Case study highlighting procurement and logistics issues causing project delays

1. Causes of delay and cost overruns in construction of groundwater
projects in a developing countries;
Ghana as a case study
Yaw Frimponga,
*, Jacob Oluwoyeb
, Lynn Crawfordc
a
1/9-11 Oxford Street, Merrylands, NSW 2160, Australia
b
University of Technology Sydney, PO Box 123, Broadway NSW, 2007 Sydney, Australia
c
Project Management Program, University of Technology Sydney, PO Box 123, Broadway NSW, 2007 Sydney, Australia
Received 28 June 2001; received in revised form 19 September 2001; accepted 27 September 2002
Abstract
Delay and cost overruns are common in construction projects and groundwater construction projects in Ghana are not an
exception. The paper presents the results of a questionnaire survey conducted to identify and evaluate the relative importance of the
significant factors contributing to delay and cost overruns in Ghana groundwater construction projects. Respondents of this survey
included personnel from owners, consultants and contractors involved in groundwater projects in Ghana. The results of the study
revealed the main causes of delay and cost overruns in construction of groundwater projects included: monthly payment difficulties
from agencies; poor contractor management; material procurement; poor technical performances; and escalation of material prices.
Hence, effective project planning, controlling and monitoring should be established to enhance project performance in order to
minimise or avoid delay and cost problems in groundwater construction projects.
# 2003 Elsevier Science Ltd and IPMA. All rights reserved.
Keywords: Project management; Groundwater projects; Construction; Overruns; Ghana; Developing countries
1. Introduction
Project success can be defined as meeting goals and
objectives as prescribed in the project plan. A successful
project means that the project has accomplished its
technical performance, maintained its schedule, and
remained within budgetary costs.
Project management tools and techniques play an
important role in the effective management of a project.
Therefore, a good project management lies in the man-
agement tools and techniques used to manage the pro-
ject. Project management involves managing the
resources—workers, machines, money, materials and
methods used [1]. Some projects are effectively and effi-
ciently managed while others are mismanaged, incurring
much delay and cost overruns.
A construction project such as groundwater com-
prises two distinct phases: the preconstruction phase,
(the period between the initial conception of the project
and signing of the contract; and the construction phase
which is the period after award of the contract when the
actual construction is going on) [1]. Delay and cost
overruns occur in both phases however, major causes of
project overruns usually take place in the construction
phase. Therefore, this paper is limited to this phase.
Previous studies show extensive information on project
schedule delays and cost overruns [2–7].
This paper identifies and examines the causes of delay
and cost overruns in the construction of groundwater
projects. The study is based on data relating to ground-
water construction projects in Ghana. There are many
factors that can cause delay and cost overruns in
groundwater drilling projects. These range from factors
inherent in the technology and its management, to those
resulting from the physical, social and financial envir-
onment. In a preliminary survey conducted in water
drilling projects in Ghana, for the purpose of this
research, it was found that 33 out of a total of 47 pro-
jects completed between 1970 and 1999 were delayed
0263-7863/03/$30.00 # 2003 Elsevier Science Ltd and IPMA. All rights reserved.
doi:10.1016/S0263-7863(02)00055-8
International Journal of Project Management 21 (2003) 321–326
www.elsevier.com/locate/ijproman
* Corresponding author.
E-mail address: yawfrimpong@hotmail.com (Y. Frimpong).

2. while 38 projects were overruns [8]. The data indicated
that 75% of the projects exceeded the original project
schedule and cost whereas only 25% were completed
within the budget and on time. The survey revealed that
delay and cost overruns occur frequently in construc-
tion of groundwater projects in Ghana and developing
countries in general, especially in long-duration pro-
jects. It is therefore important that thorough analysis be
carried out to help in efficient project management, to
reduce delay, and cost overruns.
2. Nature of groundwater work
Groundwater-drilling projects involve the following
activities:
Groundwater exploration (siting of boreholes)
which involves geophysical surveys conducted at
the ground surface using highly sophisticated
equipment, borehole sampling, and geophysical
logging of the borehole with highly sophisticated
well-logging equipment.
