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1
Maniar, H. "Contingency Management in Indian Construction Projects." Journal of Construction Business and Management 4, no. 2 (December 4, 2020): 11–24. http://dx.doi.org/10.15641/jcbm.4.2.840.
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The successful completion of Indian construction projects possesses an inherent uncertainty due to the nature of the construction industry along with prevailing tepid recovery of the Indian economy, which has made it difficult for construction companies to achieve required operational and financial performance. This necessitates having accurate project cost estimation and efficient contingency management to shield unknown project risk and address cost overrun problems. Therefore, this study aims to assess the current state, the issues faced in contingency management and evaluating the effectiveness of contingency in overcoming cost overrun problems in Indian construction companies. The study preferred a quantitative approach in capturing the required data by using structured questionnaires collected from 100 Indian construction companies (of contractors, vendors/suppliers, customers, and consultants) out of 335 companies with a response rate of 29.85%. This, along with archival data analysis of 50 Indian construction projects completed between Calendar Year (CY) 2014 to 2019. The captured data were analysed using simple statistical tools like Relative Importance Index (RII), mean score, standard deviation and ranking methods to ensure relevant results aligned with research objectives. The result findings of the study revealed that 60% of Indian construction companies preferred the traditional percentage method for contingency sum percentage addition to estimated project cost (a subjective approach based on the historical project performance) which may not be adequate in overcoming cost overrun problems. Archival data analysis found that contingency consideration was effective in accommodating cost overrun problems in 9 (18%) projects out of 50 projects. The study further found that contingency was utilised in an unplanned mode and having unclear contingency forecasting strategies. Based on result findings and observations, this study concludes that contingency should be estimated based on the scientific approach in place of a subjective approach to address project risks adequately, this along contingency consideration should be an integral part of the project risk assessment and should be effectively utilised during the execution stage.
Keywords: Contingency, Cost Overruns, Indian Construction Projects, Operational and Financial Performance, Project Risk.
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Saidu, Ibrahim, W. Shakantu, A. Adamu, and I. Anugwo. "A BESPOKE APPROACH FOR RELATING MATERIAL WASTE TO COST OVERRUN IN THE CONSTRUCTION INDUSTRY." Journal of Construction Business and Management 1, no. 1 (April 18, 2017): 39–52. http://dx.doi.org/10.15641/jcbm.1.1.63.
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The problems of material waste and cost overruns are common in the construction industry. These problems occur at different stages of a construction project, from planning, design to project completion. The argument on how to eliminate cost overrun has been on-going for the past 70 years as on-site wastage of materials leads to increase in the final project cost. This paper examines the relationship between the causes of material waste and those of cost overrun at the pre-contract and post-contract stages of a project. The desktop methodological approach was firstly adopted in comparing the causes of material waste and those of cost overruns from the literature, in order to determine the possible relationship. Subsequently, interviews were purposively conducted with construction professionals within Abuja, Nigeria, in order to verify the literature based information. The result reveals that all the causes of material waste also cause cost overrun at the pre-contract and the post-contract stages of a project. 96.88% and 81.81% of the causes of cost overrun also cause material waste at the pre-contract and post-contract stages respectively. Other causes which are not related are mostly, the micro-economic and macro-economic factors. These results are not different from those of the interviews conducted with professionals and summarised in the tick box. It was also found that to achieve Effective Construction Material Waste Management (ECMWM) for any construction project, material waste must be controlled at its sources and causes, and at different stages of a project. Based on these findings, it can be concluded that effective management of material waste would translate into a reduction in the level of project cost overrun. The study recommends that construction-project managers, as well as the construction practitioners should encourage the management of material-waste causes, as it has the potential to minimise cost overrun for projects.
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Famiyeh, Samuel, Charles Teye Amoatey, Ebenezer Adaku, and Collins Sena Agbenohevi. "Major causes of construction time and cost overruns." Journal of Engineering, Design and Technology 15, no. 2 (April 3, 2017): 181–98. http://dx.doi.org/10.1108/jedt-11-2015-0075.
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Purpose In Ghana, the duration of construction projects from inception to completion is becoming a great concern, recently, especially among clients and beneficiaries, because of the rising interest rates, inflation, development plan targets, among other factors. Hence the need to understand the causes of delays and cost overrun in the construction sector has become more important than ever. This study therefore aims to identify the major factors underlying time and cost overruns in projects related to the education sector in Ghana to proffer practical solutions in addressing them. Design/methodology/approach The study conducted a survey among clients’ consultants and representatives of the contractors working on about 60 government school projects. A relative importance index was used to determine the relative effects of the factors causing construction time and cost overruns. Findings The key factors causing construction time overrun were: financial problems, unrealistic contract durations imposed by clients, poorly defined project scope, client-initiated variations, under-estimation of project cost by consultants, poor inspection/supervision of projects by consultants. Other factors were underestimation of project complexity by contractors, poor site management, inappropriate construction methods used by contractors and delays in the issuance of permits by government agencies. Factors affecting cost overruns were financial difficulty by client, delays in payments of completed works, variations in designs, lack of communications plans, poor feasibility and project analysis, poor financial management on site and material price fluctuations. Research limitations/implications The research was limited to only the educational sector projects. Practical implications Practically, this study highlights for the construction sector the critical factors causing project time and cost overruns in Ghana. Identification of these factors provides the basis for pragmatic solutions to enhance the chances of project success. Social implications The identification and solutions to project time and cost overruns, especially for educational sector projects, contribute toward making public goods more affordable and accessible to most citizens, particularly in developing countries. Originality/value This study contributes to the debate on factors causing project time and cost overruns in the construction sector especially from a developing country’s perspective.
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Chadee, Aaron, Salisha R. Hernandez, and Hector Martin. "The Influence of Optimism Bias on Time and Cost on Construction Projects." Emerging Science Journal 5, no. 4 (August 1, 2021): 429–42. http://dx.doi.org/10.28991/esj-2021-01287.
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The unresolved scholarly debate to curtail cost and time performances in projects has led to alternate solutions, departing from the dominant technical school of thought to include concepts from behavioural sciences. In this paper, we consider the psychological effect, namely optimism bias, as one of the root causes for delays in cost overruns on projects. The research objectives were to determine the level of bias among project participants, rank time and cost overrun causes according to the participants’ bias score and establish a mitigation strategy to curb potential delays and cost overrun impacts based on the bias scores obtained. A literature survey was conducted to determine causal factors contributing to delays and cost overruns linked to optimism bias. Through a pilot survey of three semi-structured interviews, eighty factors obtained from the literature survey were reduced to 24 critical delay and cost overrun factors relevant to Trinidad and Tobago. A questionnaire was subsequently developed seeking construction professionals to rate their bias scores based on an 11-point Likert scale. The research confirms that project planners and decision-makers exhibit moderate levels of optimism bias; however, participants lacked awareness of the impact of optimism bias on projects outcomes. Project location, environmental impacts and historic preservation, and labour disputes are the top three critical factors where project professionals displayed increased optimistic tendencies. It is proposed that contingency “time window” and reference class forecasting be implemented as control mechanisms to mitigate the impacts of time and cost overruns on projects. This research introduces a novel method to account for and measure optimism bias on construction projects. This study adds knowledge into delays and cost overruns causation and provides a foundation for future studies on quantifying psychological effects on projects and enhancing overall project management practices. Doi: 10.28991/esj-2021-01287 Full Text: PDF
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Ameh, Oko, and Emeka Osegbo. "Study of relationship between time overrunand productivity on construction sites." International Journal of Construction Supply Chain Management 1, no. 1 (December 31, 2011): 56–67. http://dx.doi.org/10.14424/ijcscm101011-56-67.
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The history of the construction industry worldwide is full of projects that were completed with significant time and cost overruns. In an attempt to reverse this trend, this study aims at establishing the relationship between time overrun and labour productivity on construction sites in Lagos, Nigeria. 43 technical and management staff of some medium and large construction firms based in Lagos, Nigeria were sampled and administered a questionnaire survey. The questionnaire contained 18 causes of project time overrun and 14 causes of low labour productivity which had been identified from the literature reviewed. With these a relationship between project time overrun and low labour productivity was established. Both descriptive and inferential statistics were used in analyzing the data. Results indicate that inadequate funds for the project, inadequate planning before project takeoff, inadequate tools and equipment and delay in delivery of material top the list of major causes of time overrun while the use of wrong construction methods, inadequate construction materials and inaccurate drawing/specification are the key factors causing low labour productivity on construction sites. Significant negative relationship was found between time overrun and labour productivity in construction sites in Nigeria. The study concludes by recommending that early appointment of project managers could ensure proper management of both the human and material resources that could guarantee improved productivity and ultimately save projects from time overrun.
