Construction Management Problems Kenya

9 Reasons Why Construction Projects in Kenya Fail

Small and medium sized construction companies in Kenya seem to have a few problems in common. This article looks at a few of these issues that are causing construction projects in Kenya to fail and putting the executing companies at risk. The contents of this article about construction projects in Kenya are based on personal observations and discussions with other project managers.

The Main Root Cause that makes construction Projects in Kenya Fail

Even for significant construction works, there is not enough time to thoroughly prepare and submit quotations and related proposal documents. Often there is just one week or even less given to prepare and submit elaborate offers. The results are:

  1. Superficial Tender Analysis Resulting in Inaccurate Costing,
  2. Wrong Assumptions
  3. Analogous Estimating
  4. Neglecting Important Documents and Information
  5. No Time for Risk Evaluation
  6. Underestimated Client Expectations
  7. Schedules are Not Prepared Following Common Good Practice
  8. Too Late Staff Employment
  9. False Promises

1. Superficial Tender Analysis Resulting in Inaccurate Costing

Due to the time pressure the contractor does not familiarize himself sufficiently with the specification details, which easily can be several hundred pages long for certain construction projects.

Here is the Risk:

The biggest risk here is probably that the construction company will later remain with unforeseen costs. For example because the contractor assumes to use a common material type while the specifications require a particular one. For instance the contractor expectes to install a normal cable while the specifications call for a specific fire rated cable.

Since this detail was known before the bid submission, but was not taken into account, the construction company will probably encounter extra expense.

2. Wrong Assumptions

Contractors assume that the execution of certain works will be similar to the execution of activities during previous projects, without estimating resources and duration thoroughly. Factors that may impact production rates are not well enough evaluated and considered.

Here is the Risk:

The risk is that, on the one hand, the contractor commits himself to unrealistic time schedules for the works execution, and on the other hand, possible time delays and additional resources will in any case incur additional costs.

Unless there are two absolutely identical projects in exactly the same place, at the same time, for the same client, with the same amount of work, the same specifications and quality features, etc., all projects are unique. This is at least true for the project product, while the project management processes remain  the same, but may be weighted differently depending on the client.

3. Analogous Estimating

Because detailed cost estimates are not possible in the shortness of the time given, the contractor relies on figures based on historical date from previous projects.

Here is the Risk:

The use of historical data always carries the risk that it is out of date and moreover does not apply because it is based on different fundamentals. Consequently, this can result in additional unforeseen cost.

Therefore, it is very risky to simply take the details of a previous project and assume that the same result will be achieved under different circumstances.

4. Neglecting Important Documents and Information

Due the described time constraint the calculation of the offer price is almost exclusively based on filling the bill of quantities (BOQ), which is a document produced and provided by the client.

Here is the Risk:

The main risks are that certain features and deliverables may exist in the scope of works statement, in drawings or other tender documents, but may have been overlooked and not included in the BOQ and consequently aren’t priced. Secondly, the quantities to be finally executed are almost always deviant from the BOQ quantities. Both certainly have cost impact. Depending on the type of the contract it may be favorable to the contractor if quantities increase, but if quantities decrease the entire price calculation for the item may become wrong.

Once the contract including the scope of works statement has been signed, it is very difficult to agree changes with the client in this regard, as long as this information was known before the contract was signed.

Quantity deviations outside of a certain percentage often can lead to re-negotiations. It is important to notify the client in good time if quantities are likely to change significantly. The percentage may vary from country to country.

5. No Time for Risk Evaluation

construction projects in Kenya - false promises

Risk evaluation and planning is not given sufficient attention. Risk reserves, if any at all, are taken into account only by instinct and roughly.

Here is the Risk:

As long as risk reserves are not properly calculated and known, it is fundamentally uncertain whether they will be sufficient in the end.

I think one can say that every business is risky to some extent, and that’s especially true for the construction industry. With this knowledge in mind it is very incomprehensible that this important aspect is so often neglected or superficially treated.

6. Underestimated Client Expectations

More and more not only product quality, but also process quality, as well as health, safety and environmental considerations, play an important role and are often not sufficiently taken into account.

Here is the Risk:

This factors can quickly have a significant impact on cost and schedule if they are not sufficiently considered. Here, it seems as if construction companies are experiencing a terrific awakening, when projects are to be carried out for international clients, or when projects are funded by the African Development Bank or the International Finance Corporation.

The stakeholders mentioned above have a valid interest that what they finance makes sense, that the money is well spend, that no one is harmed or more than necessary impeded or inconvenienced, etc. It is the contractor’s responsibility to take these things into consideration and, of course, they are associated with effort and consequently cost.

