Case Study: Cost Overrun from Equipment Failure on Central Arizona Project Canal Construction (Arizona, 2014)

Project Overview
• Name: Central Arizona Project Canal Expansion
• Location: Arizona
• Year: 2014
• Project Size: $180 million
• Scope: Canal widening and infrastructure improvements to increase water delivery capacity
• Lead Agencies/Contractors: Central Arizona Project (CAP) /

Category of the Issue, Problem, or Challenge
• Equipment Failure
• Cost Management

Summary of the Issue, Problem, or Challenge
Critical excavation and earthmoving equipment experienced frequent breakdowns, causing construction delays and significant repair costs that contributed to overall cost overruns.

Root Cause Analysis

• Aging Equipment Fleet: Some equipment was outdated and prone to failure under heavy use.
• Maintenance Gaps: Insufficient preventative maintenance led to unexpected breakdowns.
• Spare Parts Availability: Delays in obtaining critical parts prolonged downtime.
• Lack of Backup Equipment: Limited availability of backup machinery resulted in schedule impacts.

Impacts Due to the Issue, Problem, or Challenge

• Cost overruns of nearly 12% due to repair and rental costs.
• Project timeline extended by several weeks.
• Increased contractor claims and renegotiation of schedule and cost terms.

Corrective Actions Taken

1. Upgraded maintenance program with regular inspections and preventive repairs.
2. Invested in newer, more reliable equipment.
3. Established strategic spare parts inventory to reduce repair lead times.
4. Contracted additional backup equipment to minimize downtime risks.

Lessons Learned

• Proper maintenance and fleet management are critical for cost control.
• Backup equipment availability is essential to avoid costly delays.
• Equipment lifecycle and condition must be assessed in project planning.

Audit & Prevention: Project Control Questions to Ask on Future Projects to Help Control the Situation

• Is there a robust maintenance and inspection program for construction equipment?
• Are spare parts and backup equipment readily available?
• Are equipment condition and lifecycle risks factored into cost estimates?