We estimate that 85% of our projects are delayed by the client.  This means our clients do not meet the original contractual dates.  The most common reasons for delays are:

• Client has not made a final decision on a design submitted for review (the larger the committee the more likely this will happen)

• Client has not provided the resources needed for the design, e.g. photos, copy, research

• The building construction is behind schedule

I think it is common knowledge that delays cost money.  If you think of every additional hour spent on a project as additional dollars this makes logical sense.  Here are some examples of delay costs:

• Creating a new project schedule

• Drafting a change order to make the new schedule official

• Additional communication with the TSI team

• Additional communication with the client, more phone calls, more written communication

• Department Heads have to reschedule all team members’ time

• The company master schedule has to change

• TSI’s available hours reports have to change

• Someone has to be moved to another project while we are waiting on the client

• Last minute flight has to be booked which is more expensive

• If the end date does not change, overtime charges will have to be added to the project

• If billing is now delayed, this affects the cash flow of the company, which may cause interest charges

• Accounting has to change reports to accommodate these delays

• Exhibits are taking up valuable space in the shop

Our clients also have many of these same costs when the project is delayed.  Delays cause a long chain reaction.  At TSI we run 10 to 20 projects at a time.  Any one project delay often impacts another project.  Imagine having 85% of your projects delayed and managing your forecasted labor needs.  It is a juggling act.

Of course, most of our clients are not happy when we charge for delays.  We want to be flexible and accommodating.  We do everything we can to avoid charging for delays.  However, at times it is inevitable we will have to charge.  We have signed contracts that we are fined for every day we are late.  We often wish this was a clause that went both ways.

In the future, I will write about what we are doing to reduce the amount of client delays.   How do delays cost you money?

Posted by: Betty