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Idrees, Shehryar, and Muhammad Tariq Shafiq. "Factors for Time and Cost Overrun in Public Projects." Journal of Engineering, Project, and Production Management 11, no. 3 (May 21, 2021): 243–54. http://dx.doi.org/10.2478/jeppm-2021-0023.
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Abstract The construction industry in Pakistan is experiencing a surge in public sector projects due to major investments in infrastructure projects. Project delays and cost overrun are common features in public sector construction projects in Pakistan. Therefore, an understanding of the causes of time and cost overrun in public projects is essential. This paper investigates delay and cost overrun factors within the context of public sector projects in Pakistan. This study identifies 48 potential factors from existing literature and semi-structured interviews were used to refine the identified factors into ten categories. A questionnaire survey was used to establish a hierarchy of factors using descriptive statistics. The results showed that the major causes of time overruns in public projects were (1) legal issues, such as court stay orders, land acquisition, relocation of public facilities; (2) technical errors leading to low-quality drawings, rework, and errors at bidding stage; and (3) Poor project management. The findings of this research contribute to understanding the causes of project delays in public sector projects in Pakistan.
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Asiedu, Richard Ohene, Nana Kena Frempong, and Hans Wilhelm Alfen. "Predicting likelihood of cost overrun in educational projects." Engineering, Construction and Architectural Management 24, no. 1 (January 16, 2017): 21–39. http://dx.doi.org/10.1108/ecam-06-2015-0103.
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Purpose Being able to predict the likelihood of a project to overrun its cost before the contract signing phase is crucial in developing the required mitigating measures to avert it. Known parameters that permit the timely prediction of cost overrun provide the basis for such predictions. Therefore, the purpose of this paper is to develop a model for forecasting cost overruns. Design/methodology/approach Ten predictive variables known before the contract signing phase of a project are identified. Based on a survey approach, information on 321 educational projects completed are compiled. A multiple linear regression analysis is adopted for the model development. Findings Five variables – initial contract sum, gross floor area, number of storeys, source of funds and contractors’ financial classification are observed to influence cost overruns. The model, however, yields a fairly weak coefficient of determination with a mean absolute percentage error of 30.22 and 138 per cent, respectively. Research limitations/implications The model developed focussed on data only educational projects sampled from three out of the ten administration regions in Ghana based on a purposive sampling approach. Practical implications Policy makers and construction managers working on public projects stand to gain tremendous assistance in formulating and strengthening their own in-house cost forecasting at the precontract phase based on “what if” analysis to generate various alternative predictions of cost overruns. Originality/value Considering the innate nature of cost overruns within the Ghanaian construction industry often resulting to project abandonment, this research presents a unique dimension for tackling cost overruns based on a predictive approach.
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Aje, Olaniyi Isaac, Oluwole Alfred Olatunji, and Olanrewaju Augustine Olalusi. "Overrun causations under advance payment regimes." Built Environment Project and Asset Management 7, no. 1 (February 6, 2017): 86–98. http://dx.doi.org/10.1108/bepam-06-2015-0028.
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Purpose Evidence suggests project owners could use advance payments to prevent cost escalations. The purpose of this paper is to elicit the relationships between causations of overruns when advance payments are issued to contractors. Design/methodology/approach In total, 97 responses from a questionnaire survey were analysed. Additional data on 51 projects, completed between 2000 and 2014 under different advance payments regimes, were also obtained and analysed. Findings Project owners issue advance payments to contractors so as to avoid delays. However, statistical correlation between advance payments and overrun causations are not significant. Although cost overruns were higher in large projects than in small projects, schedule overruns were more in small projects than in large projects. Schedule overruns were caused most significantly by contractors’ site management approaches. Design and documentation issues were identified as the most prevalent cause of cost overruns. Regression models are proposed to elicit overruns when advance payments are issued. Practical implications Extant debates on project overruns in construction and project management literature are robust. Nonetheless, the study elicits considerable knowledge gaps regarding the roles of advance payments in fostering project performance. Originality/value This pioneering work indexes the relationship between advance payment and project overruns in Nigeria. It is also the first attempt to document the probability distribution of overruns in Nigeria, particularly under specific advance payment regimes.
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Eden, Colin, Fran Ackermann, and Terry Williams. "The Amoebic Growth of Project Costs." Project Management Journal 36, no. 2 (June 2005): 15–27. http://dx.doi.org/10.1177/875697280503600203.
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In the public arena, we often hear about projects that have suffered massive cost overruns. Often they are related to large public construction projects such as airports, bridges, or public buildings. Large overruns also exist in private industry. However, often these do not appear in the newspapers, so the public is not as aware of them. Of course, not all projects go badly wrong, but quite a few do, and frequently we find ourselves uncertain of the causes for such overruns. In this paper, industrial projects that overrun and overrun in a surprising manner are considered. In other words, the paper considers those many projects where the extent of the overrun is well beyond what might ever have been anticipated, even though what was going wrong within the projects was, for the most part, understood. The basis for the content of the paper (that is, the structure and lessons), are drawn from a postmortem analysis of many large projects as part of claims analysis, particularly “delay and disruption” claims for projects whose total expenditure appeared, at first look, inexplicable or surprising. The aim of the paper is to contribute to an understanding of how projects go badly wrong, when they do, and in particular to draw some lessons from this exploration that are likely to help all managers. The reasons for cost escalation are not just the responsibility of project managers.
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Sohu, Samiullah, Abd Halid Abdullah, Sasitharan Nagapan, Ashfaque Ahmed Jhatial, and Muhammed Tahir. "Contributing Cost Variation Factors in Highway Projects." Civil Engineering Journal 4, no. 8 (August 26, 2018): 1793. http://dx.doi.org/10.28991/cej-03091115.
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Cost overrun is known as when the final cost of any project surpasses the sectioned cost of the project at the floating of tender. Cost overrun or cost variation overrun is the main problem in the construction of highway projects in Sindh Province of Pakistan. To attain the main objective of the research a literature review was conducted and 64 general factors of cost overrun were found in construction industry. A questionnaire was developed and distributed among 28 well experienced experts having maximum experience in construction of building projects. Gathered data was analyzed by method of average index. Results shows that main and causative factors of cost variation were financial and cash issues faced by owner, slow information between parties, change in price of material, delay of design, poor site management, payment and financial issues problem faced by the contractor and delay in decision making. This research can help petitioners of highway projects to overcome these main and causative factors of cost.
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Irfan, Muhammad, Muhammad Sohail Anwar Malik, and Syyed Sami Ul Haq Kaka Khel. "Effect of factors of organizational structure influencing nonphysical waste in road projects of developing countries." Engineering, Construction and Architectural Management 27, no. 10 (May 28, 2020): 3135–53. http://dx.doi.org/10.1108/ecam-06-2019-0327.
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PurposeThe purpose of this research is to rank the most significant factors of organizational structure that can reduce time and cost overruns (nonphysical waste) in road projects of the developing countries. Additionally, the effect of factors of organizational structure on nonphysical waste in road projects is also measured.Design/methodology/approachFactors of organizational structure causing time and cost overrun are extracted through a content analysis of the published literature. Moreover, a questionnaire survey is carried out involving 128 professionals to assess the effect of organizational structure factors on time and cost overrun. Finally, to obtain a more objective evaluation, relative importance index and regression analysis techniques are utilized, and the most severe factors influencing time and cost overrun are indicated.FindingsThis study found out that top management support and procurement procedures are the most significant factors influencing time and cost overruns in road projects of the developing countries.Originality/valueA small number of studies have been conducted to investigate the effect of factors of organizational structure on time and cost overrun in the construction industry. And even more, its relation with respect to road projects of the developing countries is limited. This research highlights the effect of most significant factors of organizational structure that influence the nonphysical waste in road projects of the developing countries. Therefore, this study adds to the body of knowledge by recommending that all the stakeholders of construction project should pay close attention toward these factors to control the enigma of time and cost overrun. It might also prove helpful, if implemented to its full extent, in all the road construction activities undertaken.
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Amoatey, Charles Teye, and Alfred Nii Okanta Ankrah. "Exploring critical road project delay factors in Ghana." Journal of Facilities Management 15, no. 2 (May 15, 2017): 110–27. http://dx.doi.org/10.1108/jfm-09-2016-0036.
