Growth Of Industrial Sector In Saudi Arabia Construction Essay

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This research addresses the issue of delay factors in large industrial projects during engineering phase of project's life cycle used by project managers. It examines frequency, severity, extent, and importance of the delay causes in engineering phase of large industrial projects in Saudi Arabia. A considerable number of research on delays in construction projects have been conducted in the literature, yet delay in engineering phase of project's life cycle has not been the focus of much studies. In recent years, delay causes in engineering phase have been tackled only in two works (Yang and Wei, 2010; and Marzouk, El-Dokhmasey and El-Said, 2008). In the 2008 study, twenty two causes were identified and classified into three groups. Additional diggings about more causes of delay was conducted by the researcher through interviewing expert project managers in Saudi Arabian companies. The researcher found thirty causes of delay and were categorized into five main factors of projects delay. In this study, a field survey is accomplished through a structured questionnaire to test these causes. It covers eleven multi-discipline engineering consultant firms which provide general engineering services to the major Owner of industrial projects in Saudi Arabia. Frequency and extent of project delay in engineering phase are examined using simple statistical calculations such as mean and standard deviation. The causes of delay then ranked based on importance index ratios. Analytical Hierarchy Process (AHP) is also used to rank the categorized factors of delay.

INTRODUCTION

Background

In engineering phase of industrial projects, there are two main parties. First party is Owner of industrial projects while the second party is engineering consultant firm who designs industrial projects. First party refers to in this research as (Owner), while the second party refers to in this research alternately as (Engineer) or (Designer). A secondary third party exists rarely in a form such as contractor, subcontractor, supplier, and governmental authority.

In industrial projects, time is more critical than any other kind of projects. This is for the reason that delay could cause a big loss of money. Furthermore, economies of countries depend mainly on the industrial field. Therefore, project schedule time is tremendously significant: "Time is Money", or "Time is of the Essence" (Randall Bell, 2011). In fact, money and time drive and motivate contract parties to work hard. Successful project managers always think about the performance measure, which are time, cost, and quality (Doyle, Nardone, & Krisnan, 2005).

With regards to delay, it means consuming extra time than it is scheduled for or budgeted to. Time performance in the engineering phase of industrial projects is significantly important to both Owner and Designer. It is well established that the most worrying industrial design disputes involve failure to accomplish the works within its timeframe (Assaf & Al-Hejji, 2006).

Even though industrialization in Saudi Arabia is comparatively new, it is going through a rapid growth. Industrial projects in Saudi Arabia play a great role in supporting the government strategies to achieve Saudi economic goals. Table ‎1 . Industrial Factories Sizes and Investments (1974 - 2010) indicates the increased progress in the number of major sectors in industry and volume of their investments during the period from 1974 to 2010.

Table ‎1. Industrial Factories Sizes and Investments (1974 - 2010)

Figure ‎1. Growth of Industrial Sector in Saudi Arabia

As illustrated in the table, the number of industries has jumped dramatically from 198 to 4,645 in less than four decades. As a result, the capital of investment was increased as of SR 12 billion to about SR 404 billion (SIDF, 2012).

Petrochemicals, Oil, and gas are the main and largest industries in Saudi Arabia (see Figure ‎1 . Growth of Industrial Sector in Saudi Arabia). For this reason, the researcher focuses only on this line of industries. This research pays attention to Saudi Aramco as the Owner of the largest industrial projects in the kingdom. Saudi Arabian Oil Company (Aramco) is the number one oil producer company all over the world. It launched a new contract called General Engineering Services Plus (GES Plus). This contract has been activated starting from the beginning of 2012. It aims to conduct all engineering services in-Kingdom and to enhance the training and domestic recruitment. Saudi Aramco identifies engineering consultant companies which are capable to carry out Front End Engineering Design (FEED) and detailed engineering design to award them GES Plus contracts. The approved Engineers should provide detail engineering drawings, Project Management Services (PMS), and material procurement to improve its program. So far, There are four consortiums are already awarded GES Plus contracts involving eleven qualified entities. Additional contracts will be signed with other contracting companies that involved in GES Plus biddings once they fulfilled its requirements.

Any project with Saudi Aramco has to follow a pre-defined procedure. First phase of this procedure is the preparation of project's document which named Design-Basis-Scoping-Paper (DBSP). It represents the scope of work, and it is prepared by Facility Planning Department (FPD). Once DBSP is issued for a specific project, Aramco after that invites contractors to do the project proposal of this project. Contractors then have to do sort of preliminary engineering for the project by generating some key drawings for the project according to Aramco Standard SAEP-14. This standard lists down all of deliverables which is required to satisfy the project proposal. The preliminary drawings take account of basic drawings including but not restricted to Process flow diagram (PFD), some of Pin IDs for piping instrument diagram, Block Plan, very preliminary one line electrical diagram, and Facility Floor Plans. The project proposal is not enough to build the facilities because it has no enough details. So, as Engineer done with project proposal, the Owner has two options:

he can either proceed with Engineering Procurement and Construction (EPC) under Lump Sum Turn Key delivery system (LSTK)

or he can go for detailed engineering design under Lump Sum Procure and Build delivery system (LSPB), see .

If the Owner proceed with the first choice, then Owner will take less headache. This is because the contractor has to do everything starting from the detailed engineering, passing through procurement and end up with the construction of the project. But if the Owner went to the second choice, it means the Owner has to continue the project proposal package and complete the detailed engineering design to be able to built the project (Abu Zaid, 2012).

