🇺🇸United States

Construction Delays and Change Orders from Poor Utility Conflict Management

5 verified sources

Definition

When underground utilities are not accurately located and conflicts are discovered late (during construction instead of design), projects incur delay claims, change orders, and added relocation work. SHRP2 and DOT utility conflict management studies document that unmanaged utility conflicts are a major driver of construction cost overruns on transportation and utility projects.

Key Findings

  • Financial Impact: Case studies in SHRP2 R15B show projects incurring hundreds of thousands to millions of dollars in additional construction costs from delay claims and change orders tied to late‑identified utility conflicts; across a DOT program this aggregates to multi‑million‑dollar overruns annually.[1][4][3]
  • Frequency: Daily on active projects (conflict discovery, field redesign, and delay negotiations recur throughout construction seasons).
  • Root Cause: Inadequate early‑phase utility investigation, incomplete or inaccurate underground utility location data, and lack of a structured Utility Conflict Management (UCM) process mean many conflicts are only discovered in the field, when design flexibility is low and contractor delay claims are high.[1][3][4][5][8]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Utility System Construction.

Affected Stakeholders

Utility locating technicians, Utility coordination engineers, Project managers (utility owner and contractor), Construction managers, DOT/owner utility accommodation staff, Estimators and schedulers

Deep Analysis (Premium)

Financial Impact

$100K-$1M+ per project in delay claims and change orders • $100K-$400K per conflict in design rework when discovered late • $100K-$500K per missed conflict in resulting change orders and delays when conflict discovered in construction phase

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Current Workarounds

Administrator manually processes change order requests in spreadsheet; tracks regulatory delays in Outlook; communicates via email with utility and contractor; manages contract amendments manually • Administrator manually tracks change orders in spreadsheet; communicates with multiple municipal departments via email; processes contract amendments manually; manages claims via email • Administrator processes change orders manually in spreadsheet; tracks telecom coordination delays via email and Outlook; documents contract amendments in Word; communicates status via email

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Loss of Field and Design Capacity from Manual Utility Conflict Resolution

SHRP2 R15B and DOT implementation reports attribute measurable schedule reductions and fewer coordination cycles to UCM; agencies report saving weeks to months per project, equivalent to tens to hundreds of thousands of dollars of engineering and construction management labor annually across a program.[1][3][4][5][8]

Rework and Field Redesign from Inaccurate Utility Location Data

Case examples in SHRP2 R15B and state UCM guidance describe projects incurring additional relocation construction, redesign effort, and contractor rework costs often in the hundreds of thousands of dollars per major conflict, recurring across large programs to multi‑million‑dollar yearly impacts.[1][3][4][5][8][9]

Regulatory and Safety Exposure from Unmanaged Utility Conflicts

While individual penalty amounts vary by incident and jurisdiction, FHWA/SHRP2 materials stress that avoiding utility disruptions and associated claims is a key economic benefit of UCM; agencies implement UCM specifically to reduce the financial risk of outage‑related claims and safety incidents, which can run from tens of thousands to millions of dollars per serious event.[1][4][8]

Public and Stakeholder Disruption from Late Utility Conflict Resolution

Agencies and utilities incur indirect financial losses through reputational damage, additional public outreach, traffic control extensions, and potential business interruption claims; SHRP2 cites reduced public impact as a primary benefit of UCM, implying that in its absence projects bear recurring costs for prolonged traffic management and stakeholder mitigation, often in the tens to hundreds of thousands of dollars per major project.[1][4][7]

Suboptimal Design and Procurement Decisions from Poor Utility Conflict Visibility

Misjudged relocation scope, underpriced bids, and later change orders tied to unforeseen conflicts can add hundreds of thousands of dollars per project; SHRP2 identifies reduced contractor change orders and improved project development as tangible economic benefits where UCM is implemented, indicating that the baseline (without UCM) embeds recurring decision‑related losses across project portfolios.[1][3][4][5][8]

Under‑Recovered Utility Relocation and Delay Costs Due to Weak Conflict Documentation

While specific dollar figures depend on contracts, SHRP2 and DOT manuals note that better conflict documentation reduces contractor delay claims and clarifies cost responsibility, implying that in baseline conditions owners often lose significant sums in unrecovered relocation and delay expenses—potentially hundreds of thousands per large project across many projects per year.[1][4][5][8]

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