How it works: Why do construction companies want to finish projects early?


The quick answer is incentives and disincentives. Many major construction projects with the Texas Department of Transportation call for the construction company to receive a bonus for predetermined milestones and again if they finish a project and open the road, highway or bridge significantly early.

On the other hand, construction companies start to lose profit if they are on the wrong side of the  deadline.

According to the Texas A&M University Transportation Institute, one of the larger incentives given for a project was the $2.64 billion Katy freeway reconstruction project that affected travel for approximately 280,000 vehicles per day.

A 24/7 schedule was adopted by the construction company for that project, and the early finish had TxDOT paying $50.9 million for meeting milestones. Early completion meant another $7.5 million in bonuses. The total amount of bonuses equaled about 2.4 percent of the total project cost, according to Texas A&M.

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Joe Warner
Joe Warner is managing editor of the nine Austin-Central Texas editions of Community Impact Newspaper. He previously served as senior editor of the flagship Round Rock, Pflugerville and Hutto newspaper. He came to Central Texas from Metro Detroit, where he was editor and general manager of several daily and weekly publications. He is the former president of the Michigan Press Association and was on the MPA board of directors for nine years.
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