scholarly journals Predicting buildings construction cost overruns on the basis of cost overruns structure

2020 ◽  
Vol 29 (3) ◽  
pp. 366-376
Author(s):  
Diana Car-Pušić ◽  
Ivan Marović ◽  
Marko Mlađen ◽  
Ksenija Tijanić
Keyword(s):  
Construction Projects ◽  
Cost Model ◽  
Computing Methods ◽  
Construction Costs ◽  
Cost Overruns ◽  
Change Orders ◽  
Additional Work ◽  
New Construction ◽  
Soft Computing Methods ◽  
The Republic

In construction practice, contractually agreed costs are often exceeded, which interferes with the sustainable realization of construction projects. The research described in this paper covers 24 new construction, renovation and reconstruction projects in the Republic of Croatia realized in the years 2006 to 2017, in order to analyse the occurrence of cost overruns more precisely with regard to the source of the overruns. It was found that additional work is the main source of cost overruns: firstly, additional work as a result of the client’s change orders and then unforeseen construction work as a result of unforeseen circumstances. As for the additional works, they are carried out at the client’s request and are not necessary for the safety and stability of the building. Using linear regression and “soft computing” methods, the possibility of modelling the relationship between contractually agreed and realized construction costs with satisfactory accuracy was tested. The model with the values of the natural logarithms of the variables, modelled according to the time–cost model of Bromilow, proved to be of the highest accuracy.

scholarly journals Exploring the Components of Cost on Construction Projects

2018 ◽  
Vol 2 (2) ◽  
pp. 42-50
Author(s):  
Abimbola Windapo ◽  
Alireza Moghayedi ◽  
David Oliphant ◽  
AbdulRauf Adediran
Keyword(s):  
South Africa ◽  
Construction Projects ◽  
Resource Planning ◽  
Construction Cost ◽  
Research Approach ◽  
Construction Work ◽  
Construction Costs ◽  
Cost Overruns ◽  
Planning And Control ◽  
Electrical Installation

This study examines the components of construction projects and whether there are construction resources that are the key project constituents. The rationale for the study stems from the unexplained assumptions regarding the primary components responsible for increases in construction costs in South Africa, as South Africa lacks a national building cost database. The study adopts a qualitative research approach that employs a case studies of six new and six refurbished projects in obtaining the necessary data for use in answering the study objectives. The study found that the primary cost constituents of construction projects are materials and sub-contracted work, accounting for 63.69% and 74.6% of the value of renovation and new construction work respectively and on the average, the major materials by value are reinforcement, cement and filling, while Electrical Installation is the primary sub-contracting item by value. Based on these findings, the study concludes that the future levels of construction work can be predicted knowing levels of specialist sub-contractor costs and building material costs. The study recommends that the sub-contractor and material inputs into construction projects are carefully managed, both on the projects and the construction industry, to limit construction cost increases and cost overruns on projects. The study contributes to the literature on resource planning and control in construction. Keywords: Cement, Construction Cost, Electrical Installation, Reinforcement, Specialist Sub-contractor.

scholarly journals Building Information Modelling Technology in Mitigating Cost Overruns and change orders in Construction Projects

2021 ◽  
Vol 4 (1) ◽  
pp. 50-64
Author(s):  
Ja’far A. Aldiabat Al-Btoosh
Keyword(s):  
Construction Industry ◽  
Cost Estimation ◽  
Construction Projects ◽  
Information Modeling ◽  
Cost Overruns ◽  
Change Orders ◽  
Significant Difference ◽  
Project Costs ◽  
Building Information ◽  
And Control