Figure ‎1 Project lifecycle overview

The term "Delay" in engineering phase of any project means that the time is overrun the due date of submitting the design deliverable for that project. In other words, delay represents an extended time required in order to complete the design (Andi & Lalitan, 2010). The "delay" used in this research means the time is overrun the scheduled time even though the Owner approved the time extension or change order.

Statement of the Problem

In the literature, it is well recognized that delays have negative effects on construction projects in general and industrial projects in particular. When engineering phase is considered, delay leads to conflicts between Owner and Designer. In addition, delay increases costs, loss of efficiency and productivity, and could end up with contract termination (Tumi, Omran, & Pakir, 2009). The researcher works in an engineering consultant firm that provides general engineering services to industrial companies. It is evident that delay can be found in many industrial projects in the engineering phase. Consequently, parties who suffer from delays need to be aware of the factors that affect delays. The need to study the causes of delay and try to find serious practical solutions is currently demanding. The present study brings these causes along with their frequency, severity and the extent of delays to the attention of the involved parties which can help to take necessary actions and precautions to prevent any delay.

The delays in engineering phase of industrial projects could raise several questions such as:

What are the main factors and causes of delay?

How much is the frequency of delay?

What are the consequences of delay on industrial projects?

How sever and to which extent is the delay?

Which party is responsible for delay? (Doyle, Nardone, & Krisnan, 2005)

This study is, in fact, attempting to fill out the gap in the literature by answering the previously mentioned questions in order to determine the frequency, severity, extent, and causes of delay in the engineering phase of industrial projects in Saudi Arabia.

Objectives of the Research

The main objectives of the research can be summarized in the following points:

To identify and list the factors affecting delay in the engineering phase of large industrial projects in Saudi Arabia.

To examine the frequency, severity and the extent of each factor.

To determine the importance of the factors affecting delay.

To rank the factors affecting delay based on the severity of the factors and the frequency of occurrence using the Quantitative method of Analytical Hierarchy Process (AHP).

To investigate and suggest strategies to avoid delays in the engineering phase of industrial projects in Saudi Arabia.

Scope and Limitations

This study focuses on exploring the factors affecting delays in the engineering phase of industrial projects (petrochemicals, oil, and gas) in Saudi Arabia. Based on a constructed questionnaire, this study examines the delay causes in different aspects, which are more frequent, degree of severity, and the extent of delay. The targeted companies are eleven, which are the companies that newly awarded a GES Plus contract with Saudi Aramco as the Owner of largest industrial projects in Saudi Arabia. This study will only cover the phase of preparing design of project proposal what so called FEED.

Results of the questionnaire are limited to simple statistical calculations such as mean, and importance index. To rank the factors of delay, AHP analysis will be applied using Expert Choice computer software.

LITERITURE RIVEW

General

In industrial projects, as for other construction projects, the key objective is to deliver a successful high quality and safe product with a time-cost effectiveness (Randall Bell, 2011). Project managers always aim to reduce both time and cost. There are different influences on the cost for every phase of industrial projects. It is obvious that the cost influence in the engineering phase is way greater than it is in the construction phase. Additional to the cost, the delay in the pre-engineering phase impact the construction schedule in case it is already predetermined. The importance of the delay analysis comes when studying its effects on the critical path and hence the project completion date. So, determining and studying the factors affecting delays is essential in order to solve delays (Yang & Wei, 2010). Thus, predicting the chances of delays may help to avoid them and successfully submit projects as scheduled, ''we cannot manage what we cannot measure" (Luu, Kim, Tuan, & Ogunlana, 2009).

Delay is defined as the time in which project is extended or suspended in some phase due to unanticipated circumstances. This means the work is being retarded, but not stopped entirely, and this delay will impact the project schedule as total (Abdul-Rahman, Takim, & Min, 2009). The majority of the previous studies focused on delays' factors in the construction phase but not in the design phase. This research discusses the delay that occurs only in the design phase of industrial projects.

Industrial projects have different potential sources of disputes. This is because the projects are different in their requirements in their characteristics and they are not repeatable. The disputes are come during the pre-engineering phase as a result of complicated actions that are taken by the concerned parties. However, it is seldom that projects accomplished on scheduled time without having any difficulties (Assaf & Al-Hejji, 2006). The main cause of dispute is delay during design and/or construction phases. Delay disputes, like other disputes, can be solved by using different techniques such as mutual negotiation, median, or reconciliation. Delays of course lead to significant losses to all related parties. For Engineers, delays cause losses in three ways: (1) Extra overhead cost due to long design period; (2) More man hours, of both regular or overtime rate, which will be needed for Designers to complete the project; (3) Penalty cost against the Engineer.

Based on the type of delay, it is classified into six types: (1) Engineering-related; (2) Construction-related; (3) Financial/Economic; (4) Management/Administrative; (5) Code-related; (6) Acts of God (Marzouk, El-Dokhmasey, & El-Said, 2008). The researcher in this report is only concerned about the first type of delay.

Types of Delays

Engineering-related delays happen due to many factors which can be grouped into: (1) Delays in the Design Development; (2) Delays in the Work Shop Drawings and/or related approvals; (3) Delays of Project Parties Changes (Marzouk, El-Dokhmasey, & El-Said, 2008).