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Purpose The purpose of this paper is to investigate the causes of road construction delays in Ghana and identify appropriate mitigation measures. Design/methodology/approach The initial approach involved an empirical analysis of 48 road projects to quantify the extent of time. This was followed by a survey of the perception of road agency and donor partner officials of the critical causes of road project delays. Findings About 70 per cent of road projects experience delays and 52 per cent experience cost overruns. The average time overrun and cost overruns of road projects in Ghana was 17 months and US$1.15m (or 22.5 per cent), respectively. The five most critical causes of road construction delays were delay in finance and payment of completed work by owner (client-related); inadequate contractor experience (contractor-related); changes in scope by the owner during construction (client-related); delay to furnish and deliver the site to the contractor (client-related); and inflexible funding allocation for project items (donor-related). Research limitations/implications The most critical constraint of this study is the fact that findings are based on only the views of industry professional experts. It may be assumed that despite using broadly used terminology to refer to the causes of project delays, the interpretations by respondents may have differed from those intended. Further research could look at the correlation between time overrun and cost overrun using principle component analysis. Practical implications The identified delay factors are not unique to the road sector. From both academic and practical perspectives, the results emphasizes on the need for a holistic and integrated risk management model for the entire construction industry in Ghana. Originality/value The paper examined the causes of road project delays in the Ghanaian context and recommended remedial measures.
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Chadee, Aaron Anil, Xsitaaz Twinkle Chadee, Indrajit Ray, Abrahams Mwasha, and Hector Hugh Martin. "When Parallel Schools of Thought Fail to Converge: The Case of Cost Overruns in Project Management." Buildings 11, no. 8 (July 27, 2021): 321. http://dx.doi.org/10.3390/buildings11080321.
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This paper investigates the conflicting and contrasting views between two prominent schools of thought (SOT), the conventional project management empirical school and the incoming behavioural and psychological sciences, to explain the cost overrun phenomenon in transportation infrastructure projects. Although theories within these SOTs seem to coexist and are used interchangeably, there exists a widening knowledge gap that leads to conflicting and contrasting ideological views. In this paper, we contend that there is a lack of a cross-fertilisation mechanism to fuse and co-join contemporary theories on cost overruns. This has led to the encapsulation and fragmented adhocracy in theory building. Utilising a critical review approach, this study proposes the concepts of ideological distancing and encapsulation between “empiricism” and “behavioural” SOTs as the focus of analyses for understanding the root causes of cost overruns in project studies. The study showed that the extant debate on cost overruns is limited and divergent, effectively contributing to the problem of continued expansion and non-convergence of theories that maintain parallel identities. This creates a space for inquiry, reflecting, theorising, and debating for the convergence of SOTs on cost overrun research and theories on what can be deemed project knowledge. This paper contributes to extant project studies by identifying the need for convergence and co-joining theories with different epistemes through causal linkages. Consequently, this will improve the public sector’s infrastructure policymaking by exposing the theoretical limitations of the current ad hoc manner and application of project management concepts based on the project professionals’ bounded decision-making rationalities.
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Ahiaga-Dagbui, Dominic D., and Simon D. Smith. "Rethinking construction cost overruns: cognition, learning and estimation." Journal of Financial Management of Property and Construction 19, no. 1 (April 7, 2014): 38–54. http://dx.doi.org/10.1108/jfmpc-06-2013-0027.
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Purpose – Drawing on mainstream arguments in the literature, the paper presents a coherent and holistic view on the causes of cost overruns, and the dynamics between cognitive dispositions, learning and estimation. A cost prediction model has also been developed using data mining for estimating final cost of projects. The paper aims to discuss these issues. Design/methodology/approach – A mixed-method approach was adopted: a qualitative exploration of the causes of cost overrun followed by an empirical development of a final cost model using artificial neural networks. Findings – A conceptual model to distinguish between the often conflated causes of underestimation and cost overruns on large publicly funded projects. The empirical model developed in this paper achieved an average absolute percentage error of 3.67 percent with 87 percent of the model predictions within a range of ±5 percent of the actual final cost. Practical implications – The model developed can be converted to a desktop package for quick cost predictions and the generation of various alternative solutions for a construction project in a sort of what-if analysis for the purposes of comparison. The use of the model could also greatly reduce the time and resources spent on estimation. Originality/value – A thorough discussion on the dynamics between cognitive dispositions, learning and cost estimation has been presented. It also presents a conceptual model for understanding two often conflated issues of cost overrun and under-estimation.
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Shehu, Zayyana, Intan R. Endut, and Akintola Akintoye. "Factors contributing to project time and hence cost overrun in the Malaysian construction industry." Journal of Financial Management of Property and Construction 19, no. 1 (April 7, 2014): 55–75. http://dx.doi.org/10.1108/jfmpc-04-2013-0009.
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Purpose – The delivery of construction projects in Malaysia is plagued by time overruns, which turns what should have been successful projects into those incurring additional costs, or money-losing ventures; as well as leading to various other unexpected negative effects and faute de mieux situations. The purpose of this research is to assess those factors leading to time overrun in Malaysian construction projects. The perceptions of public and private sectors, contractors, clients, and consultants are compared relative to a list of factors derived from the review of extant literature in project delay. Design/methodology/approach – The research data were collected through an industry-wide questionnaire survey circulated across the Malaysian construction industry. The research develops a list of 84 time overrun factors. Responses were collected from 49 clients, 51 contractors, and 105 consultants, to explore and analyse the major factors that are responsible for causing time overrun based on sectors (public and private), organisations (clients, contractors and consultants) and professional roles. Findings – Project delays beyond contract dates are predominantly caused by contractors and are usually associated with financial factors. “Cash flow problems faced by the contractors” was found the major factor, which contributed to project delays, whereas “storage on site” was seen as the least significant factor. Practical implications – It is noteworthy that the findings in this research have a regional focus; it is, therefore, suggested that readers from other sections of the world exercise caution in applying the findings. As it is believed that every construction industry has its nature, culture and regulations, these factors can change as a result of such differences. Originality/value – This research provides stakeholders with information on factors, which, if properly understood, can make project delays less likely.
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Alolote, Amadi. "Towards Critical Realism in Cost Overrun Research." INTERNATIONAL JOURNAL OF INNOVATION AND ECONOMIC DEVELOPMENT 4, no. 6 (2019): 23–31. http://dx.doi.org/10.18775/ijied.1849-7551-7020.2015.46.2002.
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Construction management, as an emergent field of research, is yet to have a recognized methodological orientation, characteristic of other more established domains, and therefore builds on the traditional philosophical assumptions of related natural and social science research. The term “Methodological pluralism,” has thus been used to describe the use of a multiplicity of philosophies and methods, compatible with the study of construction phenomena. This study narrows down the philosophical argument in construction management to within the specific domain of cost overrun research, to systematically articulate the shortcomings in the methodological/philosophical tradition embraced by previous studies. Empirical profiling of cost overrun research reveals the predominance of mono-method studies based on questionnaire survey methods, correlative analysis, and archival data modeling techniques, all of which are underlain by positivism. The study argues that such positivist philosophies, although methodologically valid, cannot adequately explain and provide an in-depth understanding of the contextual drivers in construction organizations, that trigger the more tangible technical constructs, leading to the phenomena of cost growth in projects. Joining in the chorus call for methodological pluralism in construction industry research, this study makes a case for critical realism specifically in the context of cost overrun research.
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Plebankiewicz, Edyta. "Model of Predicting Cost Overrun in Construction Projects." Sustainability 10, no. 12 (November 23, 2018): 4387. http://dx.doi.org/10.3390/su10124387.
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During the construction phase, significant differences between the planned and actual costs of construction projects frequently occur. The paper describes the concept of a model of prediction of the increase in the costs of construction works in relation to those planned. The assumption of the model is to determine the probability of the cost increase for the elements of the object for which it is the largest. A fuzzy Mamdani inference method was proposed for the selection of the elements to be evaluated. In the cost prediction model, fuzzy relations and the compound max-min relations were used. The result of the model are the probabilities of cost overrun for works most exposed to changes in costs. The model can be helpful mainly for the contractor who wants to know not only the probability of the total cost overrun but also the possibility and amount of increase in the costs of individual packages of works or detailed construction works necessary to complete a construction project. Such an approach may help to properly plan expenses related to the implementation and schedule of works along with the cash flow for the project.
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Rahman, Ismail Abdul, Aftab Hameed Memon, Nor Hazana Abdullah, and Ade Asmi Abdul Azis. "Application of PLS-SEM to Assess the Influence of Construction Resources on Cost Overrun." Applied Mechanics and Materials 284-287 (January 2013): 3649–56. http://dx.doi.org/10.4028/www.scientific.net/amm.284-287.3649.