Variation order (VO) is one of the main issues faced by the construction industry in Jordan. Many researchers had investigated on the causes of VO and proposed procedures to minimize and control this issue; however, the VO is affecting the construction industry badly even at moment. Building Information Modeling (BIM) is a powerful management system that can make a significant difference in the project costs. However, BIM has not been examined as a tool to minimize the VO in Jordan. The main target of this study is to utilize BIM applications in reducing the effect of VO on the governmental projects in Jordan. In order to achieve this target, the researcher has designed a questionnaire to gather data related to VO causes and the BIM capability to solve this problem. The data collected from the questionnaires were analyzed statistically. The result from the analysis found that the consultant initiated the highest VO of 50% followed by the clients and the contractors of 20% and 10% unforeseen variation respectively. Moreover, it is found that BIM Design Applications, Facility Operations Simulation, Exploration Design Scenarios, BIM Design Detection and BIM Quantity Take-off and Cost Estimation were significantly capable of minimizing VO. The results show positive relationship with the application of BIM in minimizing VO in the construction industry in Jordan. © 2018. JASET, International Scholars and Researchers Association

scholarly journals Exploring the Causes of Design Changes in Building Construction Projects: An Interpretive Structural Modeling Approach

2021 ◽  
Vol 13 (17) ◽  
pp. 9578
Author(s):  
Shahab Shoar ◽  
Nicholas Chileshe
Keyword(s):  
Construction Projects ◽  
Structural Modeling ◽  
Project Managers ◽  
Building Construction ◽  
Value Engineering ◽  
Interpretive Structural Modeling ◽  
Change Orders ◽  
Construction Methods ◽  
Design Changes ◽  
New Construction

The purpose of this study is to investigate the mutual interactions between the causes of design changes using Interpretive Structural Modeling (ISM) and to classify the causes using the “Matrice d’Impacts Croisés Multiplication Appliquée à un Classement” MICMAC technique. This study further identifies and proposes strategies to mitigate design change occurrence and map them onto the identified connections between the causes. To achieve these goals, critical causes of design changes were identified through a comprehensive literature review; 23 key causes were then refined according to the opinions of relevant experts involved in the Iranian building construction sector. Stakeholders associated with each cause and the management areas from which causes arise were also considered. The factors “Unfamiliarity with new construction methods”, “Design errors”, “Value engineering”, “Scope uncertainty”, “Change orders”, and “Constructability ignored in the design phase”, which are highly influenced by other factors, emerged at the highest level of the ISM diagram, and “Clients’ attitudes and experience” as the main root cause of design changes at the bottom of the diagram. The MICMAC technique results showed that consultant-related causes significantly influence other causes, and policy and client-related causes have a feedback effect on the whole system. The findings of this study provide a better insight into how various causes of design changes are connected to one another and can ultimately assist project managers of different parties, even in other countries, to choose influential strategies to mitigate design changes in building construction projects.

scholarly journals Investigation of Contemporary Performance Measurement Systems for Production Management of Renovation Projects

2014 ◽  
Vol 2014 ◽  
pp. 1-9 ◽  
Author(s):  
Yash Singh ◽  
Tariq Abdelhamid ◽  
Tim Mrozowski ◽  
Mohamed A. El-Gafy
Keyword(s):  
Performance Measurement ◽  
Construction Projects ◽  
Production Management ◽  
State University ◽  
Cost Overruns ◽  
Measurement Systems ◽  
Construction Companies ◽  
New Construction ◽  
Performance Measurement Systems ◽  
Framework Development

Renovation projects exhibit complex characteristics due to the presence of constraints that lead to cost and schedule overruns. Numerous researchers have concluded that the performance of renovation projects is typically lower than that of new construction projects. This paper discusses the initial phases of a research conducted at Michigan State University, which focused on developing a framework for production management of renovation projects. The emphasis of this paper is on the findings from literature review and interviews, pertinent to performance measurement in renovation projects that led to the framework development. However, the framework development and the framework itself have not been discussed. This paper primarily addresses two questions: (1) what are the complexities of renovation projects that lead to underperformance in cost, time, and quality? and (2) what are the limitations of state-of-the-art construction performance measurement systems for managing production in renovation projects? Interviews of 10 construction companies were conducted to identify current practices of production management in renovation projects. This research observed a lack of a formal production management process in renovation projects, with a limited use of performance measurement systems. The research identified essential attributes for avoiding schedule and cost overruns on renovation projects.

