What a week of waiting costs: estimating construction decision delay

Part 2 of 6 in The Cost of Slow News

A week waiting for approval can cost money even while the site team keeps work moving. For project directors and commercial leads, this guide shows how to estimate that cost: compare what happened with what could realistically have happened if the decision had arrived sooner, then price the difference using your own records.

In the first article, we looked at how to measure the time between a site problem and an authorised decision. Once you have identified a wait, the next question is what an earlier decision could have saved. Answering it means looking at what the site team kept moving, what remained blocked and whether the completion date changed.

A megaproject involves many workfronts, management teams and decisions moving through different levels of approval. While site managers resolve some problems locally, others need authority to change methods, increase resources or rephase work across packages. When these decisions repeatedly wait for approval, the costs can build into a substantial burden across the programme. Some delays also hold up other teams, spreading the impact beyond the original workfront. The fictional piling example below follows one such decision to show how an avoidable wait arises and how to calculate its cost.

The example: a piling crew encounters an obstruction. The site manager moves the crew to another workfront while a revised piling method is prepared. That keeps people productive. Approving the revised method and its additional budget sits with the project director, and the original workfront remains blocked.

The technical checks are complete and the proposal is ready, but approval waits another week for the project review. We'll compare that sequence with approval a week earlier, allowing for the work the site manager kept moving in the meantime.

1. Establish what an earlier decision could have changed

Name the decision and who could approve it. Moving a crew within an agreed plan may be within the site manager's authority. Changing the construction method, adding significant resources or rephasing other packages may need approval elsewhere. Set out the boundary that applied on your project.

Then establish the earliest date on which that person could reasonably have decided. Allow for the investigation, design checks and information they needed. The date the obstruction was discovered may be much earlier than the date a workable response was ready.

In our example, the revised method could have been approved a week sooner. The specialist plant and access would have been available, so the work could also have restarted a week sooner. Those are assumptions to check against bookings and site records on a real job. An earlier signature has little value if the necessary plant cannot arrive any earlier.

A week of approval delay is not automatically a week of project delay. Ask the planner to compare the two sequences, including the work the crew did elsewhere. Establish how much of the wait could be absorbed and how much would reach completion. The US Government Accountability Office's Schedule Assessment Guide explains why a credible cost estimate must account for schedule slippage and why a reliable schedule is needed to understand its cost effects.

2. Price the resources that actually waited

The crew in our example completed useful work that was already in the plan. Their wages for that work would have been paid in either sequence, so they add nothing to this estimate. Any extra moves or loss of productivity would need their own evidence.

A specialist rig, however, stayed on hire at the blocked workfront. Assume the additional hire was £2,000 for each of seven calendar days, with no saving available from returning it for that short interval. That gives £14,000 of additional cost. The rig is charged for the whole week it stood idle, whatever later happens to the completion date. All rates and amounts in this piling example are illustrative.

Use the additional cost caused by waiting. Check hire terms, timesheets and invoices. Record whether each rate applies per working day, calendar day or week. A resource moved onto useful work, a hire charge that could be stopped and a charge that continued regardless need different treatment.

3. Add the cost of any later completion

Suppose the planner's comparison shows that the later restart moved completion by five calendar days. The alternative work helped, but could absorb only part of the week. The site therefore remained open longer.

Assume the additional site management, cabins, security and services cost £6,000 per calendar day during that extension. The extra site overhead cost is £30,000. The rig hire is excluded from that daily rate and from these extension costs, so it appears only once.

A commercial lead's cost breakdown matters here. Separate costs that continued for longer from one-off establishment costs and work that would have been done anyway. Multiplying the whole project's weekly expenditure by the wait would price useful construction as a loss.

In this scenario, the one-week wait adds £44,000 of contractor cost. That total depends on the completion assumption. If completion stayed unchanged, this example would retain only the £14,000 of extra hire. That distinction is worth resolving before presenting a single figure to the board.

An owner may also face additional financing or operating costs when an opening moves. Ask the finance team for the difference between the two opening dates, using the actual funding and operating assumptions. Keep that owner estimate separate from the contractor's costs, and reconcile overlaps before presenting a combined total.

4. Check whether waiting changed the available response

Suppose the specialist plant in the piling example was available only until Friday. Approval on Monday might now mean waiting for its next slot, paying to bring in a replacement or changing the method again.

Treat that as an alternative scenario. Confirm the booking deadline, the next available slot and the cost of a workable alternative. Recalculate the resulting completion date and site costs. Adding a large missed-booking allowance to the original total could count the same extended site period twice.

Compare complete responses. If an extra shift could recover the finish date, compare its additional cost and achievable output with accepting the later finish. Include the overheads it would avoid. Keep an unconfirmed plant slot or recovery rate visible as an uncertainty, with a range of outcomes where useful.

Keep potential contractual recovery alongside the cost estimate as a separate commercial question. Record what evidence and notices need review. The worksheet measures the additional cost of the wait; entitlement and any recovery are settled under the contract, using that evidence.

How the same calculation scales on a larger operation

The piling example shows how to arrive at £44,000 for one contained decision. The amount depends on the resources affected and how long they are needed. A decision that holds up a major tunnelling operation can carry a much larger cost.

For a separate comparison, HS2's published guide to tunnelling costs gives a time-related support cost of £1.1 million per week, at 2011 prices. That covers management, supervision, general site labour, hired support plant and site services for the operation described in the guide.

If an avoidable decision delay extended that operation by four weeks, and the full weekly support cost continued, the additional cost would be £4.4 million at the same price base. This is an illustrative extension using a published estimating rate. The guide does not report such a loss from a delayed decision.

The calculation depends on the operation actually lasting longer and those costs continuing. A wait for approval might be absorbed by other work, just as in the piling example. Establish that effect before multiplying a weekly rate by the wait.

5. Put a cost and a decision date beside the pending approval

For the next decision awaiting approval, bring the planner, site manager and commercial lead together around these questions:

• What response needs approval, and who has the authority?
• When will the evidence be sufficient to decide and the site ready to act?
• What can the site team keep moving in the meantime?
• Which additional resource costs and completion costs would an earlier decision avoid?
• When does a booking or working window change the available options?

Write down the comparison, the rates and the assumptions still awaiting confirmation. Put the latest useful decision date beside it. If the approval is buried in a status pack, our guide to building a project report around the decisions it needs shows how to bring that request to the front.

The piling estimate prices one fictional event. To understand the programme's exposure, look for the same pattern across its workfronts: what is awaiting approval, what can continue, and what additional cost is building up? Some waits will be absorbed; others will affect several packages or a key milestone. This wider view helps senior managers identify which decisions need their attention before the consequences spread.

The site manager may already have kept most of the crew productive. Show that in the estimate. Then show the cost that remains beyond their authority, and the date by which a senior decision can still avoid it. That gives the approver a concrete consequence to weigh while there is time to act.

Next, part 3 looks at Crossrail: how warnings about the opening date travelled, and when leadership knew.