Cost, Time and Quality | The Golden Triangle in Construction
Project Failure (Cost, Time and Quality)
In all developed projects, a balance between cost and value must be established (CIOB, 2014). The nature of the project would be influential in determining the prioritised objective of time, cost or quality/performance. As outlined in the publication by the Society of Construction Law (CIOB, 2014), the most common causes that result in a project failure, where the lack of clear links between the project and the client’s organisation key strategic priorities with a misunderstanding on the agreed measures of success were the causes of projects not achieving the promised deliverables.
Recent researched into major projects by (Dalton, 2008) as shown in Table 1 found that 75-80% of the causes of projects failing were due to procurement, the definition of project requirements and the client’s management capabilities.
Table 1 - Top 10 risk sources of infrastructure projects failure (Dalton, 2008)
Different procurement models are present in the market with the aim of establishing the desirable roles, relationships, responsibilities and risks carried by the parties involved in an infrastructure project. Moreover, key strategic elements have to be decided early in the project development process of business needs, project and construction objective that will define the most suitable procurement system for the case. Based on the client’s criteria and the construction project itself, different methods on the basis of time, cost and quality are chosen and appraised.
Various procurement models provide minimum risk in terms of cost to the client by spreading it to the various parties down the supply chain and other prioritise completion time of the project with having a high risk on budget overdrafts. For instance, the most popular model of Design and Build offers the client reliable quality, economy and speed as a lump sum contract is appointed. On the other hand, Traditional procurement offers a more innovative design and high standards of performance but will have high risks for the client to run overdue. Management procurement systems due to the release of packages have the opportunity to divert the risk to the various contractors under separate contracts but will have a risk factor in terms of project time and cost due to the price not being known of its totality at the start of the project.
Nevertheless, all the procurement options provide satisfactory performance in the objectives of the golden triangle with emphasis on one particular objective of time, cost or quality which can affect the priority given to the allocation of project resources and the way management is concentrated (Lock, 2013) as well as different levels of risk and control for the client are offered for every model.
Prioritisation of the Golden Triangle
Primary objectives of cost, quality and time are heavily interrelated and are clear benchmarks against which to judge success or failure (Lock, 2013). Not having a clear prioritisation of the golden triangle objectives will result in the failure of delivering the goals set by the client. Hence, establishing from the earliest stages of the preparation of the design brief until the design completion, risk and value management principles should be effectively applied with the emphasis on providing value for money to the client with optimum time and cost without compromising quality, scope and specifications (CIOB, 2014).
Having the need to change the scope or brief of the outline work throughout the duration of the project will have a big toll on the overall cost. Figure 1 demonstrates the relationship between ‘scope for change’ and the ‘cost of change’ set against the time-scale program of a project stressing that the relationship of cost of change dramatically increase as the project progresses towards completion.
The aim of the project manager must be to achieve success in all aspects of the project as set by the design brief (Lock, 2013). However, sometimes project managers are asked to place greater emphasis on achieving one or two of the objectives over the other in a trade-off decision which may cause dysfunction in some project operations (Lock, 2013). As stated before, the complexity of the three objectives has to be addressed simultaneously to achieve an optimum output of results with the use of innovative technology available to the project manager.
For example, the quality of a structure could not be compromised in terms of cost-savings for the fundamental reason of risking the safety and structural integrity, however, specifications can be changed without compromising safety such as interior non-structural finishes (Lock, 2013). Poor quality may result in future maintenance requirements which will reduce the overall profitability of the project since capital funds will be spent on maintenance works.
Nevertheless, recent innovative practices such as prefabrication of structural elements are found desirable in increasing substantially the end product quality since the production is carried in a closed control environment with processes used for defect minimisation. For example, Heathrow terminal 5 increased its productivity by around 10-15% compared to average building sites due to extensive use of prefabrication methodologies (Potts, 2008).
Furthermore, project managers hold the power on assigning contractors and designers hence a background check on long term delivery on quality should be done before agreeing on any contractual packages.
The cost time relationship could be assumed a very vital aspect for the continuity of a project since the constructional cost including design fees, construction contracts, financing costs, land purchase and etc. are crucial to the success of a management operation. If the original timescale as agreed in the contract is exceeded, a chain reaction of overspent will follow such as extended daily operational costs on-site due to more days required for completion of the project. Moreover, direct time-related variables of the project such as material cost and workforce man-hours will add up to the overspend.
Read more in the Books used to write this Article:
Other construction-related quantifiable causes of overspend and loss of time could be identified as inefficient working practices, through lost time due to poor planning, communication and organisations of the operations of a construction site (Lock, 2013).
For example, a project for a charitable organisation with a limited budget will require prioritising the costs of a project. On the other hand, industries such as aerospace and nuclear power have to highly emphasise achieving high safety and reliability hence performance/quality is the most important objective. In the case of short-term construction requirements such as the athlete’s accommodation buildings for the Olympic Games in London 2012, completion of the project on a set date is of paramount importance hence overspend on a budget could be accepted to deliver the project on time (Lock, 2013).
Potts, K., 2008. Construction Cost Management. London: Taylor & Francis.
Pratley, N., 2020. The Guardian. [Online] Available at: https://www.theguardian.com/uk-news/2020/feb/03/at-307m-per-mile-of-track-can-the-cost-of-hs2-be-justified
Dalton, M., 2008. Why Public Sectors projects fail. In: s.l.:construction manager, p. 23.
CIOB, 2014. Code of Practice for Project Management for Construction and Development. s.l.:John Wiley & Sons, Incorporated.