7. Schedules are Not Prepared Following Common Good Practice

Resources and durations are not thoroughly estimated, the linkage of activities is not well enough realized and the entire time schedule does not follow international standards or common good practices, and seems to be geared towards creating a document that confirms that certain work will be completed by the given date.

Here is the Risk:

One of the biggest risks of missed project goals seems to be the problem described above. Any time delay automatically also affects the costs baseline, and any additional resource surely costs money.

Again and again it can be observed how little attention is paid to the preparation and the subsequent monitoring of a detailed time schedule. I believe it can be said that the better this is worked out, the greater the likelihood that project success will eventually materialize. Otherwise, material is ordered when the previous material is nearly used up, and everyone does as much as he or she are comfortable with and only too late it is observed that the resources and the required daily performance are in imbalance.

The schedule is simply a colorful document that is given no further value.

8. Too Late Staff Employment

Very often the project manager and team members will be hired only after the construction contract is finally signed. This hiring process can easily take a few weeks or even a month time. Often, the intended people are no longer available and people are hired who are known only from their resume and interview.

Here is the Risk:

Although the procedure is fundamentally understandable, it still has significant drawbacks, as the project manager and the core team’s late employment has a substantial impact on the detailed planning. Without or too late detailed planning, the entire project becomes a venture with an uncertain outcome with regards to cost and time.

construction projects in Kenya - project phases

Project Phases

Due to this problem projects are often delayed shortly after signing the contract and it is very difficult to make up for this initial delay. Not to mention lost customer confidence. Unfortunately the situation is such that the very late engagement of the project manager to some extent limits him or her initially to become the administrator of the current situation and his or her skills are only used to make the best out of it, until the planning deficits are reasonably worked up and corrected. The time span between points A and B is often lost immediately.

 

9. False Promises

Promises and commitments are made that may be hard or impossible to fulfill in order to secure the contract. These commitments almost always have a financial or a schedule background.

Here is the Risk:

construction projects in Kenya - over committing

False Promise

Unless it was considered from the beginning that the client will ask for a discount or for a quicker execution, such commitments are always made to the detriment of profits or contingencies, which as described above are anyway often not evaluated in details.

It is clear that almost nowhere in the world without negotiations and concessions, a contract is concluded. However, it is important to ensure that a contract is not signed at just any price. In the end, nobody benefits if promises are made that cannot be kept.

 

Many of the above problems and resulting risks can be avoided by just giving enough time for the perusal of the tender documents and engaging the right people in the right number and at the right time.

Let me know your experiences.

 

Also read about outsourcing project management services.

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How to Start Later and Finish Sooner

According to a survey among German project managers and sponsors, as well as observations in daily project life, an inadequate project initialization phase is often devastating the outcome of projects. Two German management consultants Bernd Friedrich and Daniel Schaetzler carried out a study on how to start later and finish sooner. They identified large project time-wasters in the course of their survey. Below is a summary of most root-causes. Avoidance or significant reduction is possible during the project preparation phase.

The Main Problems

Their motivation to examine how to start later and finish sooner results from their experience as managers and consultants. They soon found out that the key to project success obviously lies in the project preparation phase, as well as most of the causes of project failure.

They present the following three issues that seem to be very common:

  1. No clear objectives combined with minimal management support even after several month into the project life cycle had a tremendous impact on the motivation of the project team.
  2. Absence of a clear project management approach and no IT support for scheduling, cost, risk and other planning and controlling activities.
  3. Absence of sufficient resource planning and consequently of course no commitment by responsible providing departments. However, the project had already used up 50% of the budget and 80% of the originally expected duration. It was confusing that the project status was still classified as green-yellow, even though not even a baseline existed as a basis for assessment.

Friedrich and Schaetzler interviewed experienced project managers as well as clients for their top three of the biggest time wasters in projects. According to their survey the following are the biggest contributors to wasted time:

how to start later and finish sooner - avoid this project time wasters

Biggest Project Time Wasters – source: http://sups.pro, 2017

The Foundation How to Start Later and Finish Sooner

Although this statement is intuitively clear to everyone, even today many projects start very unprepared and without:

  • A clear goal,
  • The right project team, and
  • The necessary resources.