A preliminary study of the factors affecting the cost escalation of construction projects

2000 ◽  
Vol 27 (1) ◽  
pp. 73-83 ◽  
Author(s):  
Karla Knight ◽  
Aminah Robinson Fayek
Keyword(s):  
Fuzzy Logic ◽  
Construction Projects ◽  
Labour Productivity ◽  
Membership Functions ◽  
Monitoring And Control ◽  
Construction Costs ◽  
Cost Overruns ◽  
Factors Affecting ◽  
Definition Of ◽  
The Cost

An interview survey of Alberta-based construction contractors was conducted in July and August 1998. The purpose of this survey was to elicit information on the factors that cause unanticipated project cost escalation during construction, from the contractor's perspective. This paper presents the findings of this survey and a proposed method of modeling the factors identified. The majority of factors identified impact labour productivity, which is a major source of cost overruns. A combination of subjective, objective, and secondary indicators are used to measure these factors and to assess their impact on project performance. The main conclusion of this survey is that many of the factors affecting the cost of construction are evaluated in subjective and imprecise terms and are difficult to quantify. This paper presents a method of modeling these factors using fuzzy membership functions, which capture the imprecision and subjectivity associated with the measurement of these factors. It discusses a basis for the definition of these membership functions and a method of calibrating these functions to make them more widely applicable to suit different contexts. These membership functions are being incorporated in a set of expert rules, which reason about the factors affecting costs, their impact on the project, and the appropriate corrective actions. These expert rules are being developed as part of a fuzzy expert system for construction project monitoring and control. A method of calibrating membership functions to suit individual contexts is currently being developed, which would be a significant advancement in the area of fuzzy logic. Key words: construction, costs, expert systems, fuzzy logic, project control, survey.

CLAIMS MANAGEMENT: UNDERLYING CAUSES IN MEGA-CONSTRUCTION PROJECTS

2021 ◽  
Vol 8 (1) ◽  
Author(s):  
Dikeledi Matseke ◽  
Nthatisi Khatleli
Keyword(s):  
South Africa ◽  
Construction Projects ◽  
Significant Risk ◽  
Project Managers ◽  
Cost Overruns ◽  
Change Orders ◽  
Contractual Relationship ◽  
Force Majeure ◽  
Underlying Causes ◽  
Delay In Payments

Construction claims remain unavoidable in any megaproject contractual relationship and can quickly escalate to misunderstandings, disputes and litigations if not appropriately managed. Disputes pose a significant risk in hindering project progress; they are characterised by lengthy legal battles that consume substantial time and financial resources. This study identifies the causes of claims encountered by clients, contractors and consultants in transport and energy sector mega construction projects in South Africa. A semi-systematic literature review was used to identify, select and appraise existing literature on this issue. Content analysis using NVivo 12 was used to identify factors causing claims in the construction sector, particularly in MCPs. Findings of the study revealed that construction projects occurring outside of South Africa experienced a delay in payments, time and cost overruns, change orders, inadequate project and drawing specifications, natural risks or force majeure. In South Africa, delays and cost overruns (due to insufficient experience and expertise of project managers and engineers) frequent to be the causes attributable to claims.

scholarly journals Identifying the Global Performance of the Construction Industry

2016 ◽  
Vol 8 (2) ◽  
pp. 7 ◽  
Author(s):  
Alfredo Rivera ◽  
Nguyen Le ◽  
Jacob Kashiwagi ◽  
Dean Kashiwagi
Keyword(s):  
Customer Satisfaction ◽  
Construction Industry ◽  
Construction Projects ◽  
Poor Performance ◽  
Developed Countries ◽  
Construction Costs ◽  
Cost Overruns ◽  
Best Value ◽  
Project Costs ◽  
And Performance

