Background information on the interviewed respondents during phase 2 can be found in
Table 1. It is noticeable that the dominating gender of interviewees were males, with a percentage of 100%, while a lack of female construction program managers is observed. This outcome is expected, since the construction industry is mostly dominated by male professionals, especially in higher ranking jobs or positions. Furthermore, the largest category of interviewees was contractors, with a percentage of 82%, followed by clients and consultants, each accounting for 9%. This is also an expected outcome, since the contractors are the most affected party when legislative changes occur, as they have to endure the change orders in the ongoing project(s) and, therefore, would be quite concerned about such an occurrence. In addition, 73% of the participants had an experience of 21 to 30 years in the construction industry, followed by 18% having an experience of 10 to 20 years, and only 9% having an experience of more than 30. This satisfies the sampling criterion, which required that the subject matter experts should have a minimum experience of 10 years in the construction industry, and would therefore provide the best possible insights into the impacts of legislative changes on change orders in construction program management. Furthermore, out of all 11 interviewees, only 18% were involved in construction programs that included more than 20 interrelated projects, while 55% of interviewees were handling less than 10 projects within their construction programs, and the remaining 27% were responsible for managing 10 to 20 projects per each construction program. Such data confirms that construction programs are common, and involve multiple interrelated and correlated projects, which requires a proper management strategy in order to achieve the desired goals.
3.1.1. Implications
The interviews yielded a total of 39 implications of change orders initiated due to legislative changes on a construction program level, which were further divided and categorized into six themes: cost overrun, time overrun, resource disruptions, quality management disruptions, legal implications, and positive implications, as detailed in
Table 2.
When legislative changes trigger change orders in construction projects, it often results in cost overruns for the overall construction program. This is due to various factors, such as the need for additional resources requirements, including new specialized workforce, training, new material specifications and equipment. Taxes and fees may also be impacted by legislative changes, further adding to the cost overruns. Additionally, administrative rules, such as new permits and additional mandated inspections, can cause delays and increase projects’ costs. Logistics and shipments may also be affected, leading to delays in material delivery and causing resources to be expended beyond the planned timeframe. Furthermore, failure to adhere to the new changes may result in penalties, adding to the overall cost overrun. Another consequence of legislative changes is missing business opportunities, as the budget variance may exceed the baseline budget due to changes in the law during the execution period. Delays in the approval of variation claims may further worsen the cost overruns in construction programs caused by legislative changes. These various factors collectively contribute to the increased costs in construction programs, resulting in the need for careful management and mitigation strategies to minimize the impact of legislative changes on program budgets.
Change orders triggered by legislative changes can result in time overruns in construction programs, where these delays can be caused by various factors, including delays in the execution of project tasks and completion of the interrelated projects within the programs. When legislative changes require modifications to existing designs or specifications, additional scope requirements may arise, resulting in further delays. Procurement processes may also be delayed due to changes in legislation, which can impact the availability of resources and materials needed for the construction program. Obtaining the necessary permits and No Objection Certificates (NOCs) from the relevant authorities may also experience delays due to legislative changes, which can further impact the project’s timeline within the program. Additionally, if there are changes in the number of working hours per day, as per the country’s laws and regulations, it can have a direct impact on productivity, since productivity in construction programs is often dependent on the number of working hours per day. It is crucial for construction managers and teams to be aware of and adapt to legislative changes to mitigate the risk of time overruns in construction programs.
Change orders initiated due to legislative changes can result in disruptions to resources in construction programs. These disruptions can manifest in various ways, including impacts on the availability and allocation of resources. New requirements for specialized workforces, training, material specifications, and equipment may arise due to legislative changes, which can affect the availability and allocation of resources in the project. Additionally, delays in releasing resources to other projects in the program may occur as a result of these changes. The supply chain and logistics may also experience pressure and disruption, as procurement arrangements may need to be adjusted to comply with new legislative requirements. The fiscal matters of the business, such as cash flow and investments, may also be impacted by legislative changes, which can affect the overall financial planning of the project. Furthermore, changes in licensing and consents as per the new laws can result in disruptions to the supply chain, logistics, and pooling of resources. Additionally, insurance arrangements may need to be extended or enhanced to comply with the new legislation, further impacting the overall construction program. It is essential for construction project managers to closely monitor and address any resource disruptions caused by legislative changes, to ensure smooth project execution and mitigate potential delays.
Change orders triggered by legislative changes can result in disruptions to quality management in construction programs. These disruptions can be evident in various ways, such as the need for additional approvals, shop drawings, and method statements. Legislative changes may also result in additional scope requirements and new design guidelines or specifications, which can impact the overall quality management of the construction program. Business codes and construction methodologies may also be impacted, leading to a lack of clarity in program execution. Licensing and consents may also be affected by legislative changes, which can result in delays and challenges in obtaining necessary approvals, policies, procedures and NOCs from concerned authorities. Changes in bankruptcy or insolvency laws can also impact the contractor’s enterprise and its contracts, further affecting the quality management of the projects and the overall program. Adherence to health, environment, and safety standards in the workplace may also be impacted by legislative changes, leading to potential risks and challenges. Productivity and procurement issues may arise due to changes in legislation, affecting the overall quality of program outcomes. Additionally, change management procedures may need to be adjusted to comply with new legislative requirements. It is crucial for construction managers to proactively manage and address these disruptions to quality management caused by legislative changes, to ensure that program objectives are achieved effectively and efficiently.