Design Development Delays

It is the most time-consuming activity compared to the other engineering activities. In the early beginning of this stage, the Owner identifies the project's needs to the Engineers in a form of a "scope of work" to prepare concepts for a proposed project. Then, the Engineer starts preparing project's drawings and specifications. These preliminary drawings are used in developing project design. Possible changes in the scope of work might lead to delay in the overall scheduled design time. Also, any slow responding by the Owner to Engineer's queries that could arise during the design development is another cause of delay. The previous mentioned causes of delay are comes from the Owner side. The Engineer also can be a part of delay causes, for example when there is a lack of resources, human or facilities, or lack of experience. Professional Designers admit that errors or shortcomings could happen incidentally from time to time. Therefore, it is impractical to expect a free-error design from Engineer (Nirmal Kumar Acharya, 2006).

Engineer can handle industrial projects under two types of delivery systems: (1) Design-Bid-Build (D-B-B); (2) Design-Build (D-B). For either system, it determines the responsible party of the delay. In D-B-B projects, the Owner provides the design either by his own employees or by a consulting engineering firm. Then contractors submit their bids to project Owner to select one of them. While in D-B projects, the Owner allocates a single entity which is responsible for both engineering and construction of the project. The entity could be either a firm that has in-house design and construction employees, or it could be a construction firm that hires an external Engineer to design the project under the umbrella of D-B (Marzouk, El-Dokhmasey, & El-Said, 2008).

Work shop Drawings Delays

The term (shop drawings) refers to the design drawings, specifications, schedules, illustrations, and other data or which are particularly prepared by Engineer (Wertman, 2008). Work shop drawings stage comes directly after design development stage. Work shop drawings are always the responsibility of Engineer to prepare. They are prepared to provide more details about project design. The precision of the prepared work shop drawings is related to the quality of the design itself and the professionality of the team that carry out such drawings. In order to avoid delay, work shop drawings should be always revised and reviewed in timely fashion (Hatem & Lenart, 2010). Delays could happen anytime during preparation, submission, or even getting approval of work shop drawings stage. Engineer cannot start preparing these drawings unless the project Designer submitted the design documents. If there is a delay in submitting the design document, then the work shop drawings preparation will be delay accordingly (Ostanik, 2007).

Project Parties Changes Delays

Changes are one of the major causes of delays in industrial projects. Changes sometimes impact other activities of the project and the degree of severity is changed from one case to another. Therefore, the delay may be only affects a specific activity or even the entire scheduled time of the project. Both Owner and Engineer can cause delays or even a third party such as governmental authorities. There are many reasons to request a change. It is important to study these reasons in order to determine the responsible party and the compensability of each delay reason regarding to the changes (Marzouk, El-Dokhmasey, & El-Said, 2008).

Causes of Delays

In the stage of the design development, delays may occur because Engineer has insufficient staff or services. This makes the Engineer incapable to handle project design on time. Another reason is when Owner is late in submitting project documents to the Engineer. These documents enable the Engineer to understand Owner's requirements (Haseeb, Xinhai-Lu, Bibi, Maloof-ud-Dyian, & Rabbani, 2011). Also, when project documents are incomplete, this for sure will lead to asking for extra information and delay. Slow response to Engineer queries is one of the major causes of delay in designing stage. Another reason is design modification to meet Owner's requirement.

In the preparation of work shop drawings, mistakes in the design documents (drawings, specifications, bill of quantities, etc) that need modifications are causes of delay. Addition, slow actions by Engineer in the process of preparing the package work shop drawings. Even if work shop drawings are ready, Engineer lateness in submitting work shop drawings to the Owner is another cause of delay. As for the Owner, lateness in submitting the design documents to the Engineer (only in D-B-B system). Poor following up the approval process is negligence either by Engineer or by Owner which lead to delay.

Change-Orders is a magnitude factor of delay, it is very common in industrial projects specifically. The reasons behind requesting for change orders are vary. Errors in the design documents provides drawings don not meet Owner requirements. In some cases, constructability problems and changing methods is the reason. However, unavailability of materials is another cause which is solved by requesting alternative specifications for the material. Furthermore, Owner's construction procedure interest is changed, this means the design have to be modified accordingly. Similarly, contractor might fail to procure some equipments or materials and ask for change of construction procedure. Also, adding or eliminating activities to the scope of work is an important factor to consider. Another cause is poor performance of Engineer or exhibiting an unexpected condition would require a change. Changes are also might be requested by the governmental authorities, the causes are: Incompatibility of work shop design or design documents; or incompatibility of the work procedure and/or construction method to the local regulations or safety requirements; or new regulations are issued (Marzouk, El-Dokhmasey, & El-Said, 2008).

Finally, Engineer should submit work shop drawings on time to the Owner to enable him to get related approvals without any delay. Any errors in the work shop drawings will retard the Owner from getting the approval on time. On the other hand, Owners should commit to pay financial obligations regularly and without delay according to contract (Sambasivan & Soon, 2007). Owner failure to pay according to financial terms of contract is a major cause of delay. It should be put into consideration that any delay happens by one party is an excuse for the other party delays because their activities are somehow intersected. So, all contract involved parties must stick on the timeframe obligations stated in the contract (Abdul-Rahman, Takim, & Min, 2009).

Origins of Delay

First of all, delay can be caused by any party of a contract. During project phases, Owners, contractors, subcontractors, Engineers, suppliers, utility companies, or even nature are orign of delay (Andi & Lalitan, 2010). In the engineering phase, there are only two parties; Owner and Designer. This paper focuses on delay orign, or in other words who is responsible of the dealy in the engineering phase.