Borehole drilling and construction; which
involves drilling, installing the casing, placing a
well screen and filter pack, if required, grouting
to provide sanitary protection, and developing
the well to ensure sand-free operation at max-
imum yield.
Pumping test and water quality analysis: which
involves pumping a well at a certain rate,
recording the drawdown in the pumping well,
monitoring and recording the recovery of the
water, and conducting water quality tests.
Civil works and exploration: which involves
construction of well base pads and installation of
appropriate pump.
The nature of work in groundwater projects and the
environment within which they are built make such
projects susceptible to delay and cost overruns. Some of
the influential factors can be summarised as followings:
Poor technical performance due to improper
planning result number of wells abandoned and
thereby causes project delay and cost overruns.
Work in these projects depends mainly on
equipment, plants and materials, project may be
delayed without effective and efficient procure-
ment procedures.
Numerous series of activities are involved in the
water drilling project and reluctant to use of
scheduling techniques and update schedules on
regular basis are needed. A great deal of co-
ordination among these activities is required to
avoid delay especially in public projects.
Due to lack of skilful management less attention
is paid to resources allocation i.e. human, finan-
cial and material resources.
In an attempt to identify the reasons for such delays
and overruns, an extensive survey was conducted in
Ghana.
3. Research aim and objectives
This paper identifies and examines the causes of delay
and cost overruns in the construction of groundwater
projects in Ghana. The objectives are:
To study and evaluate the factors that contribute
to delay and cost overruns in groundwater con-
struction,
To identify the main factors that influence the
causes of delay and cost overruns in construction
of groundwater projects and to examine their
relative importance.
4. Methodology
In order to evaluate and analyse the causes of delay
and cost overrun in groundwater projects, a wide range
of personnel involved in groundwater construction in
project Ghana were targeted. Personnel were randomly
selected from Ghanaian project managers, consultants,
contractors, client’s representatives and construction
managers. A questionnaire of 26 factors was carefully
designed from previous preliminary investigations con-
ducted in groundwater drilling projects between 1970
and 1999 in Ghana. It was organised in the form of a
priority scaling (1=very low, 2=low, 3=medium,
4=high, and 5=very high).
The questionnaire was directed towards three groups
in both public and private organisations: owners of the
groundwater projects, consulting offices, and con-
tractors working in the groundwater works. The ques-
tionnaire was distributed to a random sample of 55
owners, 40 contractors and 30 consultants. The sample
selected for each of the three groups is described below
as:
Owners comprising the government agency (key
decision-makers) responsible for the projects,
private organisations (industries), and individual
owners.
Consultants working in the groundwater con-
struction projects.
Contractors who are involved in the ground-
water drilling project.
322 Y. Frimpong et al. / International Journal of Project Management 21 (2003) 321–326

3. Respondents were from public and private agencies
that sponsor groundwater construction projects, and the
contracting and consulting organisations that work for
them. There were 125 in the group targeted, 72 (57%)
questionnaires were returned completed of these: 28
were from owners; 19 from consultants; and 25 from
contractors (see Table 1).
5. Data analysis
The procedure used in analysing the results was aimed
at establishing the relative importance of the various
factors responsible for project delay and cost overruns.
The score for each factor is calculated by summing up
scores assigned to it by respondents. Therefore, the level
of importance as indicated by the owners, contractors
and consultants were used to measure the relative
weight of each factor. The relative weight was computed
using the following equation:
Relative Importance Weight (RIW)=
P5
i¼1
ai Áni
PN
j¼1
xj
 100 ð1Þ
where: xj=the sum of the jth factor; j=the factors 1, 2,
3, 4, . . .. . .N; N=total number of factors (26); ai=con-
stant expressing the weight given to the ith response:
i=1, 2, 3, 4, 5
for a response of ‘very high’ a1=5
for a response of ‘high’ a2=4
for a response of ‘medium’ a3=3
for a response of ‘low’ a4=2
for a response of ‘very low’ a5=1
ni=the variable expressing the frequency of the ith
response
n1=frequency of ‘very high’ responsen2=frequency of
‘high’ response
n3=frequency of ‘medium’ response
n4=frequency of ‘low’ response
n5=frequency of ‘very low’ response
Eq. (1) was used to calculate the Relative Importance
Weight for all delay and cost overruns factors. The
Weights were ranked for Contractors, Owners and
Consultants.