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Being resource-driven industry, success and failure of construction projects highly depend on resources. As construction industry is now-a-days facing major problem of cost overrun worldwide, this can be contributed by construction resource issues. Hence, this study aimed to assess impact of construction resource on project cost overrun. Structured questionnaire survey was carried out to understand the perception of construction practitioners. A total of 106 samples were collected. Partial Least Square (PLS) of Structural Equation Modeling (SEM) approach regarded as the graphical equivalent of a mathematical representation of relationship between dependant variable to explanatory variable was adopted for data analysis, as common methods of data analyze does not give insight of underlying relationships between various factors. In analyzing cause-effect relationships, PLS-SEM is a dominant approach to establish rigor in complex models. Smart PLS 2.0 software was used to test the relationship between resources and cost overrun. The developed structural model indicates that relationship between resource and cost overrun was satisfactory by having substantial explaining power (GoF=0.529) and 40% of the cost overrun was influenced with resources. The most significant resource was construction material. Hence, effective material planning and management is vital to improve potential construction cost overrun.
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Hamed Issa, Usama, Salah Attia Mosaad, and Mohamed Salah Hassan. "A MODEL FOR EVALUATING THE RISK EFFECTS ON CONSTRUCTION PROJECT ACTIVITIES." JOURNAL OF CIVIL ENGINEERING AND MANAGEMENT 25, no. 7 (July 15, 2019): 687–99. http://dx.doi.org/10.3846/jcem.2019.10531.
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Cost overruns and time delays are considered to be very important challenges for the majority of construction projects. These challenges are typically attributed to their associated risks. Due to the risky and uncertain nature of construction projects, an increasing amount of attention is given to estimating and overcoming cost overruns and time delays. New techniques are being developed to help project managers to contractually complete projects within cost and time constraints. The objective of this study was to develop a new qualitative and quantitative risk analysis model that can be employed for construction projects. The proposed model, which is based on a fuzzy logic tool, consists of two modules for assessing risk factors that affect the main construction activities and computing the expected cost overruns and time delays that are associated with these risks. Using numerous logical rules, the model applies the probability of occurrences and impacts of the risks on the cost and time of the main activities. The Spearman and Kendall correlation coefficient tests are applied to verify and select a suitable membership function. Using four proposed membership functions, the results of these tests confirmed that the triangle membership function is suitable for the model. The model is verified by application to HVAC system activities in two actual construction projects, which serve as case studies. Two different methods are proposed and applied to quantify the cost overruns and time delays. The first method is based on determining the cost overruns and time delay values for each activity according to their weight in the system. Triple premise rules are proposed and applied in the second method, which is established to relate all activities. The results from the second method are more accurate compared with the first method based on actual data from the case study projects. In addition, the results demonstrated that the proposed model can be used to quantify the expected cost overrun and time delays in construction project activities and can be generalized and implemented in different construction activities.
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Plebankiewicz, Edyta, and Damian Wieczorek. "Prediction of Cost Overrun Risk in Construction Projects." Sustainability 12, no. 22 (November 10, 2020): 9341. http://dx.doi.org/10.3390/su12229341.
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The paper proposes a cost overrun risks prediction model, the structure of which is based on the fuzzy inference model of Mamdani. The model consists of numerous inputs and one output (MISO, multi-input-single-output), based on processes running consecutively in three blocks (the fuzzy block, the interference block, and the block of sharpening the representative output value). The input variables of the model include the share of element costs in the building costs (SE), predicted changes in the number of works (WC), and expected changes in the unit price (PC). The developed rule base makes it possible to determine the risk of cost overruns in the following categories: “very low”, “quite low”, “average”, “quite high”, and “very high”. Twenty-seven rules were assumed in the interference block. The operation of the model was illustrated by the example of selected elements of a road object and was validated by checking the correctness of the assumptions made at the design stage of the inference block rule base. It has been proven that with the increase of the share of element costs in the building costs (SE), predicted changes in the number of works (WC), and expected changes in the unit price (PC), the value of the risk exceeding the costs of a given element of the construction project (R) increases naturally and smoothly. It was emphasized in the conclusions that the cost overrun risks prediction model is intended for general contractors who subcontract many stages of works to their subcontractors in accordance with the agreed division into work elements.
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Abdullah, Muhammad Sani, Wesam S. Alaloul, Mohd Shahir Liew, and Bashar S. Mohammed. "Delays and Cost Overruns Causes During Construction of Palm Oil Refinery Projects." MATEC Web of Conferences 203 (2018): 02004. http://dx.doi.org/10.1051/matecconf/201820302004.
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Delays and cost overruns are obviously common problems in the construction industry in several developed and developing nations. The purpose of this study is to identify factors cause delays and cost overruns in the construction of palm oil refinery projects in Malaysia. A questionnaire survey of a randomly selected sample was filled by 89 respondents. The questionnaire included 179 factors which classified into 13 groups. The degree of importance of the delays and cost overrun factors were evaluated and ranked by importance degree, based on the viewpoints of stakeholders. The data was analytically investigated by descriptive statistic methods and Relative Important Index (RII). The results of RII showed that Delays in subcontractor’s work, Lack of subcontractor skill, and Poor/inadequate planning and scheduling with RII 0.78, 0.77, and 0.75, respectively, are the most important causes. These causes represent the baseline margin for project management of palm oil refinery construction and development. According to these results, it is suggested that: project client should collaborate with contractors and simplify payments procedures to mitigate delays; coordinate continuously and enhance the association among project stakeholders are obligatory in order to improve the project performance.
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Mathew, Anue Marry, and Neena S. Lal. "Identification of risk factors leading to cost and time overrun in B-O-T projects." Sustainability, Agri, Food and Environmental Research 10, no. 1 (March 12, 2021): 10. http://dx.doi.org/10.7770/safer-v10n1-art2466.
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As infrastructural investments are vital in developing countries, it’ll not solely facilitate to foster the economic growth of a nation, however it’ll additionally act as a platform within which new kinds of partnership and collaboration may be developed. The developments of BOT have attracted participation of native and foreign non-public sector capitalist to secure funding and to deliver projects on time, within the budget and to the desired specifications. There are many complexities in projects because of the variety of factors in project’s trend and also the dependence of project primarily on national factors. Because of these complexities and their long-term operation, the projects meet with uncertainty and numerous risks. Effective risk management methods and good managerial skills are required in guaranteeing the success of the project. In recent years, due to substantial increase in the amount of construction companies along with the changes in the government administrations, the construction projects are exposed to cost and time overrun and has huge impact on the progress of works within the industry. Although, the sector is considered to be a key driver of economic growth, time and cost overruns threaten to limit the sector’s potential to help achieve the desired growth and ensure efficient capital expenditure.
Keywords—BOT, cost overrun, delays, risk
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Hao, Yan E. "Research of Project Construction Cost Forecast Based on the Reliability." Advanced Materials Research 912-914 (April 2014): 1685–89. http://dx.doi.org/10.4028/www.scientific.net/amr.912-914.1685.
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The cost is one of the four major targets for the project management; this paper introduces the construction cost reliability as an indicator to measure the management level of project cost. Through the statistic analysis of historical data, the comparative analysis about the actual cost data and original planned cost for each unit of work in the finished project is conducted to confirm the probability distribution of cost overrun or cost saving and predict the reliability of cost, and this is applied in a real project case.
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Afzal, Farman, Shao Yunfei, Muhammad Sajid, and Fahim Afzal. "Integrated priority decision index for risk assessment in chaos: cost overruns in transport projects." Engineering, Construction and Architectural Management 27, no. 4 (October 24, 2019): 825–49. http://dx.doi.org/10.1108/ecam-02-2019-0079.
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Purpose Cost overrun is inherent to project chaos, which is one of the key drivers of project failure. The purpose of this paper is to explore the critical elements of complexity-risk interdependency for cost-chaos in the construction management domain by utilizing a multi-criteria decision model. Design/methodology/approach A total of 12 complexity and 60 risk attributes are initially identified from the literature and using expert’s judgements. For the development of a structured hierarchy of key complexity and risk drivers, a real-time Delphi process is adopted for recording and evaluating the responses from experts. Afterwards, a pair-wise comparison using analytical network processing is performed to measure complexity-risk interdependencies against cost alternatives. Findings The findings of the integrated priority decision index (IPDI) suggest that uncertainties related to contingency and escalation costs are the main sources of cost overrun in project drift, along with the key elements such as “the use of innovative technology,” “multiple contracts,” “low advance payment,” “change in design,” “unclear specifications” and “the lack of experience” appear to be more significant to chaos in complexity-risk interdependency network. Research limitations/implications This study did not address the uncertainty and vulnerability exit in the judgment process, therefore, this framework can be extended using fuzzy logic to better evaluate the significance of cost-chaos drivers. Practical implications These results may assist the management of cost overrun to avoid chaos in a project. The proposed model can be applied within project risk management practices to make better-informed technical decisions in the early phases of the project life cycle where uncertainty is high. Originality/value This research addresses the importance of cost overruns as a source of project chaos in dynamic systems where projects reach the edge of chaos and progress stops. A new IPDI index contributes toward evaluating the severity of complexity and risk and their interdependencies which create cost-chaos in infrastructure transport projects.