In the design development, it is obvious that any delay in D-B-B system is Owner responsibility. While it is a shared responsibility between both parties in D-B system. The share of each party in the responsibility depends on how this party commit to the contract obligations. Figure ‎2 . Flow chart of delays in design development shows a chart illustrating the origin of delay in design development stages. Engineer has the right to fairly increase the time duration of the design development in case Owner requested additional works or changed the scope. The same thing is applied when Engineer discovers mistakes in the priliminary docuents received from Owner. Time limits, such as responding to queries or requests, are usually stated clearly in the contract between involved parties.

Figure ‎2. Sub-hierarchy for the Three Types of Delays and Responsible Sources.

In the stage of preparing work shop drawings and getting associated approval, it is the responsibility of the Owner when any delay occurs in D-B-B projects. While it is the responsibility of the Engineer in D-B projects since Engineer is the one who prepares the work shop drawings. Figure ‎2 . Flowchart of delays in work shop drawings shows a chart illustrates the origin of delay in preparing work shop drawings stages. It is excusable and compinsable when the Owner delays in responding to Engineer requests or queries (Marzouk, El-Dokhmasey, & El-Said, 2008).

Figure ‎2. Flow chart of delays in design development

Figure ‎2. Flowchart of delays in work shop drawings preparation

Figure ‎2. Flowchart of delays in work shop drawings approval

STRUCTURE OF RESEARCH

Methodology

This study is a field survey research. A structured questionnaire is used as a mean to collect required data. The questionnaire was directed to both industrial project Owners and project managers in engineering consultant firms in Saudi Arabia.

The research study follows the steps shown in Figure ‎3 . Research Methodology Diagram. It can be summarized as the following:

Constructing a comprehensive literature review for the topics related to this study besides visiting correlated companies and interviewing professional consultant Engineers and experts in the field of Engineering consultancy of industrial projects. This is done to gather needed information concerned with the factors affecting delays in the engineering phase of industrial projects, and to explain regulations and terms pertaining to delay in industrial projects in the engineering phase.

Designing a comprehensive questionnaire from the data collected. The questionnaire covers the causes of delay and the required data.

Establishing and publishing an on-line questionnaire survey by using Google documents and sending the questionnaire web link to the proposed respondents. This technique makes it easy to fill out and to encourage participants to respond quickly.

Using statistical calculations and Analytical Hierarchy Process (AHP) as a quantitative technique to analyze the collected data by applying "Expert Choice" computer software.

Reporting and reflecting on the results.

Summarizing findings in order to expose recommendations and

Figure ‎3. Research Methodology Diagram.

Questionnaire Development and Design

Based on the research objectives, the questionnaire was developed using the information got from the literature review. There were twenty one causes of delay subtracted from the literature review. Six expert project managers from different engineering disciplines were interviewed to discuss the list of delay causes. The feedback from experts was valuable since some of cause were eliminated and considered not valid for this study. Other causes terminology was ambiguous so they had been paraphrased. Some experts added new causes that can be sources of delay. The researcher ended up with thirty causes of delays in industrial projects in Saudi Arabia. Theses causes of delay are categorized into five main factors. Questionnaires from other relevant studied were reviewed to develop a new questionnaire that fits the objectives of this research.

The questionnaire consists of three main parts which are (A), (B), and (C). An introduction also provided to give respondents a clear idea about the study, definitions, and responses term to use in the questionnaire. Part (A) discuses general information regarding both the respondent experience and his company. Part (B) includes the five factors of delay in the engineering phase of large industrial projects in Saudi Arabia and their corresponding list of delay causes. This part asks about two things which are frequency and severity of each delay cause. Both questions are based on a five-point scale. A pair wise comparison is conducted two times in this part, one to measure the importance index between delay factors while the other to measure the importance index of responsible parties for each delay factor. Part (C) deals with the extent of delay in the engineering phase of large industrial project in Saudi Arabia. An additional question was added to this part to reflect actual delayed projects and to compare the contract period of delayed project versus the actual finished time.

Figure ‎3. causes of delay in the designing of industrial projects in categories.

Figure ‎3. Sub-hierarchy of the five factors of delay and responsible sources of delay.

Sample Size Determination and Selection

As mentioned in the scope, this research conducts a field survey that deals with Saudi Oil Company (Saudi Aramco) as the Owner since it has the largest industrial projects in Saudi Arabia. Saudi Aramco signed four GES Plus contracts with four consortiums consist of eleven companies as engineering consultants that represent the targeted population of this study. The questionnaire was distributed to 100% of the population that consists of eleven companies and the Owner. Total of twenty two valid responses were targeted (eleven by the Owner and other eleven by Engineers).

Scoring System

Part (B-1) uses a scale of 5 points to measure the frequency and severity of each cause in a quantitative manner. The weights of the 5-point scale are illustrated in the following table:

Table ‎3. Weight of frequency of delay causes.

Table ‎3. Weight of severity of delay causes.

The following formulas are used to calculate frequency and severity index:

Equation

N=X1+ X2+ X3+ X4+ X5

Equation

Equation

Where:

Ai = The assigned weight for the frequency and the severity of each the cause (i) as illustrated in the previous tables.

Xi = Variable number of the respondents who ticked answer (i)

N = Number of respondents

n = N-X5

After that the Importance Index can be calculated by using the following formula:

Equation

IMP. IND. % = (F.I. *S.I.)*100

DATA ANALYSIS AND RESULTS

Description of Respondents

This section discusses the description of the respondents which included eleven Owners and eleven Engineers. The respondents are located in Eastern Province, but their projects cover Eastern, Western, Northern, Southern, and Central Region. The questionnaire was answered by project managers, chiefs department, general managers, and senior Engineers. They are expert Engineers who have experience of mostly more than 10 years.