To determine whether there is degree of agreement
among the three groups with respect to their rankings
of the factors, Kendall’s Coefficient of Concordance
was used. The Kendall’s Coefficient of Concordance
says that the degree of agreement on a zero to one scale
is:
W ¼
12U À 3m2
n n À 1ð Þ2
m2n n À 1ð Þ
ð2Þ
where:
U ¼
Xn
j¼1
SRð Þ2
n=number of factors; m=number of the groups; j=the
factors 1, 2, 3, 4, . . .. . .N.
The calculated Kendall’s Coefficient of concordance
W =0.9208
In order to know whether there is disagreement or
agreement between the three groups on ranking the
factors, a test of hypothesis is needed.
Null hypothesis: H0: Disagreement in rankings
among the three groups.
Alternative hypothesis: H1: Agreement in rankings
among the three groups.
Since n=26 is too large for the table of critical values
of Kendall’s, chi-square approximation of the sampling
distribution of W is computed with Eq. (3).
2
¼ k n À 1ð ÞW ð3Þ
Therefore, w2
=69.06 and using a w2
critical table for
n=26 and a=0.05, the wa
2(nÀ1)
=2 25ð Þ
:05 =7.65. Since
computed value w2
is greater than critical table 2 25ð Þ
:05
null hypothesis H0 is rejected and alternative hypothesis
H1 is accepted. Therefore, concluded that there is a sig-
nificant degree of agreement between the three groups
with respect to how they rank the factors.
6. Survey results and analysis
The questionnaire was analysed from contractors,
owners and consultants’ perspective. In order to identify
the most important factors that influence time and cost
Table 1
Per cent of questionnaire distribution and their response
Description Questionnaire
distributed
Number of
respondents
Percentage of
responses
Owners 55 28 38.9
Contractors 40 25 34.7
Consultants 30 19 26.4
Total 125 72 57.6
Y. Frimpong et al. / International Journal of Project Management 21 (2003) 321–326 323

4. overruns in groundwater projects, the items were ranked
in the various groups. On the basis of ranking of the
factors by the various groups it was possible to identify
the most important factors that influenced project time
and cost overruns. A summary of all the factors causing
delays and cost overruns in groundwater projects in
relative importance weights, ranking by the groups, and
overall ranking as identified by all groups is shown in
the Table 2.
The results show that, there are several important
factors underlying causes of delay and cost overruns in
groundwater construction projects in developing coun-
tries such as Ghana. The five most important factors
agreed by the owners, contractors and consultants, as
the main causes were (see Table 2) monthly payment
difficulties from agencies, poor contractor management,
material procurement, poor technical performances,
and escalation of material prices.
Contractors and consultants ranked the monthly
payment difficulties from agencies for completed works
first whereas the owners ranked it tenth. This problem
may be due to the existing culture in the construction
industry. In Ghana, the biggest customer of the
groundwater industry is the government and there is
very little participation from private investors [8]. Like
most developing countries, groundwater projects in
Ghana are financed either through domestic savings or
foreign funding. Groundwater construction projects
funds may be from capital allocation from Ministry of
Work and/or foreign assistance which have been bud-
geted. However, there is delay in payment for the com-
pleted work due to bureaucracy in governments
departments. Regular monthly payment to contractors
for work done removed constraints which otherwise may
have impeded project progress to cause delay and cost
overruns. Failure to provide adequate funding resources
to contractors for the job done will make it difficult for the
contractors to meet project objectives [14].