Change orders initiated due to legislative changes can have legal implications on construction programs. These implications can affect various aspects of the construction program, including dispute resolution, arbitration, liability under local law, labor regulations, contractual protections, and contractual flexibility. Changes in laws related to dispute resolution, such as amendments to Federal Arbitration Law, can impact the method used for resolving disputes in the construction industry. Legislative changes may also affect arbitration, with different groups arguing for or against proposed changes, leading to controversy. Liability under local law, including whether liability is excluded or restricted, can impact the clauses used in construction contracts. Changes in employment laws, particularly those related to labor regulations for the public and private sectors, can impact construction programs in terms of diversity and types of standard employment contracts provided to employees. Changes in the forms of construction contracts, such as Red Book, Yellow Book and Silver Book, can also have an impact on the contractual protections afforded to parties involved in the project. Failure to plan for and meet changes in the law and regulatory requirements can result in a lack of contractual flexibility, potentially leading to the project failing to meet its core requirements. It is essential for construction managers to stay abreast of legislative changes and proactively address any legal implications to ensure compliance and successful program outcomes.
Despite the fact that legislative changes have many implications on construction program management, they can have some positive impacts on construction projects and the overall construction programs. These impacts can be seen in various aspects, including sustainability, compliance with international codes, and socioeconomic benefits. Legislative changes that introduce tax incentives for certain businesses, particularly in highly demanded or government-backed sectors such as clean energy, can encourage investors to invest more in those sectors, resulting in positive impacts on sustainability. Compliance with international codes, such as fire codes and safety regulations, can be ensured through legislative changes, leading to safer and more efficient end products. Legislative changes can also have a positive impact on socioeconomic factors, such as job creation, pollution management, and noise control. For instance, changes in laws related to construction projects can result in the creation of more job opportunities, while also addressing issues related to pollution and noise management. Overall, change orders resulting from legislative changes can contribute to positive impacts on construction projects and programs by aligning them with international standards, promoting sustainability, and addressing socioeconomic concerns.
In summary, legislative changes often trigger change orders in construction projects, leading to cost, time, resource, quality management, and legal implications for construction programs. These changes necessitate additional resources, training, and adjustments to comply with new regulations, resulting in cost overruns, delays, and disruptions to resource allocation, quality management, and legal compliance. Despite these challenges, legislative changes can also have positive impacts on construction programs, promoting sustainability, compliance with international standards, and socioeconomic benefits such as job creation and pollution management. To navigate these complexities, construction managers must implement careful management and mitigation strategies to minimize the negative impacts and leverage the positive opportunities presented by legislative changes.
3.1.2. Mitigation Strategies
Additionally, the interviews also yielded a total of 19 mitigation strategies to effectively manage change orders resulting from legislative changes, as detailed in
Table 3.
First, conducting a comprehensive risk analysis and maintaining a register of potential risks can aid in identifying and addressing them proactively. Additionally, ensuring that the organization has a mature and proper structure in place enables efficient handling of change orders. Subcontracting certain works can also be considered a measure to minimize the impact of law changes on the parent organization. Creating a healthy job environment for workers in compliance with laws and regulations, including timely payment of overtime wages as required, can enhance efficiency and productivity. Moreover, for confidential projects, procuring the necessary manpower in adherence to laws and regulations ahead of time is recommended. Being aware of the procedure time ahead for obtaining construction NOCs and staying updated with changing requirements can prevent unexpected surprises during execution. Meticulous adherence to safety standards can prevent lost time injuries (LTIs) and promote a safe working environment. Moreover, regular maintenance of construction equipment and obtaining the required certifications as per laws and regulations is crucial to ensure compliance and smooth operations. Furthermore, implementing awareness programs with sufficient lead time for the construction industry to understand changes in laws and regulations and develop appropriate plans can minimize the impact of change orders. Additionally, providing adequate notice prior to the implementation of new legislation is essential for effective preparation. Also, implementing new legislation from the start of new contracts can streamline compliance. Consideration can also be given to compensating or waiving charges for contractors working on government contracts to alleviate financial burdens. Seeking professional help, such as consulting with attorneys or legal professionals, when in doubt, can provide expert guidance on adapting to changes in the law. The government can also play a role in supporting the local construction industry by controlling the prices of construction materials through subsidies or fee waivers. It is important to ensure that updates or changes to laws are implemented in a way that promotes growth and minimizes burdens on the construction industry, which is a significant contributor to the economy and society. Establishing a reliable agency set-up with efficient procurement and permit processes can mitigate the risk of unexpected adverse regulatory decisions. Streamlining procurement procedures or providing ease in implementation can further expedite compliance. Involving all stakeholders in decision-making processes through public surveys, social media polls, etc., can foster transparency and result in optimum outcomes within a reasonable timeframe prior to full implementation of new laws. Finally, timely approval of cost impacts of changes in laws by clients is crucial to prevent negative effects on the contractor’s cash flow.
In summary, conducting comprehensive risk analysis and maintaining a risk register help proactively identify and address potential issues. Additionally, establishing a mature organizational structure facilitates efficient handling of change orders, while subcontracting certain works can mitigate impacts on the parent organization. Ensuring compliance with labor laws, procuring necessary manpower, and staying updated on procedural requirements can further minimize disruptions. Adherence to safety standards and equipment maintenance ensure smooth operations, while early notice and implementation in new contract can streamline compliance from the very beginning. Government support through material price controls is also crucial. Transparent decision-making involving stakeholders expedites outcomes, and timely client approval of cost impacts preserves contractor cash flow. This collaborative approach will ensure a smoother transition when faced with legislative changes.