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Contractor poor performance identified in client project survey

Construction clients have identified contractors as the biggest cause of project underperformance.

According to a global survey of projects by KPMG, more than two-thirds of project owners (69%) said poor performance from their contractors was the single biggest factor in underperforming projects.

Less than a third (32%) of owners worldwide said they had a high level of trust in their contractors.

While only 9% of respondents said they had a low level of trust in their contractors, 60% stated that they only had moderate trust.

The figures, released as part of KPMG’s 2015 Global Construction Project Owner’s Survey, show more than half (53%) of project owners globally have had one or more underperforming projects over the past year.

Energy and the public sector were two of the hardest-hit areas, with 73% and 90% of clients respectively experiencing underperformance.

Conducted in late 2014, the survey questioned 109 senior leaders from organisations carrying out significant capital construction projects worldwide.

Respondents were spread across the Americas (38%); Europe, Middle East and Africa (26%); and Asia-Pacific (36%).

Only 31% of respondents’ projects came within 10% of their original budget over the past three years, while just 25% of projects came within 10% of their original deadlines over the same period.

More than half of respondents were concerned about the lack of available in-house skills, with many choosing to hire external specialists to help deliver projects.

In total, 69% said they required external assistance to support their existing workforce to enable project delivery, equating to 5% of their total workforce per project.

Additionally, 44% of respondents struggled to attract qualified labourers, while a further 45% lacked planners and project managers.

More positively, 82% of clients felt that owner/contractor collaboration would increase over the next five years, with only 3% believing that collaboration would fall.

A further 13% felt there would be no change in collaboration.

KPMG UK head of infrastructure, building and construction Richard Threlfall said: “This survey highlights the prevailing issues affecting the sector both in the UK and globally.

“We will only see a turnaround of poor-performing contracts once we start seeing contractors and project owners adopt technology such as BIM to enable more efficient planning, mandated apprenticeships to ensure skilled labour are bought up through the ranks, and more accurate planning of projects.”