Decision Latency: How Owner Delay Enters Project Cost

There is a point on a project where a delayed decision starts to cost money even though nobody has submitted a claim.

I have seen this happen with drawings, material approvals, access, variations and instructions. The item is still on the register and everybody may still be working on it, but the assumptions behind the price and the programme have started to move.

That is the point I think we need to pay more attention to.

Take a simple example. A contractor submits a technical proposal and the supplier quotation behind that proposal is valid for thirty days. The contractor has also planned the work on the assumption that a particular subcontractor, equipment and workfront will be available within that period.

If approval comes in ten days, there may be no issue.

If it comes in twenty days, there may still be no issue.

But once you get beyond the period the supplier is prepared to hold the price, something has changed. The drawing may still be exactly the same drawing and the approval may still be outstanding, but the contractor can no longer assume that the original price is available.

That is where the cost can start.

What is actually waiting?

When I see “awaiting approval” on a project report, I want to know what is behind it.

Is somebody waiting to order material? Is a subcontractor holding a date? Is equipment supposed to move to that workfront? Is another activity waiting for this one to finish?

Those questions tell you much more than the age of the approval.

You can have one decision that has been outstanding for thirty days and nothing significant has changed. Another can be outstanding for ten days and already be creating a problem because the quotation expires on Day 12 or the subcontractor has another project starting the following week.

So I would not look at age alone.

I would ask: when does this decision start changing the project?

Follow what moves first

Let us stay with the same example.

The supplier has given a thirty-day price. Day 30 passes and the supplier comes back with another price.

The difference may be small. The supplier may even agree to hold the old price for another week, and sometimes these things can be resolved without becoming a major issue.

But the project is now depending on the supplier agreeing to something that was already part of the original plan.

Then maybe the subcontractor moves.

That contractor has people and equipment to keep busy as well. If another client is ready and this project is still waiting for approval, there is a point where he will take the other work.

Then the main contractor has to decide what to do.

Do we wait? Do we change the sequence? Do we move our equipment to another area? Do we bring another activity forward so that the people on site remain productive?

All of those can be sensible decisions.

They also mean that when the approval eventually comes, you may no longer have exactly the same price, resources and sequence you had when you submitted the request.

The project has moved.

This is why the claim comes late

By the time a formal claim appears, management may be seeing the last part of the story.

The supplier has already repriced. The subcontractor may already have moved. Work may have been resequenced and equipment may have gone somewhere else.

When the original workfront eventually opens, those resources have to be brought back.

That is when people begin to see additional cost clearly.

You can now calculate the new supplier price. You can calculate additional equipment time. You can identify remobilisation or additional preliminaries. You can begin to establish the effect on completion.

The claim gives those things a number.

The problem started before the number existed.

This is one reason early-warning mechanisms are useful on projects. If something is likely to affect time or cost, the project should see it while there are still options available to both parties.

For me, that is the useful part.

The objective should be to manage the issue before everybody is sitting in a meeting arguing about who owns a cost that has already happened.

I would add one date to the register

Most decision registers already tell us when an item was submitted.

For the important ones, I would add another date: by when do we need this decision if we want to keep the price, resource or sequence we currently have?

You can call it a decision-protection date if a label is useful. The name matters less than the discipline behind it.

If somebody tells me that a drawing has been outstanding for eighteen days, I still do not know enough.

If they tell me it has been outstanding for eighteen days, the material price expires in four days and the subcontractor is due to move the following week, I now know what I need to look at.

Maybe we still decide to wait.

There may be a good reason. The technical information may be incomplete or the consequence may be large enough to require another level of review.

But now we know what waiting means.

That is the decision management should be making.

Then ask who can actually decide

A lot of delay on projects is also about authority.

The technical team may have finished its review. The commercial team may understand the cost. The project manager may know what has to happen next, but the person who can approve the consequence may sit somewhere else in the organisation.

That is where turnaround becomes important.

If the issue changes cost, who can approve it?

If it changes programme, who has to be involved?

If another agency or utility has to respond, who is responsible for following that interface until there is an answer?

And if the person holding the decision cannot close it, where does it go next?

I would want those things to be clear before the project is under pressure.

When a report says something is “with management”, that is usually not enough for me.

Which person?

What decision are they being asked to make?

By what date does the project need it?

Those three questions make the issue much easier to manage.

The contractor and the client are often using different clocks

I think this is one of the reasons these situations become difficult.

The client may be looking at the review process. The contractor is looking at the work.

The client wants to be sure that the technical answer is correct, the commercial implication is understood and the right authority has approved it. All of that is reasonable.

At the same time, the contractor is looking at suppliers, labour, equipment, subcontractors and cash.

Those things do not stop moving because the approval process is still running.

So the project needs a way of putting both clocks in the same conversation.

This is not about approving everything quickly.

I would be uncomfortable with that approach because some decisions need proper review, and rushing the wrong decision can create a bigger problem.

It is about knowing the cost of the time being taken.

If another week of review protects the project from a much larger technical or commercial risk, take the week.

If the review is complete and the decision is simply sitting somewhere without a clear owner, that is a different problem.

The report should allow management to see the difference.

What I would want to see

For a material project decision, five things are enough to change the conversation.

With those five things, an old issue is no longer automatically the most urgent issue.

Management can see that a thirty-day approval has no immediate effect while a seven-day approval is about to change a supplier price.

That is a better way to prioritise.

It also creates accountability without assuming that every delay is the client's fault. If the contractor has not provided complete information, that becomes clear. If another party owns the interface, that becomes clear as well.

The project can then focus on what actually needs to move.

Go back before the claim

When a significant delay claim comes across the table, the contractual analysis has to be done properly.

1. What does the contract say? Was notice given? What caused the delay? Which party carried the risk? What time and cost can actually be demonstrated?

2. Those questions determine entitlement.

3. I would still ask another set of questions once that work is done.

4. When did we first know this decision was becoming a problem?

5. What was the first thing that moved?

6. Who had the decision at that point?

7. Could the project still have protected the original price or sequence?

8. And what do we need to change so that we see it earlier next time?

That is where the operating lesson sits.

On construction projects, cost does not always arrive looking like cost.

Sometimes it first looks like a drawing waiting for approval, a quotation that still has a few days left, a subcontractor asking for a start date, or equipment waiting for access.

If we wait until all of those things appear inside a claim before we call them a cost problem, we are reading the project too late.