The survey classified the experience into two parts, company experience and respondent experience. It is found that the experience of 95% of the companies exceeded 10 years, and the experience of 90.91% of the respondents exceeded 10 years as shown in Table ‎4 . Experience of respondents and companies in industrial engineering..

Table ‎4. Experience of respondents and companies in industrial engineering.

The companies involve in design of projects in different regions, but mainly in Eastern, Western, and Central region. Out of the total of the 12 engineering companies, 12 have projects in eastern region, 8 companies have projects in central Region, 10 companies have projects in Western region, 2 companies have projects in Northern region, and 3 companies have projects in Southern region. Table ‎4 .Engineering companies region of operation. shows the percentage per region operation.

Table ‎4.Engineering companies region of operation.

Delay in Large Industrial Projects

Frequency of Delay

Twenty two respondents reported to have completed more than 696 projects. The respondents experienced delay in approximately 86 of these projects which represent 12.36% of the total projects number, see Table ‎4 . Average frequency of delayed projects..

Table ‎4. Average frequency of delayed projects.

Respondents were asked to select 3 delayed projects during the last five years. The projects were classified into four categories, as shown in Table ‎4 . Frequency of Delays in Industrial Projects between 2009-2012 - Case Studies., according to the size of the projects in man-hours. It was found that the overall average of 66 projects with approved extension is 90.91%. This gives an indication that the Owner either accepted a partial responsibility of causes of delay or shows willingness to cooperate with Engineers to solve mutual problems. Firstly, 96.3% of the delayed projects of 1-5 thousand man-hours were extension approved. Secondly, 88.89% of the delayed projects of 6-10 thousands man-hours were extension approved. Thirdly, 87.50% of the delayed projects of 11-15 thousands man-hours were extension approved. Finally, 85.71% of the delayed projects of more than 15 thousands man-hours were reported to have an extension approved.

Table ‎4. Frequency of Delays in Industrial Projects between 2009-2012 - Case Studies.

Extent of Delay

The extent of delay in industrial projects was divided in the questionnaire into 4 categories as shown in Table ‎4 . Average extent of delayed projects.. Out of 22 respondents, 9% believe that the extent of delay is less than 10% or above 50% of the project duration. While the majority of 50% reported that the extent of delay is from 10 to 30% of the project duration. Where there were around 32% of the respondents reported the extent of delay to be between 30 to 50% of the project original duration.

Table ‎4. Average extent of delayed projects.

The actual extent of 66 delayed projects was reported by 22 respondents. Projects had a design duration varies between 6 to 18 months, and had values between one thousand to fifteen thousands and above. All of these projects were designed in the last five years (2007-2012). Table ‎4 . Extent of Delays in Industrial Projects - Case Studies. shows actual delay extents of the projects, classified based on project size in man-hours into four groups: 1 thousand to five thousands of man-hours, six to ten thousands of man-hours, eleven to fifteen thousands of man-hours, and above fifteen thousands of man-hours.

Table ‎4. Extent of Delays in Industrial Projects - Case Studies.

The results show total original (contract) duration in comparison with total actual duration to calculate the average extent of delay, and the total requested extension compared with approved extension. The overall calculated average extent of delay indicates an average of 14.94% for all reported delayed projects. The small projects that have less than 5 thousands man-hours experienced highest average extent of delay (19.51%). As the size of project increases by a range of five thousands man-hours, the average extent of delay decreases. Projects with the size of 5 to 10 man-hours experienced 15.24% average extent of delay. Projects of 11 to 15 man-hours exhibited around 13.28% average extent of delay. Finally, Projects of more than 15 man-hours encountered 72% average extent of delay.

Almost all delayed projects had a requested time extension. It was found that 87.8% of the requested time for extension was approved. For projects that have less than 5 thousand man-hours, around 94.12% of the requested time for extension was approved. While 90.48% was approved for projects of the size from 6 to 10 thousand man-hours. And about 86.11% was approved for projects of the size from 11 to 15 man-hours. Lastly, only 81.25% of the requested time was approved. The high percentage of approved extension time gives a clear indication that most, but not all, delays are excusable.

Responsibility for Delay

Delay causes are divided into three categories based on the responsibility for delay. Since there are only two parties in the engineering phase which are Owner and Engineer, the three categories of delay responsibility are Owner responsibility, Engineer responsibility, and Owner/Engineer mutual responsibility. The following are the lists of the delay causes of each category:

Delay causes by Owner:

Unavailability of scope of work

Ambiguity in scope of work

Delay in providing project documents and specifications

Incompleteness of project documents and specifications

Unavailability of existing drawings and/or information

Slow in responding to queries

Access to site permission procedure

Delay in progress payment

Adding extra scope of work to already agreed

Process of approving change orders

Changing construction methods (project requirement)

Errors in project documents and specifications

Delay causes by Engineer:

Insufficient data collection or poor survey

Incapability of consultant engineering firm

Insufficient/ inadequate team of Engineers

Poor/ inexperienced designing team

Awareness about standards and procedures

Unavailability of advance engineering software

Overcommitted (overloaded) Engineers

Poor following up

Compressed project schedule

Slow actions in preparation of design package

Design modification to meet project requirements

Conflict with governmental authorities regulations or safety requirement

Design conflicts with standards

Unavailability / approval of selected materials

Constructability problems

Delay causes with mutual responsibility of both Owner and Engineer:

Misunderstanding of project documents

Poor interaction in meetings and/or coordination

Unexpected/ unforeseen additional requirement. Causes and Sources of Delay

Frequency and Severity of the causes

The scoring system that described in section 3.4 is used here to measure the frequency and severity of the delay causes. Statistical methods are used in order to interpret and analyze the data collected that related to frequency and severity of delay causes.