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Abu El-Maaty, Ahmed Ebrahim, Amr M. El-Kholy, and Ahmed Yousry Akal. "Modeling schedule overrun and cost escalation percentages of highway projects using fuzzy approach." Engineering, Construction and Architectural Management 24, no. 5 (September 18, 2017): 809–27. http://dx.doi.org/10.1108/ecam-03-2016-0084.
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Purpose Modeling represents the art of translating problems from an application area into tractable mathematical formulations whose theoretical and numerical analysis provides insight, answers and guidance useful for the originating application. The purpose of this paper is to determine the causal causes of schedule overrun and cost escalation of highway projects in Egypt in order to be used as independents variables in mathematical models for predicting the percentages of schedule overrun and cost escalation of such projects in Egypt. Design/methodology/approach A survey of a randomly selected samples yielded responses from 40 owners, 15 consultants and 56 contractors. The survey includes 38 schedule overrun factors and 26 cost escalation factors. The effectiveness degree of the identified factors has been identified by the triangle fuzzy approach. Findings The results of the survey show that “contractor’s technical staff is insufficient and ineligible to accomplish the project” is the most important cause of schedule overrun, while the major cause of cost escalation is inadequate preparation of the project concerning planning and execution. Originality/value The main contribution of this study is predicting the percentages of schedule overrun and cost escalation of highway projects in Egypt. Through the application of the linear regression analysis method and statistical fuzzy theory, four predictive models have been developed and it has been noted that the linear regression-based model shows prediction accuracy better than statistical fuzzy-based model in predicting percentages of schedule overrun and cost escalation.
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Wang, Jia Yuan, and Hong Ping Yuan. "Major cost-overrun risks in construction projects in China." International Journal of Project Organisation and Management 3, no. 3/4 (2011): 227. http://dx.doi.org/10.1504/ijpom.2011.042030.
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Mohd Ali, Mazurina, Sakinah Zahra Norman, Erlane K. Ghani, and Noor Hasniza Haron. "The Influence of Risk Management on Construction Project Performance: A Case Study." Journal of Social Sciences Research, SPI 1 (March 15, 2019): 69–75. http://dx.doi.org/10.32861/jssr.spi1.69.75.
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Risk Management is recognized as an important exercise that creates value to a project and improves project performance. Time, cost and quality are the primary measures of a project performance in this industry. The success or failure in any construction project can be monitored through the attainment of these primary measures. Notably, Malaysian construction industry is considered as one of the important industries that positively contribute to the increase of Gross Domestic Product and subsequently the growth of the country’s economic development. Unfortunately, this industry suffers poor performance in which it leads to failure in accomplishing effective time, cost and quality performance. Most construction projects face a schedule delay, cost overrun and are poor in product quality. Thus, the aim of this study is to determine the influence of risk management on construction project performance of Malaysian companies based on these three primary measures. The degree of diffusion of risk management practice in the chosen construction project in Malaysia is also examined. The methodological approach exploited in this study is a case study approach involving analysis of documented data and face-to-face interviews with key players that hold different roles and responsibilities. They include a director, project managers, finance managers, contract managers and quantity surveyor managers. The results demonstrate that adopting effective risk management practices positively impacts project performance thus leading to project success. Nevertheless, the lack of knowledge and poor communication of risk management practices in construction projects contribute to the weak implementation of an effective and systematic risk management practices in Malaysia.
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Mohd Ali, Mazurina, Sakinah Zahra Norman, Erlane K. Ghani, and Noor Hasniza Haron. "The Influence of Risk Management on Construction Project Performance: A Case Study." Journal of Social Sciences Research, Special Issue 5 (December 15, 2018): 936–42. http://dx.doi.org/10.32861/jssr.spi5.936.942.
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Risk Management is recognized as an important exercise that creates value to a project and improves project performance. Time, cost and quality are the primary measures of a project performance in this industry. The success or failure in any construction project can be monitored through the attainment of these primary measures. Notably, Malaysian construction industry is considered as one of the important industries that positively contribute to the increase of Gross Domestic Product and subsequently the growth of the country’s economic development. Unfortunately, this industry suffers poor performance in which it leads to failure in accomplishing effective time, cost and quality performance. Most construction projects face a schedule delay, cost overrun and are poor in product quality. Thus, the aim of this study is to determine the influence of risk management on construction project performance of Malaysian companies based on these three primary measures. The degree of diffusion of risk management practice in the chosen construction project in Malaysia is also examined. The methodological approach exploited in this study is a case study approach involving analysis of documented data and face-to-face interviews with key players that hold different roles and responsibilities. They include a director, project managers, finance managers, contract managers and quantity surveyor managers. The results demonstrate that adopting effective risk management practices positively impacts project performance thus leading to project success. Nevertheless, the lack of knowledge and poor communication of risk management practices in construction projects contribute to the weak implementation of an effective and systematic risk management practices in Malaysia.
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Oyieyo, Pamela Akinyi, Charles M. Rambo, and Anne Ndiritu. "Ranking the prevalence of construction cost overrun risk factors in completion of public-private partnership projects." International Journal of Research in Business and Social Science (2147- 4478) 9, no. 5 (September 20, 2020): 351–56. http://dx.doi.org/10.20525/ijrbs.v9i5.863.
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The purpose of the study was to identify and rank the prevalence and severity of risk factors construction cost overrun in Public-Private Partnership projects using a case study of Sondu-Miriu Hydroelectric Power Project in Kisumu County, Kenya. This study adopted a descriptive design and collected quantitative data analysed quantitatively using descriptive statistics. In total, 85 persons were identified to have taken part in the management and implementation of the study from whom a sample size of 71 participants was obtained. Questionnaires were emailed to the participants providing details of the study and requesting their participation. The study ranked the risk factors based on prevalence and severity from most prevalently severe to least prevalently severe as design changes, emerging tasks affecting delivery, construction task breakdown structure, design variations and failure of contractors to complete different tasks. Thus, stakeholders should participate fully in the project from design to avoid design changes leading to cost overrun. During implementation, the contractor and construction manager should device mechanisms to anticipate changes in the political environment as such changes determines government policies and decisions affecting the project funding, design and scope.
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Sudirman, Weddy Bernadi, and Sarwono Hardjomuljadi. "Project Risk Management in Hydropower Plant Projects." Journal of Infrastructure Development 3, no. 2 (December 2011): 171–86. http://dx.doi.org/10.1177/097493061100300205.
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The development of hydroelectric power plant is one of the efforts in utilising water resources for people’s welfare by generating the energy for electricity purpose. Nowadays, the installed capacity of hydro electric power plants is 3,529 MW from the total installed capacity 24,846 MW from various power plants owned by PT PLN (Persero) and the hydropower potential 75,000 MW all over Indonesia. Hydroelectric power plant has complex structures and involves large amounts of capital with a long-running construction period. This situation imposes uncertainty factors with considerably high risks. The construction phase is identified as a critical phase in hydropower projects where many unforeseen factors occur. Failure to manage project risks leads to significant problems for the client such as completion time delays and cost overruns. In order to prevent time delays and cost overruns in hydropower construction in PT PLN (Persero), the study on project risk management in the construction stage of hydropower plant projects had been conducted. The purpose of this study was to identify and measure the importance of construction risks and to determine the level of agreement or disagreement between the client, consultants and contractors on the ranking of construction risk in hydropower projects. The author selected the respondents from the clients, consultants and contractors’ personnel who had work experience in hydropower construction projects in PT PLN (Persero). JEL Classification: L74—Construction
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Marella, Giuliano, and Valentina Antoniucci. "Time Overrun in Public Works—Evidence from North-East Italy." Sustainability 11, no. 24 (December 10, 2019): 7057. http://dx.doi.org/10.3390/su11247057.
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Cost and time overruns in public mega-projects have been widely studied and considered as interdependent factors in the literature on project management and the public economy. On the other hand, small-scale projects for public works (costing under €100 million) are far more common and contribute to transforming cities and territories even more than mega-projects. Is the development of these kinds of projects affected in the same way by overrun issues? Do cost and time overruns always go hand in hand? The present contribution tries to answer these questions by means of an empirical study on a dataset of 4781 small public works planned and built in the Veneto Region (north-east Italy) from 1999 to 2018. Specifically, the analysis refers to the stage of development when the decision is made to outsource the work, that is, after the project’s design and before its construction. Our sample of data is considered both as a whole and clustered by period, cost, contractor and category of work. The results of our analysis and statistical modeling are counterintuitive, suggesting that time overruns do not depend on the cost dimension, whereas norms and regulations play a crucial part in extending the duration of public works. The threshold by law of 1 million € costs implies time-consuming procedures to verify abnormal offers in the bid, that double the average award time from 244 days to 479 days.
