Delays in Construction Projects in Vietnam

Delays in construction almost happen in all projects in Vietnam especially those state-funded and which contractors are domestic. On the other hand, projects which were carried out by international contractors are less likely to suffer delay.

The responsibility for delay was not clearly defined; therefore, whenever delay happens, no one has to be blamed. Because of this, the owner often give contractors extended time to finish the project without any penalty. In very few cases, contractors were given more time but had to pay a penalty.

However, in general, delay and cost overrun are the biggest problems in bombing construction field in Vietnam. Truong Quang Dien made a case study which focused on the construction stage of the projects and the factors affecting it. The objectives of his paper were:

1. Recognizing frequency causes of delay

2. Defining effects of delay in progress of projects

3. Solutions to delay problem and how to deal with delay when it happens

Conclusion

The discussion about the delay in construction projects in Vietnam focused on frequency, severity and importance of the causes of delay, effects of delay and how the delay was solved.

The frequency and severity causes of delay were identified through previous research, present issues, and widespread contributions of construction field in Vietnam. The construction participants accorded inexact time, slow site clearance, slow issuance of government permits, poor site management and supervision, financial difficulties, incompetent subcontractor, and unforeseen factors, etc.

Slow acquisition was frequent cause of delay in almost construction projects in Vietnam, which affected to whole schedule of the project. In the Owner’s point of view the causes of delay were related to the responsibilities of both contractor and subcontractor.

This paper showed that owners and consultants realized that contract awarding to the lowest bidder was the frequent causes of delay. However, the contractors considered that the severe causes of delay were related to owners and consultants like: unclear responsibilities, owners’ slow decision making bout some changed works during construction.

One common cause of delay was Change Order initiated by owner during construction. Besides, there were many causes between two parties, such as progress payment delay from Owner, ineffective scheduling, poor site management and supervision, shortage of labors and difficulties in financing from contractor.

All parties agreed that the following causes rarely occurred and were less important: changes in government regulations, restrictions at site, effect of social and cultural factors.

In general, there were certain interrelationships among the problems. The top-ranked problems including occurrence were grouped under some major factors: site related issues, incompetent designers and contractors, poor estimation, poor site management and supervision, poor contract management, price fluctuations, and improper techniques. It was noted that the findings confirmed previous studies that most of the problems in construction projects were related to human behavior and management problems, and not technical in nature.

In order to mitigate delays in construction industry in Vietnam, all engineers should be required for competency training in terms of technical, and safety. Therefore, there was no more gap in planning, managing and organizing and safety; project feasibility study must receive a serious attention and must be done carefully especially on government funded projects.  In addition, contract management work should be the focus. Although Vietnamese government has regulated many decrees or circulars which ruled this work and published contract template, it always needs experienced parties to do contract work and suit template to real project conditions.

From the above causes, the effects of delay were cost overrun and party’s damages. Third parties were people who would get profit from operating or using the project.

Recommendations

To reduce delays, all parties should consider the following important factors:

1. Separate site clearance (acquisition) work from construction work and it must be finished before estimating cost and schedule for construction phrase and bidding work.

2. Make clear responsibilities among parties in the contract document and use CPM (Critical Path Management) to manage schedule during construction.

3. Make Planning and scheduling: they are continuing processes during construction and match with the resources and time to develop the work to avoid cost overrun and disputes.

Besides the three most above mentioned causes, the following points can be recommended by all parties in order to minimize and control delays in construction projects.

For the Owners

1. Progress payment should be made on time; otherwise, it impairs the contractor’s ability to finance the work.

2. Change orders should be minimized as much as practical during construction to avoid delays.

3. Avoid delay in reviewing and approving of design documents than the anticipated.

4. Check for all resources and capabilities, before awarding the contract to the lowest bidder.

For the Contractors

1. Shortage and low productivity of labor: enough number of labors should be assigned and be motivated to improve productivity.

2. Financial and cash flow problems: contractor should manage his financial resources, plan cash flow by utilizing progress payment and ensure financial during construction.

3. Site management and supervision: administrative and technical state should be assigned as soon as project is awarded to make arrangements to achieve completion within specified time with the required quality, and estimated cost.

4. Subcontractors and suppliers: selecting Subcontractors and suppliers with competence and experience and have also enough financial resources. Contractors should not select Subcontractors and suppliers with low bidding price.

5. Planning and scheduling: they are continuing processes during construction and match with the resources and time to develop the work to avoid cost overrun and disputes.

For the Consultants

Reviewing and approving design documents: any delay caused by the consultant engineer in checking, reviewing and approving the design submittals prior to construction phase, could delay the progress of the work. Inflexibility: Consultants should be flexible in evaluating contractor works. Compromising between the cost and high quality should be considered.

Abstract

In construction project management, delay means the finish date of the project is beyond the date stated in contract. When delay happens, cost often increases because of inflation or other factors. Most construction projects in developing countries, including Vietnam, are suffering two problems: delay and cost overrun.

For the owner, delay means cost more for capital and loss of income from operating the outcome of the project. For constructors, delay means cost more for construction work because spending on materials, labors and vehicles will increase.

Completing project on time and within in-plan cost is an indicator of efficiency in project management. However, construction progress is often changed and affected by unforeseen factors such as: contractor-related problems: Poor site management and supervision, Financial difficulties, Incompetence subcontractors; owner-related problems, design-related and slow site clearance, etc.

This report will try to find out which reasons are main reasons for delay in Vietnam based on previous researches and personal experience of author. Also, solutions for this problem will be mentioned in chapter IV as a suggestion of author.