The calculation results of the scoring system as statistical variables of both frequency and severity are listed in Appendix (B). The mean of the frequency is found to be in the range of 2.86 to 1.45 on the scale of frequency (out of four), while the mean of severity is in the range of 2.77 to 1.5 on the severity scale. The standard deviation of the delay causes frequency is in the range of 0.27 to 1.77, while the standard deviation of delay causes severity is in the range of 0.11 to 1.74. This study uses 95% of the confidence level.

Table ‎4. Frequency and severity of causes of delay.

Importance of the causes of delay

The importance index was calculated for the frequency and severity of delay causes as product. It is interpreted to a standard form in a base of 100 in the Table ‎4 . Importance index of causes of delay. of ranking.

Table ‎4. Importance index of causes of delay.

Ranking of the causes

Table ‎4. Standard ranks of causes of delay.

Most important causes by the respondents

Based on experience, respondents were requested to select the most five important causes of delay. Respondents mentioned different causes, each has selected from his own point of view. Causes of delay are ranked according to the counting number of each cause by respondents. Table ‎4 . Summary of most important causes and their ranks by the respondents. shows the summary of the frequency of most important causes by respondents. The following is a ranking list of the most important causes by respondents:

Compressed project schedule.

Overcommitted (overloaded) Engineers.

Adding extra scope of work to already agreed.

Slow in responding to queries.

Process of approving change orders.

Unavailability of existing drawings and/or information.

Poor following up.

Unexpected/ unforeseen additional requirement.

Constructability problems.

Ambiguity in scope of work.

Insufficient data collection or poor survey.

Incapability of consultant engineering firm.

Access to site permission procedure.

Unavailability / approval of selected materials.

Misunderstanding of project documents.

Unavailability of advance engineering software.

Poor interaction in meetings and/or coordination.

Changing construction methods (project requirement).

Design conflicts with standards.

Table ‎4. Summary of most important causes and their ranks by the respondents.

This study, in addition, used pair-wise comparison matrix to find out the importance ranking of delay factors in the engineering phase of large industrial projects in Saudi Arabia. The questionnaire contained two tables that used for this purpose. The first table compared each delay factor to the other delay factors according to respondents prior experience in the engineering field (see results in Table ‎4 . Delay factors pair wise comparison results of importance ranking.). The second table discussed the responsibility of parties, Owner versus Engineer, for each delay factor as shown in Table ‎4 . Responsible party pair wise comparison results of importance ranking.. The data in the two pair-wise comparison matrix were analyzed using "Expert Choice, version 11", which is a computer software for multi criteria decision making.

Figure ‎4 . Analytical Hierarchy Process (AHP) model. shows the model of the analytical hierarchy process used in this research. It consists of three levels, first level called the goal which is the delay factors importance ranking, the second referred to as children which are the five factors of delay, the third level indicated the alternatives who are the Owner and Engineer as responsible parties of delays.

As shown in Figure ‎4 . Dynamic sensitivity with respect to delay factors importance ranking., the most important factor of delay is the design compatibility with 42.9%. The second important factor is project control with a percentage of 19.7%. The third factor in the importance ranking is resource capability which has 17.8%. The third factor is changes and it got 11.7%. The least important factor of delay is project documents having a weighting of 7.9% only. The result of AHP shows a slight more responsibility to Engineer than the Owner. According to the analyzed data, Owner should take 42.5% of the responsibility of delayed projects, while Engineer should take 57.5% of the responsibility. Figure ‎4 . Responsible party for delay factors. shows in further detail the percentage of responsibility for the two parties under each delay factor.

Table ‎4. Delay factors pair wise comparison results of importance ranking.

Table ‎4. Responsible party pair wise comparison results of importance ranking.

Figure ‎4. Analytical Hierarchy Process (AHP) model.

Figure ‎4. Dynamic sensitivity with respect to delay factors importance ranking.

Figure ‎4. Responsible party for delay factors.

Figure ‎4 . Numerical assessmnt of the relative importance of the delay factors. to Figure ‎4 . Weighted head to head between Owner and Engineer. present different styles of sensitivity analysis for the delay factors and responsible parties. Unfortunately, the results have a high rate of inconsistency (1.4) which means wide variation between the answers of respondents. The high inconsistency could be because the respondents are from different disciplines and different companies. Each discipline has its own circumstances and deals with different problems, so the inconsistency was predictable.

Figure ‎4. Priorities of the delay factors with respect to the importance ranking.

Figure ‎4. Numerical assessmnt of the relative importance of the delay factors.

Figure ‎4. Sensitivity analysis with respect to delay factors importance ranking.

Figure ‎4. Weighted head to head between Owner and Engineer.

SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS

Summary

This report discussed the delay in the engineering phase of large industrial projects in Saudi Arabia. It studied the frequency and extent of the causes of delay. The research also represented the importance of the delay causes based on the results of the frequency and extent of each cause of delay. This study is a questionnaire survey basis research that is directed to the Owner of the largest industrial projects in the Kingdom and the associated Engineers.