The second most important factor attributing to the
cause of delay and cost overruns in groundwater projects
is poor contract management. Poor contract management
was ranked first by owners, second by consultants, while
contractors ranked it sixth (see Table 2). This can be
attributed to the way contracts are been awarded. Most
cases, projects are awarded to the lowest bidder. Some
of the lowest bidders may lack management skills and
less attention is paid to contractor’s plan, cost control,
overall site management, and resource allocation, ie,
human, financial and material resources. Evidence from
Ogunlana and Olomolaiye [9] and Wahab [11] postu-
lated that many contractors in developing countries are
entrepreneurs who are in the business of making money
Table 2
Rank of all the factors responsible for project delays and cost overruns according to contractors, consultants and owners
Factors Owners Contractors Consultants Overall
RIW% RANK RIW% RANK RIW% RANK RANK
Planning and scheduling deficiencies 4.52 3 4.17 10.5 4.60 4 8
Deficiencies in cost estimates prepared 4.29 8.5 4.13 12.5 4.14 10 10
Inadequate control procedures 3.75 18 3.78 16.5 3.62 19.5 19
Delays in work approval 3.67 20 3.87 15 3.62 19.5 18
Waiting for information 2.97 24.5 3.22 23 3.45 22.5 24
Mistakes during construction 3.48 21.5 2.96 24 3.50 21 22
Delays in inspection and testing of work 2.97 24.5 2.87 25 3.22 24 25
Cash flow during construction 4.44 6 4.48 6 4.48 5.5 7
Frequent breakdowns of construction plant and equipment 4.02 14 3.65 19.5 3.85 16 16
Shortages of technical personnel 3.48 21.5 3.65 19.5 3.79 17 20
Labour shortages 3.09 23 3.57 21 3.45 22.5 21
Monthly payment difficulties 4.44 5 4.96 1 4.88 1 1
Poor contract management 4.91 1 4.30 7 4.77 2 2
Shortage of materials, Plant/equipment parts 4.09 13 3.78 16.5 4.08 11 15
Contractor’s financial difficulties 4.13 12 4.70 3.5 4.65 3 5
Low bid 3.94 16 4.13 12.5 3.96 14 14
Material procurement 4.71 2 4.78 2 4.31 9 3
Imported materials 3.82 17 3.74 18 3.91 15 17
Late delivery of materials and equipment 4.21 11 4.09 14 4.02 12.5 11
Escalation of material prices 4.48 4 4.57 5 4.37 7.5 6
Slow decision-making 2.96 26 2.81 26 2.78 26 26
Inflation 4.36 7 4.70 3.5 4.48 5.5 4
Difficulties in obtaining construction materials at official current prices 3.98 15 4.17 10.5 4.02 12.5 13
Ground problems 3.71 19 3.26 22 2.81 25 23
Bad weather 4.29 8.5 4.22 9 4.37 7.5 9
Unexpected geological conditions 4.25 10 4.26 8 3.68 18 12
324 Y. Frimpong et al. / International Journal of Project Management 21 (2003) 321–326

5. at the expense of good management. They pay low wages,
submit very low bids and have very little, if any, ability to
plan and coordinate contracts.
The third significant factor identified was material
procurement (see Table 2). It demonstrates a complete
absence of effective material procurement management
on the part of the contractors. The established bureau-
cratic structures in material procurement processes in
developing countries like Ghana seem to hinder the easy
flow of construction materials. In Ghana, the processing
of an order can take from a week to several months
especially in public sector.
Project procurement involves the development of
contract strategy, the management of contracting activ-
ities from initiation such as project and contract defini-
tion, market study through tendering process, contract
documentation to contract performance, management
and administration after contract award. The project
team of client, consultants and contractors should join
to establish proper material procurement strategy and
methods in order to remove all the obstacles in the
material procurement.
The fourth item in Table 2 which was given by
respondents as a cause of delay and cost overruns in
groundwater construction projects is poor technical
performances. Well completion problems are emerging
from problems faced during actual drilling activities
and from technical failures, which are accounted
for improper planning and management experience
limitation.