This paper presents a literature research assessing the performance and issues of delivering construction services worldwide, by exploring reasons for delays and increased construction costs. The study shows a comparison of the performance of the construction industry between different continents and countries. Multiple research databases were looked through and performance information was taken from over 95 publications. The results reveal that although the construction industry is growing throughout the world, there are many of the same problems being experienced in delivering construction projects in developing countries and developed countries. The literature reveals that all countries and continents are experiencing the same issues. On average, 72% of projects are delayed with 38% increase in original contracted duration, also, 63% of projects experienced cost overruns with 24% increase in original contracted cost. Additionally, rework is also a factor that affects performance and accounts for 6% increase in total project costs. Customer satisfaction on projects is low, and 90% of all major issues causing non-performance are due to people. A best value approach was identified as a potential solution to overcome the poor performance on construction projects with the following results: tested over 1900 times, totaling over $6B of procured services, a 94% on time and 97% on budget, and 98% customer satisfaction.

scholarly journals Principles of space planning solutions applicable to low-rise buildings in Kesab, Syria

2020 ◽  
pp. 17-38
Author(s):  
Saoud Yara ◽  
Tatiana R. Zabalueva
Keyword(s):  
Construction Projects ◽  
Architectural Design ◽  
Design System ◽  
Mountainous Area ◽  
Single Family ◽  
Construction Costs ◽  
Space Planning ◽  
Mountain Valley ◽  
New Construction ◽  
Indoor Comfort

Introduction. Latakia Governorate, Syria, includes Kesab located in a mountainous area. Plains, that are good for construction purposes, are depleted; therefore, mountain slopes have to accommodate new construction projects. The analysis of space planning solutions, designated for single-family residential houses, was performed with regard for the terrain of Kesab. This analysis underlies the fundamental principles of the architectural solutions that take account of the following factors: the slope type/orientation, the layout of buildings in relation to the slope and access routes, the use of the “bearing floor” design system that reduces construction costs, the use of cantilever solutions for first floors, the availability of summer premises protected from overheating in the Kesab climate, the orientation of the slope towards cardinal points, and traditions of Arabic families. Principles of architectural design of single-family residential houses with account taken of the local terrain constitute the subject of this research. The objective is to develop recommendations designated for architectural solutions for single-family residential houses to be built in the mountainous environment of Kesab, to assure indoor comfort depending on the earth grade and terrain orientation towards cardinal points, and to reduce construction costs. Materials and methods. The research is based on the analysis of the Kesab terrain, the analysis of potential construction work to be performed on the slopes having different orientations, the use of the “bearing floor” structural system, the analysis of effective Syrian and Russian regulations and data sources. Results. As a result of research into a single-family residential house built with regard for the Kesab terrain in Syria, the co-authors developed design principles applicable to single-family residential houses in the areas featuring rough terrain. Conclusions. The recommendations are designated for low-rise single-family houses that have different orientations towards cardinal points in the areas that have varied earth grades like Kesab located in the mountain valley.

scholarly journals Analysis of Cost Overruns in Saudi Arabia Construction Projects: A University Case Study

2020 ◽  
Vol 10 (1) ◽  
pp. 84-101
Author(s):  
Majed Alzara ◽  
Jacob Kashiwagi ◽  
Dean Kashiwagi ◽  
Abdulrahman Al-Tassan
Keyword(s):  
Saudi Arabia ◽  
Construction Projects ◽  
Common Factor ◽  
Project Performance ◽  
University Campus ◽  
Cost Overruns ◽  
Change Orders ◽  
Public Projects ◽  
Procurement System

Public projects in Saudi Arabia have been experiencing low construction project performance for the past decade. Studies have identified the low-bid delivery method as an important factor in causing such delays. In addition, low bids for contracts have not reflected the actual project cost. A case study was conducted at a university campus in northern Saudi Arabia in which the actual project costs for four projects were examined. The study found that all four projects’ costs were higher than the original bid. In addition, a large survey was conducted of 804 classified contractors and universities representatives who identified change orders as the most common factor causing cost overruns in Saudi Arabia. Previous studies showed that some contractors aim to submit low bids for winning the competition then change orders to reduce their losses. Consequently, low bids also lead to cost overruns. In a comparison using the result of a case study and the results of the Performance Information Procurement System (PIPS), Saudi Arabia’s delivery system was identified as a potential cause of project performance issues.

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