In the first part of this report, a background about Saudi Arabian industrial market was introduced. This part highlighted the major industrial projects in Saudi Arabia and the phases of projects lifecycle and stages. The delay problem in the engineering phase of large industrial projects was also stated in this part. After that, the objectives of the research were indicated to lead readers about the goals behind the report.

In the second part, a literature review was conducted using multi references to collect all necessary information. This helps to understand all dimensions of the stated problem. Then, the causes of delay were listed in 30 points after had been revised by expert Engineers and project managers in the industrial field.

In the third part, the organization of the report was structured in sequence of stages to give a clear mission for the report. Also, the process of developing the questionnaire that used in collecting data in this research was described. The questionnaire developed was consisted of three parts: first part for general information about respondents, the second was related to respondents judgment based on the experience regarding the frequency and severity of delay causes and factors, and the third was about the overall extent of the delay in the engineering phase of industrial projects. The scoring method of the questionnaire was discussed in detail in this part.

In the fourth part, the collected data by the questionnaire were presented in tables and figures. The data were analyzed using simple statistical techniques and the quantitative analysis method of Analytical Hierarchy Process (AHP). The results were given to show the frequency, extent, and importance ranking of each cause and factor of delay. The field survey included 22 respondents, half of them represented the Owner while the other half represented the Engineer.

In the fifth part, the major findings and the most important factors of delay are on hand on the following sections. The conclusion of the research are presented as managerial solutions showing how project managers can at least minimize, if not avoid, the delay in the engineering phase of future industrial projects. Finally, some recommendation are given to help in conducting further or similar studies.

Findings and Conclusions

Based on the results obtained, it is observed that the delay frequency in the design phase of industrial projects occur especially for small projects. The delay frequency had almost an inverse relation with the size of the project estimated in man-hours. It is also found that all delayed projects were extension requested, the majority - more than 85% - were partially or completely extension approved.

It terms of the extent of delay, it is found that 50% of respondents believe that it could reach 10-30% of projects original duration. Based on respondents experience, the actual delayed projects showed an average delay extension of 14.94%. The delay extension was more severe in small projects - less than five thousands man-hours - comparing to medium and big projects. It is also observed that the average of the approved time extension was 87.8% which is high percentage.

Regarding the important causes of the delay, there are many causes that reported as important causes by one or more respondents. The most important causes that had more than 40 according to the standard importance index are listed to represent the important causes:

Compressed project schedule was given the highest importance in the ranking among the other causes. Compressed schedule means the Engineer underestimated the project duration, or Engineer overestimated his capability to finish the project on time. On both ways, Engineer must be more realistic in scheduling task during bidding process.

Overcommitted Engineers considered as the second highest important cause of delay. This cause shows the willingness of the company to win more projects than it can handle. To solve this problem the engineering company has to take a necessary corrective action by increasing of its resources. In case this solution is not reasonable at the time, it should reduce the rate of newly received projects.

Adding extra scope of work to already agreed is a very important cause of delay. This action is a type of changing order and this means it is the responsibility of the Owner to absorb any damages due to his poor planning and project scoping. Owner has to study projects very well and carefully before awarding them to not add any extra works to already exist. Owner can use sensitivity analysis (what if) technique and value engineering in this case to predict any possible needs for projects.

Insufficient data collection or poor survey of course affect negatively the efficient project time performance. Since it is the responsibility of Engineer to carry out survey, Engineer has to assign enough time for data collection and survey tasks. Engineer must take his time in survey process and schedule it properly. This action would prevent Engineer from repeating the same work again and again because of insufficient collected data.

Unavailability of existing drawings and information is one of the major causes of delay. Existing drawings, or sometimes as built drawings, and information are essential for Engineers to design any project. Shortage in these important documents for sure leads to sever extent of delay and take time to prepare them in case of unavailability. Therefore, Owner has to make sure that all drawings and information of the existing situation is ready ahead of awarding projects.

Recommendations for Further Studies

The following points are recommended to carry out a similar research in the field of the causes of delay in Engineering phase of large industrial projects:

Other research is candidate to conduct for the other types of industries in Saudi Arabia.

Different study methods can be adopted to evaluate the causes of delay.

The research technique is highly recommended to deal with a single engineering discipline to get less inconsistency rate, and as a result, to be able to suggest more accurate solutions.

Another study can negotiate and discuss the relative cost of delayed industrial projects.

You have been carefully selected, and are personally invited to participate in a research project of the above title. It takes from 15 to 20 minutes to fill out this questionnaire. It is very important and essential for us to learn your opinions. ALL ANSWERS WILL BE KEPT CONFIDENTIAL. Data will be analyzed as whole, and your answers will be used only for the purpose of scientific research. Please read this form carefully, and feel free to contact the researcher prior to beginning the study should you have ANY questions.

Researcher: Eng. Saeed Al-Amoudi

Mob. : 0569899606

Email: 3moudi@live.com

INTRODUCTION:

The questionnaire consists of three parts, Part (A) includes general information relating to your experience, Part (B) includes a list of causes of delay. You are requested to choose a frequency of occurrence, a degree of severity for each of these causes, and an appropriate weight of nine degree scale in a pairwize comparison table, Part (C) includes questions for the overall extent of delay. You are kindly requested to answer the questions as reflected by your experience.

DEFINITIONS:

Term

Definition

Delay

Project

Frequency

Severity

: The time overrun beyond the construction completion date as specified originally in the contract of the project, whether or not the contractor was allowed a time extension.

: Project in this questionnaire refers to preparing project proposal design (FEED).

: The frequency of occurrence of a cause of delay throughout preparing project proposal design.