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Igwe, Uchenna Sampson, Sarajul Fikri Mohamed, Mohamed Bin Mat Dzahir Azwarie, and N. Paulson Eberechukwu. "Recent Developments in Construction Post Contract Cost Control Systems." Journal of Computational and Theoretical Nanoscience 17, no. 2 (February 1, 2020): 1236–41. http://dx.doi.org/10.1166/jctn.2020.8795.
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Construction Cost control is an integral part of Cost management processes of Construction projects. Project cost management involves all the processes involved in planning, estimating, budgeting, financing, Funding, managing and controlling costs so that the project can be scheduled for completion within the approved budget. Cost overrun is a major global issue in construction project performance which occurs predominantly during the construction phase of a project. Different cost control techniques and models have been in practice to ensure cost performance, yet construction projects are rarely completed within the scheduled budget. Due to this incessant cost variances in projects, cost control systems are still being reviewed. Different construction outfits employ different techniques or similar methods just to ensure that cost is within budget. The ultimate concern of the Quantity Surveyor (QS) is to ensure that track records of all activities during construction is well articulated to nearest accuracy for monitoring site expenditures. For this reason, the QS on site daily does the routine work of cost data collections, recordings, analysis and reporting to keep expenditure within budget. This is usually the normal routine in most construction outfits in developing and underdeveloped countries. Different technologies are currently and methods have been employed to increase the efficiency and accuracy of construction data for cost effectiveness. The current technological trend and innovations is therefore reshaping cost control systems with the use of new technologies and software. There are new developments in the methods of controlling cost during construction due to the recent construction innovations. This paper presents the recent developments involved in controlling the cost of construction projects at the construction phase with emphasis laid on the construction innovations and technological advancement. The current different technologies used in implementing cost control were X-rayed and how the present-day cost managers are utilizing the new developments.
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Alao, Oluwaseyi Olalekan, Godwin Onajite Jagboro, and Akintayo Opawole. "Cost and time implications of abandoned project resuscitation." Journal of Financial Management of Property and Construction 23, no. 2 (August 6, 2018): 185–201. http://dx.doi.org/10.1108/jfmpc-07-2017-0026.
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Purpose This paper aims to determine the effect of the period of abandonment on the final cost and duration of resuscitated tertiary educational building projects as a basis for enhancing the performance metrics of the projects and improving the availability of facilities in tertiary institutions in Nigeria. Design/methodology/approach A structured questionnaire was administered on 47 professionals involved in the physical development of construction projects in Osun State public tertiary educational institutions to provide primary data for the study. Secondary data relating to initial and final costs, initial and final completion dates, dates of abandonment, period of abandonment, date of re-award, etc. were obtained from selected resuscitated projects. Data were analyzed using relative significance index and regression analysis. Findings The most significant effects of project abandonment were found to be disappointment of populace and over-stretching of existing facilities. The study showed a directly proportional and an exponential effect of period of abandonment on percentage cost overrun of resuscitated projects, which were represented by yc = −329.755 + 19.545x and yc = 6.1662e0.0506x, respectively. A linear relationship between period of abandonment and percentage time overrun was represented by yt = 0.467 + 0.816x. Research limitations/implications The fact that the regression equations could not be validated because of paucity of data was identified as a limitation of this study. Practical implications This study adds to the body of knowledge on abandonment of building projects from a quantitative perspective. Findings have implications for guiding long-term infrastructure development plans in public tertiary educational institutions. Originality/value Maximum threshold at which abandoned projects may be resuscitated at an economic cost was established as 16 months. Findings further suggest that the economy of new construction would outweigh resuscitation of abandoned projects beyond this period.
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Jusoh, Zairra Mat, and Narimah Kasim. "Influential Factors Affecting Materials Management in Construction Projects." Management and Production Engineering Review 8, no. 4 (December 1, 2017): 82–90. http://dx.doi.org/10.1515/mper-2017-0039.
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Abstract Construction projects are more often than not plagued by poor performances such as delays, cost overrun, low productivity, construction wastes and compromised quality. Amongst the critical contributory factors of poor project performances, is the ineffectiveness of materials management occurring in the construction sites. Indeed, materials management is a very important component for construction projects. However, there are only limited numbers of research available regarding this topic. Thus, this research focuses its study on materials management, specifically in identifying the influential factors that affect materials management in the construction project activities. Literatures from books, journal articles and conference papers related to poor project performances and materials management have been reviewed. Consequently, this study sorted the salient influential factors and categorized them based on their specific group. Out of 47 factors identified, they are classified into 8 groups. They are (1) site condition; (2) planning and handling on site; (3) management; (4) materials; (5) supplier and manufacturer default; (6) transportation; (7) contractual; and (8) governmental interferences. In conclusion, this study contends that by identifying the influential factors affecting materials management, it will help construction players to avoid the occurrence of those factors and will minimize the negative impacts on the overall performance of construction projects. Hence, the handling-over of project will be according to schedule and not delayed by materials mismanagement.
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Kikwasi, Geraldine. "Causes and Effects of Delays and Disruptions in Construction Projects in Tanzania." Australasian Journal of Construction Economics and Building - Conference Series 1, no. 2 (February 5, 2013): 52. http://dx.doi.org/10.5130/ajceb-cs.v1i2.3166.
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Delays and disruptions are among the challenges faced in the course of executing construction projects. Delays as well as disruptions are sources of potential risks that current studies are looking into ways to manage such as technical, social, economic, legal, financial, resource, construction and commercial. The purpose of this research is to assess causes and effects and disruptions in construction projects. This study is descriptive, designed to obtain views from clients, consulting firms, regulatory boards and construction firms in regard to causes and effects of delays in construction projects. Two sampling techniques were used to select respondents namely: purposive and random sampling. Literature review, questionnaires and interviews techniques were used to collect data for the study. Findings reveal that the main causes of delays and disruptions are: design changes, delays in payment to contractors, information delays, funding problems, poor project management, compensation issues and disagreement on the valuation of work done. On the other hand, time overrun, cost overrun, negative social impact, idling resources and disputes are the main effects of delays and disruptions. The study concludes that there still exist a number of causes of delays and disruptions and their effects put construction projects at great risk that have an effect on their performance. It is therefore recommended that adequate construction budget, timely issuing of information, finalization of design and project management skills should be the main focus of the parties in project procurement process.
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Aghimien, Douglas Omoregie, Olufemi Osanyinro, and Taiwo Fadeke Adegbembo. "Cost and time performance of traditional-, direct labour- and management-procured public projects in Ondo State, Nigeria." Organization, Technology and Management in Construction: an International Journal 9, no. 1 (December 20, 2017): 1593–603. http://dx.doi.org/10.1515/otmcj-2016-0022.
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AbstractProcurement method over time has proven to have significant influence on the successful delivery of construction projects. Making the right decision in the selection of a procurement option to adopt is therefore crucial if a project is to succeed. This study therefore assessed the cost and time performance of selected public building projects procured using traditional, direct labour and management procurement options in Ondo State, Nigeria. A pro forma was used to gather cost and time data from government procuring entities in the state. In addition, a structured questionnaire was used to obtain information from construction professionals in these procuring entities, in order to ascertain the factors influencing the choice of procurement options adopted. The cost and time data gathered were analyzed using percentages and the paired-samples t-test, while those gathered on the factors influencing the choice of procurement options were analyzed using mean item scores and analysis of variance (ANOVA). The results revealed that although there is no significant difference between the initial and final costs of the assessed projects, some measure of cost overrun still exists. In addition, a considerable amount of time overrun was experienced on projects executed using the three different procurement options. The most significant factors influencing the choice of a procurement option are price competition, speed, time certainty and complexity of the project. It is believed that the findings of this study will provide public procuring entities with insight on the cost and time capability of these procurement methods and aid them in selecting the procurement option that will help in delivering public building projects within the budget and on schedule.
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Dunama, Muhammad, Zannah Ali, and Mohammed Usman. "CAUSES AND EFFECTS OF DELAYS AND DISRUPTIONS IN THE NIGERIAN CONSTRUCTION INDUSTRY." International Journal of Innovative Research in Education, Technology & Social Strategies 8, no. 1 (March 25, 2021): 66–75. http://dx.doi.org/10.48028/iiprds/ijiretss.v8.i1.07.
