PM World Journal
Looking at the cost of delay

Lack of timely project decision-making can amount to big costs later, says Robert Prieto, senior vice president of Fluor Corp., in a new analysis for the PM World Journal.

While project delays and the resulting cost impacts are generally linked to changed scope, rework or productivity loss, "the cost of a lack of timely decision-making is seldom reflected in project governance processes," says Prieto.

He says that for a contractor, delays are even more "deleterious" when they are of longer duration and at a later stage in the project.

"A $4-billion project, not uncommon in the world of large infrastructure and industrial projects, that is subject to a delay of one day in decision-making would increase an owner's cost by up to $10 million," says Prieto. "Was the day lost in decision-making worth it?"

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