: The severity of effect on the completion of a project when such a delay occurs.

RESPONCES:

For part (A), the responses are based on a 5-degree scale as follow:

Frequency of occurrence:

Degree of severity:

Always

Often

Sometime

Never

Do not know

: occurs all the times and situations.

: occurs most of the times and situations.

: occurs from time to time.

: does not occur at all.

: no experience with the frequency of occurrence of this cause.

Very severe

Severe

Somewhat

No effect

Do not know

: cause has a great effect on delay.

: cause has an appreciable effect on delay.

: cause has some effect on delay.

: cause has negligible or no effect on delay.

: no experience with the severity of this cause.

PART (A) GENERAL INFORMATION:

You are kindly requested to write or tick (✓) the appropriate answer for the following questions.

Where are the industrial projects in the kingdom that your firm handles?

Eastern province

Central province

Western province

Northern province

How many years have your firm been designing industrial projects?

Less than 10 years

10 to less than 15 years

15 to less than 20 years

over 20 years

What is your job title in your firm?

How many years of experience do you have in the industrial engineering consultancy?

How many industrial projects have you been involved in?

How many of these above mentioned projects were delayed?

PART (B) CAUSES OF DELAY:

The list below include causes of delay. For each of these causes you are kindly requested to express your option by answering the following two questions and choose the appropriate selection:

What is the frequency of occurrence for each cause? Kindly tick (✓) the appropriate cell.

What is the appropriate weight of each delay factor in term of criticality in its direction from center than other factor at reverse side? kindly tick (✓) the appropriate cell.

Rating scale:

Similarly, what is the appropriate weight of each responsible for the five delay causes? kindly tick (✓) the appropriate cell.

PART (C) Delay Extent:

This part includes general questions pertaining to the overall extent of delay in the design of industrial projects. You are kindly requested to answer the following questions:

Based on your experience with delayed projects, what was the average delay time of the delayed projects relative to the original project contract duration?

less than 10%

10 to 30%

30 to 50%

50 to 100%

over 100%

Based on you experience, what are the most important 5 causes out of the 30 causes of delay in the design phase of industrial projects?

-

-

-

-

-

Please fill in the following table with 3 completed projects which were designed by your firm and were subjected to delay. An example is given in the table:

Estimated Man-hours : rounded to the nearest thousand man hours.

Duration : Rounded to the nearest month.

Years of submitting : Please select projects completed during the last five years.

Comments: Please write any comment that would add value to this questionnaire

...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ...................................................................................................................................... ......................................................................................................................................

Name of your firm (Optional): ..............................................................................................

Filled by (Optional): ..............................................................................................

Thank you for your kind participation.

REFRENCES

Abdul-Rahman, H., Takim, R., & Min, W. S. (2009). Financial-Related Causes Contributing to Project Delays. Journal of Retail & Leisure Property 8.3, 225-238.

Abu Zaid, W. (2012, April 12). AMCDE Co., Project Manager. (S. Al-Amoudi, Interviewer) Khobar, Eastern Province, Saudi Arabia.

Andi, A., & Lalitan, V. (2010). Owner and Contractor Perceptions Toward Factors Causing Delays. Civil Engineering Dimension, 8-17.

Assaf, S. A., & Al-Hejji, S. (2006). Causes of Delay in Large Construction Projects. International Journal of Project Management 24, 349-357.

Doyle, J., Nardone, F., & Krisnan, V. (2005). Concurrent Delays in Contracts. Australia: Financial-Related Causes Contributing to Project Delays.

Haseeb, M., Xinhai-Lu, Bibi, A., Maloof-ud-Dyian, & Rabbani, W. (2011). Problems of Projects and Effects of Delays in the Construction Industry of Pakistan. Australian Journal of Business and Management Research 1.5, 41-50.

Hatem, D., & Lenart, P. C. (2010, March). RFIs and Shop Drawings, How to Manage Risk and Reduce Liability. Structure Magazine, pp. 30-31.

Luu, V. T., Kim, S.-Y., Tuan, N. V., & Ogunlana, S. O. (2009). Quantifying Schedule Risk in Construction Projects Using Bayesian Belief Networks. International Journal of Project Management 27, 39-50.

Marzouk, M., El-Dokhmasey, A., & El-Said, M. (2008, July 1). Assessing Construction Engineering-Related Delays. Journal of Professional Issues in Engineering Education, 134(3), 315-326.

Nirmal Kumar Acharya, Y. D. (2006). Critical Construction Conflicting Factors Identification Using. KSCE Journal of Civil Engineering, 165-174.

Ostanik, M. (2007). Construction Submittal and Shop Drawing Liability. Submittal Exchange, 1-7.

Randall Bell, M. (2011). Project Delay Economics. The Appraisal Journal, 292-300.

Sambasivan, M., & Soon, Y. W. (2007). Causes and effects of delays in Malaysian construction industry. International Journal of Project Management 25, 517-526.

SIDF, S. I. (2012). Industrial Development in Saudi Arabia. Riyadh, Saudi Arabia: Saudi Industrial Development Fund.

Tumi, S., Omran, A., & Pakir, A. H. (2009). Causes of Delay in Construction Industry in Libya. The International Conference on Administration and Business (pp. 265-272). Bucharest: ICEA - FAA.

Wertman, J. S. (2008). The Use of Shop Drawings on Construction Projects. Miami: Berger Singerman.

Yang, J.-B., & Wei, P.-R. (2010). Causes of Delay in the Planning and Design Phases. Journal of Architectural Engineering, 80-83.

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