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Delays and disruptions are among the challenges faced in the course of executing construction projects in Nigeria. Delays as well as disruptions are sources of potential risks that current studies are looking into ways to manage such as technical, social, economic, legal, financial, resource, construction and commercial. The purpose of this research is to assess causes and effects of delays and disruptions in the Nigerian construction industry. This study is descriptive, designed to obtain views from clients, consulting firms, regulatory boards and construction firms in regard to causes and effects of delays in construction projects. Two sampling techniques were used to select respondents namely: purposive and random sampling. Literature review, questionnaires techniques were used to collect data for the study. Findings reveal that the main causes of delays and disruptions are: design changes, delays in payment to contractors, information delays, funding problems, poor project management, compensation issues and disagreement on the valuation of work done. On the other hand, time overrun, cost overrun, negative social impact, idling resources and disputes are the main effects of delays and disruptions. The study concludes that there still exist a number of causes of delays and disruptions and their effects put construction projects at great risk that have an effect on their performance. It is therefore recommended that adequate construction budget, timely issuing of information, finalization of design and project management skills should be the main focus of the parties in project procurement process.
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Gunawan, Liem Stefani Meilia. "OPTIMIZED MANAGEMENT STRATEGY FOR CONSTRUCTION PROJECTS CONSIDERING THE TRADE-OFF OF ESTIMATE SCHEDULE AND COST AT COMPLETION." Dimensi Utama Teknik Sipil 6, no. 2 (October 31, 2019): 26–37. http://dx.doi.org/10.9744/duts.6.2.26-37.
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Nowadays, the minimization of project time and cost is an important issue. However, time and cost problems are difficult to solve. They are affected by the uncertain factor. Then, the construction project always fails to achieve the effectiveness of time and cost performance. It causes delays and cost overrun. In this research, SOS-NN-LSTM is required to establish the estimate schedule to completion (ESTC) and estimate cost to completion (ECTC) prediction model based on time now performance. Then, the prediction model will be integrated with MOSOS to obtain the optimal prediction value. The integration is needed because there is no direct equation to calculate the ESTC and ECTC. The Pareto curve identified based on the prediction values of MOSOS. The Pareto curve is used to determine the optimal trade-off between project duration and project cost. Then, the indifference curve is used to solve the trade-off problem between estimate schedule at completion (ESAC) dan estimate cost at completion (ECAC) which give the decision-maker preference.
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Dada, Martin Oloruntobi. "The influence of project team relationships on cost growth." Journal of Financial Management of Property and Construction 19, no. 1 (April 7, 2014): 76–94. http://dx.doi.org/10.1108/jfmpc-02-2013-0004.
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Purpose – Using projects executed with both traditional and integrated procurement methods, the study sought to investigate relationships that exist among project participants and the influence of those relationships on cost growth. The paper aims to discuss these issues. Design/methodology/approach – Questionnaires were administered among 274 construction projects located in 12 states including the Federal Capital Territory of Nigeria. Responses were obtained from 96 projects. Data were subjected to both descriptive and inferential analyses. Findings – In terms of cordiality, relationships between client and contractors ranked highest, while those among in-house project teams ranked lowest. Cost growth or cost overrun is significantly correlated with client-contractor relationship, consultant-contractor relationship, client-consultant-contractor relationship and in-house team relationships. No association between procurement method and cost growth was found. Research limitations/implications – The limitation of generalizability of results due to the sampling method used is acknowledged. One implication of the findings is that in the context of this research, any explanation for cost growth has to be found outside procurement methods. Practical implications – Findings may assist project participants on variables to consider in anticipating, preventing or managing cost growth in building construction projects, beyond formularization of contracts and structures. Originality/value – The research has uniquely investigated the association between intangible project team relationships and tangible variable of cost growth.
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Shehu, Zayyana, Intan Rohani Endut, Akintola Akintoye, and Gary D. Holt. "Cost overrun in the Malaysian construction industry projects: A deeper insight." International Journal of Project Management 32, no. 8 (November 2014): 1471–80. http://dx.doi.org/10.1016/j.ijproman.2014.04.004.
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Pandit, Devanshu, Sanjay Yadav, and Sardar Vallabhbhai. "Factors affecting efficient construction project design development: A perspective from India." International Journal of Construction Supply Chain Management 5, no. 2 (December 31, 2015): 52–67. http://dx.doi.org/10.14424/ijcscm502015-52-67.
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nternationally projects exhibit time and cost overrun. It is observed that problems during design development contribute significantly to delays. In India, projects undertaken by government were largely planned and designed by departmental planners and engineers. However, after globalization, projects have increased in number resulting in design outsourcing, but with attendant challenges. The paper is aimed at identifying and analysing factors in the design development phase that can have impact on project success. 30 factors related to design development were identified through two separate brainstorming sessions. A questionnaire was then administered to determine importance ranking of these factors. Relative importance index (RII) was used to prioritise these factors. Top ten factors in design development identified using RII include structural design parameters, soil investigations, design quality control, topographic survey, and architectural design parameters. The results can help firms improve their design development practices by prioritising activities that could have more impact on project performance.
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Subramani, T., and P. Sivakumar. "Analysis Cost Overruns, Delays and Risk Involved in Construction Management Using Primavera." International Journal of Engineering & Technology 7, no. 3.10 (July 15, 2018): 160. http://dx.doi.org/10.14419/ijet.v7i3.10.15651.
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Construction industry is taken into consideration as one of the maximum crucial industries in India. These phenomena may additionally have an effect on the development of construction industry in India. In addition to may additionally expose many establishments of construction to be destroyed. Delays in addition to disruptions are sources of capacity risks that studies are looking into techniques to manipulate along with technical, social, monetary, felony, economic, useful resource, creation and commercial. To evaluate the reasons of delays and conflicts are due to: layout modifications, delays in price to contractors, facts delays, investment troubles, bad challenge management, compensation problems and disagreement at the valuation of labor accomplished. On the other hand, time overrun, cost overrun, bad social effect, idling assets and disputes are the principle outcomes of delays and disruptions. The observe concludes the reasons of delays and disruptions and their outcomes placed construction projects at extremely great risk that have an impact on their performance the use of primavera.
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Ghodoosi, Farzad, Ashutosh Bagchi, M. Reza Hosseini, Tatjana Vilutienė, and Mehran Zeynalian. "ENHANCEMENT OF BID DECISION-MAKING IN CONSTRUCTION PROJECTS: A RELIABILITY ANALYSIS APPROACH." JOURNAL OF CIVIL ENGINEERING AND MANAGEMENT 27, no. 3 (February 26, 2021): 149–61. http://dx.doi.org/10.3846/jcem.2021.14344.
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Various risks significantly influence pricing of bids and a wide range of factors impact bid pricing risks. Of these, client’s reputation and the record of projects owned by a client have vital contribution on the issue. Current practices however fail to capture the impacts of client-related factors. There is a need for developing a practical quantitative approach, which enables estimators to process bid risk allocation easily. Through reliability analysis, the developed method proposed in this study enables practitioners to make informed bid/no-bid decisions based on estimating the probabilities of schedule and cost overruns. Estimating the probability of project failure enables estimators to quantify the risk element of bid price. In addition, schedule and cost overrun cumulative probability distributions can be used to estimate the expected value of these variables. The practicability of this proposed method is tested by empirical data obtained from 40 university construction projects of one client, for estimating the bid price of a low-rise building. For researchers, findings provide illuminating insight into the potential of using reliability analysis as a valuable tool for bid decision-making practices. So too, the proposed method offers a blueprint for estimating and calculating time and contingency – and managing associated risks – in planning construction projects. The contribution of this study for the world of practice lies in providing a simple, rapid and cost-effective method for bid decision-making processes.
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Ojo, Stephen Okunlola, Omotayo Aina, and Aderemi Yakeen Adeyemi. "A COMPARATIVE ANALYSIS OF THE PERFORMANCE OF TRADITIONAL CONTRACTING AND DESIGN-BUILD PROCUREMENTS ON CLIENT OBJECTIVES IN NIGERIA / TRADICINIŲ STATYBOS RANGOS IR PROJEKTAVIMO BEI STATYBOS PIRKIMŲ VYKDYMO, ATSIŽVELGIANT Į UŽSAKOVO TIKSLUS, LYGINAMOJI ANALIZĖ NIGERIJOJE." Journal of Civil Engineering and Management 17, no. 2 (July 12, 2011): 227–33. http://dx.doi.org/10.3846/13923730.2011.574449.
