Construction projects consist of a lot of operations, from planning to execution. The project owners have to deal with these processes to ensure the project’s timely completion within the decided cost. Many owners often delegate their work to contractors who work on the construction and ensure the projects get completed on time.
Despite the planning, many construction projects get derailed and terminated due to problems like bankruptcy and loan defaults. A performance bond forms a legal obligation for contractors to complete the project and the owner to pay the contractor as per the contract. Sadly, not everything goes as planned, and the culprit often lies in the details. Here are three terrible mistakes you must avoid to ensure the construction project gets completed on time and within budget as decided.
Not having a construction plan in place
Failing to plan is planning to fail, which certainly applies to construction projects. Not having a construction plan in place is one of the mistakes many construction owners make. Without proper planning, any project is destined to fail miserably. But having a detailed construction plan in place can help owners and other stakeholders of the project to stay in the loop, have a better understanding of their roles and responsibilities and assign a roadmap for the project.
A construction plan involves detailed descriptions of the project timelines, required resources, budgets, potential risks and mitigation plan and individual roles. The plan helps ensure everything is performed according to the rules and timelines so the project won’t get delayed or terminated. Implementing underground cable locators prior to starting construction is also important to ensure the plan is viable.
Not having a construction performance bond
Construction projects involve massive financial investments, which increases the risk for stakeholders, especially the owners. Even the slightest mistakes can severely impact the project timelines and budget. That’s why it is essential to have a legally binding agreement that would bind the owners and contractors into a contract. This contract is called a performance bond or contract bond, which dictates the terms and conditions the contractor and the owner must follow.
Failure to comply with the contract can allow the contractor and project owner to act further. If the owner fails to make the payment even if the contractor has completed the project according to the contract term, the contractor can raise an issue with the surety firm to get their payments. If the contractors fail to fulfill the contract, the owners can claim the bond to reduce financial risk and receive financial compensation. This is why it is important for both parties to invest in a good performance or construction bond to ensure the security of the project and their investment. One can avail of the services of a reputable surety company to safeguard their investment in a construction project.
Failure to assess the risks
Risks are a part of any project. The risks might arise in the beginning, mid-way or during the end phase of operations. That’s why it is essential to have a risk assessment and mitigation plan in place. The risk assessment helps discover potential risks at every project phase that can escalate and derail the project. The assessment helps to evaluate the potential risks and their possible impacts. The mitigation plan consists of strategies to deal with the risks and minimize their impact. Possible risks for a construction project can be weather conditions, lower labour or raw materials supply, lack of communication, legal disputes, increased costs, mismanaged project timeline and many more. A risk assessment and mitigation plan help effectively deal with these risks and keep the project on track.
Construction projects are vulnerable to many risks, but with effective planning, delegation, communication and leadership, the project can be finished on time and within budget.