The escalation of material prices was ranked fifth,
resulting principally from the high and unstable infla-
tionary trend in Ghana and developing countries in
general. The average rate of inflation in Ghana was
12.7% between 1970 and 1979; 48.6% between 1980
and 1989; 30.8% between 1990 and 1999 [11]. The trend
of inflation is probably due to demand exceeding sup-
ply, which creates scarcity of goods and hence the prices
of materials increase. These unpredictable inflationary
trends are readily observed in many developing coun-
tries and may have aided inaccurate projection of con-
struction costs in such areas [7].
Other factors that emerged clearly as not very impor-
tant, but of interest, are bad weather and geological
conditions. These are the natural factors. Bad weather is
ranked eight by owners and consultants and 10 by con-
tractors while all the three groups ranked it 10. The
respondents ranked the geological condition factor low.
The bad weather and geological condition are the most
difficult and unknown factors because they cannot be
controlled. In Ghana, the effect of these natural factors
may not be very significant, but it is worthy of con-
sideration. Ghana is located in a tropical zone with only
two climates: wet and dry. Rain would definitely stop
groundwater construction activities because of the
works nature. In the dry season, the average tempera-
ture varies between 30 and 38
C while the humidity
ranges from 25 to 80%. Temperature and humidity
affect the productivity of workers. If the temperature
and humidity are high, workers feel dullness of senses
and poor coordination [12] and generate body heat
and subsequent discomfort [13]. Therefore, pro-
ductivity in hot climates is certainly low. In the dril-
ling world, the most apparent representative problem
is the nature of the work itself. It is a work that can
not see what is happening deep in the subsurface.
The number of abandoned well due to the unfavour-
able geological conditions causes project delay and
cost overruns.
7. Summary and conclusion
The main survey of contractors, owners and con-
sultants as discussed in this paper relates to the con-
struction of groundwater projects in Ghana. The survey
focused on identifying and ranking in order of impor-
tance, the main factors causing project delay and cost
overruns.
The main conclusions of the survey are as follows:
According to the contractors and consultants,
monthly payments difficulties from agencies
was the most important delay and cost factor,
while owners ranked poor contractor manage-
ment as the most important factor. Despite
some difference in viewpoint held by the three
groups surveyed, there is a high degree of
agreement among them with respect to their
ranking of the factors. The overall ranking
results indicates that the three groups felt that
the major factors that can cause excessive
groundwater project overruns in developing
countries are poor contractor management,
monthly payment difficulties from agencies,
material procurement, poor technical perfor-
mances, escalation of material prices according
to their degree of influence.
Other factors that emerged clearly as not very
important, but of interest, are bad weather and
unexpected natural events. These are the natural
factors. Bad weather is ranked eight by owners
and consultants and 10 by contractors while all
the groups on average ranked it 10. The respon-
dents ranked geological conditions low. The bad
weather and unfavourable geological conditions
are most difficult and unknown factors because
they cannot be controlled.
The result shows that many of the problems in
the groundwater construction projects are origi-
nated from poor resources management (human,
technical and material). In practice, this phe-
Y. Frimpong et al. / International Journal of Project Management 21 (2003) 321–326 325

6. nomenon is expected to continue unless actions
are taken to control these causes right away from
the planning to the implementation and man-
agement stages. Therefore, good practice in
planning, coordinating, controlling and mon-
itoring procedures needs to be recognised.
8. Recommendations
Based on this study, and with developing countries in
mind, some recommendations are given as follows:
Appropriate funding levels should always be
determined at the planning stage of the project so
that regular payment should be paid to con-
tractors for work done.
In order to improve contractors’ managerial
skills there is need for continuous work-training
programs for personnel in the industry to update
their knowledge and be familiar with project
management techniques and processes. have
effective and efficient performances.
Effective and efficient material procurement sys-
tems should be established within projects.
Material procurement has the potential to cause
major delays to construction projects. Therefore,
material procurement process should be executed
properly by improving procurement process in
order to avoid supply delays.
Developing effective and efficient technical per-
formances in the groundwater industry through
different types of training programs. The train-
ing should cover project planning, scheduling,
time and cost control, and the information
systems.
There should be adequate contingency allowance
in order to cover increase in material cost due to
inflation.
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