Why is that? Although there are many reasons two of them seem to stand out:

  1. The management is under enormous pressure to act and implement projects quickly. This often leads to doing things for the sake of doing things, and costs a lot of money in the course of the project life cycle.
  2. The organization is not yet ready for the project. The project manager and his team are engaged far too late and without clear objectives. The project management approach is unclear and only determined during the course of the project. These factors often lead to frustration and project team work overload. In consequence the project team is often demotivated before the project even really kicks off.

Let’s take a closer look at three of the typical time-wasters and discuss ways to eliminate them during the project start-up phase. For more time wasters, see www.sups.pro/zeitfresser (page in German language).

Time Waster: Ambiguous Project Goals and Project Approach

The inadequate definition of the project goals before the start of the project is extremely typical in project management.

Often enough, goals are not based on “SMART” criteria (SMART = Specific, Measurable, Achievable, Time-bound). Everyone knows immediately that unclear targets are worthless. The question is why this is often not the case in reality. Goals are often either not achievable or not measurable and in anyway unrealistic and not achievable targets cause frustration. The typical response is “We cannot do that anyway, everybody knows that”.

For example, a renowned international top management consultancy advises its clients to set project goals at just 200% and build up great pressure. Therefore, everything beyond 50% is already a success for the organization. The reality, however, is that fear builds up before the start of the project. The result is, frustration combined with a loss of client confidence. In the case of very little ambitious goals, however, the team might think: “We have enough time, let’s get other things right first”. The project is put aside – and not given priority anymore.

Solution: The Project Charter

A project charter coordinated with the future project manager and the line management is the prerequisite for a successful project. In addition to specifying the goals and other subjects, the

  • Project management approach must be specified,
  • Project phases and milestones must be fixed,
  • Requirements must be included (and trained where necessary).

Time Waster: Insufficient Risk Management

Unpredictable events throw over the entire project schedule or even jeopardize the project in its entirety. Thereby, about 95% of the risks are predictable timely enough to allow the implementation of a suitable risk response strategy. In some companies they say “Project Management is Risk Management”. The difference between normal line activity and project work is that surely there are far more risks in projects. Projects are by definition unique, create something new and run outside the normal line organization.

Despite its high importance for a project, apparently risk management is among the most neglected activities. Obviously many employees struggle dealing with uncertainties and assumptions. And yet, the process of identifying project risks and creating a conscious way of dealing with them is not that difficult.

Solution: Risk Evaluation

In a brainstorming session, the team evaluates everything that can go wrong in the project along the line. In the next step they estimate the probabilities and the impact on time, cost and scope. At the latest at this point, most of the team members are reluctant to commit to specific values. However, this assessment is the basic condition for focusing attention on the most important risks and appropriates response strategies.

If the risk owners are identified and named in the next step and the value of the risks are considered in the project schedule and cost baselines (deadlines, costs), the basis for a successful project is definitively improved.

Finally, risk monitoring and controlling during the entire project life cycle, and until a specific risk stops existing, increases the project success probability. Monitoring & controlling include in particular the following activities:

  • Identification of new risks,
  • Updating the probability and impact of risks that still may occur,
  • Closing the risks that have occurred or are no longer relevant,
  • Monitoring the risk mitigation or other response processes,
  • And consequently updating the schedule and the budget.

Please check the Risk Register Template.

Time Waster: Insufficient availability of resources

Detailed planning of the required resources to carry out individual work packages is essential to the project success. In the end, a task cannot be fulfilled if the resources are not available. If the resources are not available in sufficient numbers, a task can probably still be carried out, but it will perhaps take much more time. Basically, you can do a specific task with one excavator in 2 months or with 2 excavators in one month. The number of excavator hours remains the same in the end. If the schedule allows two months to complete the task, one excavator should be sufficient in principal. If you only have one month and you are trying with one excavator, you are likely to experience 1 month of delay and related costs. The extra cost will probably exceed the cost of another excavator for a month.

It is important to further ensure that shared resources are available to the project to the agreed extent. In case of conflicts, it is necessary to agree on priorities from the beginning.

Conclusion

To make a project successful, one needs to invest time and money in the project initiation.

During the initiation, the focus should be on the following topics (in addition to the general feasibility of the project goals):

  • Clear scope definition (what is part of the project and what is not),
  • Definition of SMART targets,
  • Commitment of the organization to provide the necessary resources,
  • Rough deadline, budget and resource plans,
  • Appropriate risk analysis,
  • Qualified project manager and project team,
  • Appropriate PM methodology and IT support.

If these topics are clearly defined and accepted by all, nothing stands in the way of the success of the project.

Are you in a similar situation? See here how to get help…

Please also read my article why construction projects in Kenya fail

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