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Client objectives in a building project are to build within the budget and estimated construction period and being satisfied with the quality of the project. The ability of the procurement methods in achieving these objectives does influence the client to choose any to implement the project. The performance of two of such procurement methods: the traditional contracting and design-build against client objectives were determined using data set of 53 traditional contracts and 15 design-build projects gathered through a questionnaire survey administered unto respondents in three locations in Nigeria. Time overrun, cost overrun and clients’ satisfaction with quality standard were used as basis for comparison. Analysis showed that, the mean cost overrun, and time overrun for design-build were 21.4% and 36.8% respectively as compared with 42.6% and 135.6% for traditional contracting projects. As for quality standard, 78% of design-build clients were satisfied with their projects as compared with 51% for traditional contracting. The overall conclusion is that both methods involve overrun but design-build performed better. Santrauka Užsakovo, vykdančio statybos projektą tikslai – pastatyti statini neviršijant numatyto biudžeto, statybos trukmės ir būti patenkintam projekto kokybe. Pirkimų metodų galimybė pasiekti šiuos tikslus veikia užsakovo sprendimą kurį iš šių metodų pasirinkti ir igyvendinti. Naudojant 53 tradicinių statybos rangos sutarčių ir 15 projektavimo bei statybos sutarčiųduomenis, surinktus apklausų būdu trijuose Nigerijos regionuose, buvo nustatyti du statybos darbų pirkimo vykdymo bū- dai: tradicinis statybos darbų pirkimas ir projektavimo bei statybos pirkimas, atsižvelgiant į užsakovo tikslus. Statybos trukmės viršijimas, kainos viršijimas, pasitenkinimas atliktų darbų kokybe buvo naudojami kaip palyginimų pagrindas. Atlikta analizė parodė, kad vidutinis trukmės ir kainos viršijimas projektavimo ir statybos sutartyse buvo atitinkamai21,4% ir 36,8%, o tradicinėse statybos rangos sutartyse – 42,6% ir 135,6%. 78% projektavimo bei statybos užsakovųbuvo patenkinti atliktų darbų kokybe, o darbus vykdant pagal tradicines sutartis, patenkintųjųdarbų kokybe buvo 51%. Bendra išvada yra ta, kad abiem metodais buvo viršyta trukmė ir kaina, bet taikant projektavimo bei statybos metodą šie rodikliai yra geresni.
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Kayastha, Gyanendra Prasad. "Importance of Contract Administration for Timely Construction of Hydropower Projects without Disputes." Hydro Nepal: Journal of Water, Energy and Environment 14 (October 16, 2014): 49–51. http://dx.doi.org/10.3126/hn.v14i0.11265.
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Most of the large hydropower projects in the region have been behind schedule than agreed in the contracts. Such delays besides project cost overrun cause direct economic loss to the countries in the form of interest costs, loss of energy revenues and loss in industrial production due to shortage of power. With delays, the Contractor finds ways for claim for additional time and cost. Such a situation may be the result of poor contract administration & management skills. Therefore, a fair and just administration of the contract is key to the successful performance of the contract on time, with respect to both budget and quality with minimum dispute events.DOI: http://dx.doi.org/10.3126/hn.v14i0.11265HYDRO Nepal JournalJournal of Water, Energy and EnvironmentVolume: 14, 2014, JanuaryPage: 49-51
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Omotayo, Temitope, Bankole Awuzie, Temitope Egbelakin, Lovelin Obi, and Mercy Ogunnusi. "AHP-Systems Thinking Analyses for Kaizen Costing Implementation in the Construction Industry." Buildings 10, no. 12 (December 5, 2020): 230. http://dx.doi.org/10.3390/buildings10120230.
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The incessant reportage of cost overruns and abandoned projects in contemporary literature have accentuated the need for a re-examination of the nature of the cost management strategies deployed to these projects. This study explores the potential of kaizen costing strategy to engender effective cost management within construction project delivery systems in developing countries. Data collected during this study were analysed using the analytic hierarchy process (AHP) and systems thinking approaches to determine the criticality of the factors influencing the effective implementation of kaizen costing. Seven (7) archetypes leading to final causal loop diagram identified the incorporation of the plan–do–check–act approach to project and cost planning, the budgeting system of the construction companies, overhead cost reduction during construction and the overall procurement process. Executing these archetypes will potentially reduce high overhead costs, project cost and time overruns, as well as enhance construction industry sector growth policies and construction organisation corporate governance.
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Durgalakshmi, S., and K. Mahendran. "Sequence of residential building construction in 99 days." International Journal of Engineering & Technology 7, no. 2.21 (April 20, 2018): 377. http://dx.doi.org/10.14419/ijet.v7i2.21.12446.
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Time management is one of the vital key factor in the project management of any construction project. Effective planning, scheduling & control of construction project resulted in the reduction of construction time, cost overrun and disputes. Not only effective planning, but also proper organization & sufficient flow of resources to a project can automatically achieve a good result when preliminary works has been done for each & every activity. The study area mainly focuses on the execution of work as it is scheduled before the commencement of construction. This paper describes the sequence of residential building construction (G+2) in 99 days has been executed as a real time project and achieved the completion in 99 days. For normal construction of (G+2) may be completed in 180days, but this project completed in 99 days by using the technique called Task Based Activity Execution (TBAE) to the labours. During execution, delays are observed and overcome by using the preliminary works for the next activity. The sequence of construction discussed here will definitely enhance the project planning skills for the forthcoming project.
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Pilger, Jackson Dullius, Ênio Leandro Machado, Adriane de Assis Lawisch-Rodriguez, Ana Letícia Zappe, and Diosnel Antonio Rodriguez-Lopez. "Environmental impacts and cost overrun derived from adjustments of a road construction project setting." Journal of Cleaner Production 256 (May 2020): 120731. http://dx.doi.org/10.1016/j.jclepro.2020.120731.
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Oğuzhan Yavuz Bayraktar. "Risk management in construction sector." World Journal of Advanced Research and Reviews 8, no. 2 (November 30, 2020): 237–43. http://dx.doi.org/10.30574/wjarr.2020.5.2.0433.
Full textAbstract:
The major requirement of every construction project is meeting client’s need of cost, quality and time. However, the construction industry is overwhelmed with risks more than any other industry due to the fact that they are present in every activity from design to completion. These risks need to be controlled early or face the possibility of cost overruns, time delays and poor quality work leading to displeasure of client and public. Although risk management in construction projects is a very important issue in terms of the firms operating in the construction sector, it has not yet gained clarity and prevalence in our country. Within the scope of this research, the aim of this research is to introduce the risk management system as a concept and to classify the risk in construction projects and to demonstrate the risk management techniques. Risk management system is a cyclic process. In the monitoring and control phase of applied risk responding strategies, some of the risks will be eliminated or reduced, some of unforeseen risks will appear and analysis steps will be realized again. At the end of the project, determination of to what degree project aims and targets have been reached and documentation of risk management system after evaluation regarding to the project will enable the company to use project risk management system more effectively and usefully in the projects undertaken later. Due to construction activities, processes, environment and organization’s structures, construction industry and the clients are broadly in relation with high risk degrees. Therefore, it is highly important for our country’s firms in construction industry to give necessary significance to project risk management idea and system and to consider them as a basic function of the projects for permanence of their enterprise existence.
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Oğuzhan Yavuz Bayraktar. "Risk management in construction sector." World Journal of Advanced Research and Reviews 8, no. 2 (November 30, 2020): 237–43. http://dx.doi.org/10.30574/wjarr.2020.8.2.0433.
Full textAbstract:
The major requirement of every construction project is meeting client’s need of cost, quality and time. However, the construction industry is overwhelmed with risks more than any other industry due to the fact that they are present in every activity from design to completion. These risks need to be controlled early or face the possibility of cost overruns, time delays and poor quality work leading to displeasure of client and public. Although risk management in construction projects is a very important issue in terms of the firms operating in the construction sector, it has not yet gained clarity and prevalence in our country. Within the scope of this research, the aim of this research is to introduce the risk management system as a concept and to classify the risk in construction projects and to demonstrate the risk management techniques. Risk management system is a cyclic process. In the monitoring and control phase of applied risk responding strategies, some of the risks will be eliminated or reduced, some of unforeseen risks will appear and analysis steps will be realized again. At the end of the project, determination of to what degree project aims and targets have been reached and documentation of risk management system after evaluation regarding to the project will enable the company to use project risk management system more effectively and usefully in the projects undertaken later. Due to construction activities, processes, environment and organization’s structures, construction industry and the clients are broadly in relation with high risk degrees. Therefore, it is highly important for our country’s firms in construction industry to give necessary significance to project risk management idea and system and to consider them as a basic function of the projects for permanence of their enterprise existence.