ABC Construction: Analyzing Project Delay in University Residence Hall

This report presents a memorandum from a scheduling consultant regarding a 12-day delay in a university residence hall project by ABC Construction. The delay is attributed to a drilling rig breakdown by subcontractor Mchole Drilling Co., resulting in a potential penalty of $240,000. The memo evaluates three options: repairing the rig, hiring another subcontractor, or accepting the delay and finding a parallel subcontractor. Option two, hiring an additional subcontractor for $15,000, is recommended due to its cost-effectiveness compared to the other options. The memo highlights the importance of mitigating project delays and provides a clear recommendation for the vice president's consideration.

ABC Construction
Memorandum
Date: June 19, 2019
To: Mr. Vice President
From: Scheduler Consultant
Project Title: University Residence Hall Project
Subject: Delay in Schedule of the Project
Main Contractor: ABC Construction Co.
Sub-Contractor: MChole Drilling Co.
During the analysis of the current project of residence hall for
the university it has been assessed that currently the project is
running late by 12 calendar days. The project has been delayed
due to drilling rig breakdown of the Mchole drilling company
which is a subcontractor of this project. As, total delay is in the
project is total 12 days the due to this the total penalty will be
$240,000.
Considering the present situation currently there are three main
options which can be executed in the current scenario which
are discussed in below:
Option One: The drilling rig can be repaired by the Mchole
drilling company which will take 3 weeks and during that time
another drilling rig will be implemented by them and for that no
extra payment will be claimed by the Mchole drilling company.
By this 1 week delay can be reduced. But for that total fine will
be $100,000.
Option Two: Another subcontractor will be hired by the
ABC Construction Co. and the progress will be speed up. To

normal the schedule total 3 week time is required and for hiring
the that extra subcontractor the cost will be $5000 per week
which becomes total of $15,000 and this amount of money will
be compensated by Mchole drilling company.
Option Three: Third option is allowing the current delay
and hiring some other drilling subcontractor who can work
parallel so that the current delay can be mitigated during the
finish phase. No proper expenses is measured in this case.
All the available options has been evaluated here very much
carefully and it has been assessed that option two is most
beneficial among all the three options. The option two is
beneficial over the option one as in option one total extra cost
is $100,000 and these must be given by the ABC construction
co. while for the option two total extra cost is $15,000 which is
significantly less. Option three has been eliminated in this case
as there is no assurance that some optional subcontractor will
be found at the right time and there is no approximate cost has
been estimated for this. For this reason option two has been
recommended in this case.
In conclusion, as there is an active delay in the current project it
must be mitigated with proper acceptance. In further, for any
type of further information you can contact me freely.
Regards,
Scheduler Consultant
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