors - particularly those working in non-commercial settings such as home improvement or house renovations - are delayed due to missing parts/materials. Also, provide any available quantifiable data related to the impact that delays have on construction projects, such as time lost, money spent, and more. This information will be used to better understand how large of an issue material delay is for general contractors.

Early Findings

Prevalence of Delays

  • According to the 2020 National Construction Payment Report, only 28% of contractors always finish their projects on-time and within budget. This compares to 61% that say they sometimes do, 9% that rarely do, and 2% that never do.
  • In terms of delays, 73% of contractors reported that they sometimes experience delays in their work, while 10% said that they always do and 17% reported that they never experience delays.

Impact of Delays

  • Delays in general contracting and home improvement are highly dependent upon market prices and demand of certain products at a given moment in time. Materials that are sourced from overseas tend to delay projects for longer and at a greater price, often because of tariffs or lack of product availability.
    • For example, tariffs on Chinese marble increased from 4.9% to 30% over the course of 2020, which led some to pause home renovations and wait for prices to drop.
    • Lumber, another primary resource in contracting and construction, has a 20% tariff when sourced from Canada, which is the primary source for approximately 30% of the lumber used in the U.S. Raw materials such as this are correlated with delays primarily due to lack of availability and tariffs.
  • Delays that are correlated strictly with inefficiency and lack of job site coordination cause construction businesses to lose at least 1 full day of work per week.

Preventing & Overcoming Delays

  • To prevent fiscal losses due to material and project delays, many contractors and construction projects will write in a provision in the project contract that allows contractors to pay a daily rate known as "liquidated damages" to compensate for delays or mishaps, as opposed to paying for costs associated with delays out-of-pocket.
  • Based on a study that analyzed delays in more than 300 housing projects, it is recommended to budget in extra time within a project's plan to minimize the effects of potential material delay.

Construction Management Apps

  •  PlanRadar is a mobile app and management software program for contractors that allows them to manage their projects, document issues and progress, plan changes and repairs, and more.
  •  eBuilder is a construction management software with a mobile app component that allows contractors the ability to work with vendors, partners, and stakeholders from a single location to help manage unforeseen changes in a project in real-time.
  •  Procore has built-in problem-solving technology for construction management that helps contractors manage their resources and ensure project success.

Summary of Early Findings

Our initial research was able to identify that there are a wide array of insights and statistics available that detail the reasons for delays in general contracting and home construction. While data on the impact of these delays is limited, we are confident that values — whether in terms of time or money lost — are available on this topic. However, this information may vary by reason for delay and the type of materials missing. We also identified three potential competitors in the construction app and software management market to provide a better understanding of what already exists and what the target audience is looking for in regards to managing project delays due to missing materials. Based on these findings, we are suggesting the proposals detailed below.