PREDICTING COST CONTINGENCY FOR PRIVATE PROJECTS: CASE STUDY IN VIETNAM

2020 ◽  
Vol 43 (01) ◽  
Author(s):  
NGUYEN TUAN KIET ◽  
SOO-YONG KIM ◽  
VAN TRUONG LUU ◽  
LE VAN HUNG ◽  
LE HUU DAT
Keyword(s):  
Cost Estimation ◽  
Construction Projects ◽  
Project Performance ◽  
Project Managers ◽  
Performance Information ◽  
Quality Cost ◽  
Factors Affecting ◽  
Forecasting Method ◽  
The Cost

Actual cost in construction projects has tended to exceed the project budgets. Thus, cost contingency from the initial of the project is the significant budget to complete project activities. Cost contingency is an important element of  cost estimation to protect project stakeholders such as owners, contractors, and architects from the risks of the project. This paper reviewed the previous studies to find the factors affecting cost contingency and proposed a regression model to predict the cost contingency for private projects in Vietnam. Through industry survey, project performance information from a total of 48 private projects in Vietnam was gathered. The research also compared with other studies to have an overview about cost contingency predicting methods. The key benefit of this research is that the project managers can use this model as another forecasting method to get a better quality cost management. The further research can be focused on developing the model for other project types in Vietnam.

A novel model for risk management of outsourced construction projects using decision-making methods: a case study

2020 ◽  
Vol 10 (2) ◽  
pp. 97-123 ◽  
Author(s):  
Amin Mahmoudi ◽  
Mehdi Abbasi ◽  
Xiaopeng Deng ◽  
Muhammad Ikram ◽  
Salman Yeganeh
Keyword(s):  
Decision Making ◽  
Construction Projects ◽  
Project Managers ◽  
Analytic Hierarchy ◽  
Suitable Alternative ◽  
Content Type ◽  
Proposed Model ◽  
The Cost ◽  
First Time

PurposeSelecting a suitable contract to outsource construction projects is an ongoing concern for project managers and organizational directors. This study aims to propose a comprehensive model to manage the risks of outsourced construction project contracts.Design/methodology/approachTo employ the proposed model, firstly, the types of contracts and risks in the organization should be identified, then, to prioritize the contracts, the identified risks are considered as criteria. After receiving the experts' opinions, the best–worst method (BWM) integrated with grey relation analysis (GRA) method was used to prioritize the contracts. BWM and GRA are multi-criteria decision-making methods with different approaches and applications. In the current study, BWM has been employed to calculate the weights of criteria because it has better performance than other methods such as the analytic hierarchy process (AHP). After calculating the weights of criteria, the GRA method has been utilized for ranking the alternatives.FindingsAccording to the results obtained from the case study, the cost plus award fee contract is the most suitable alternative for outsourcing construction projects. The proposed methodology can be practically applied through different types of the projects such as construction or “engineering, procurement and construction”.Originality/valueTo the best of our knowledge, this is the first time a conceptual model has been proposed to select an appropriate contract for construction projects. Also, for the first time, the BWM integrated with GRA method has been used to prioritize project contracts based on the potential risks. The proposed model can contribute to project managers for selecting a suitable contract with the least risk in construction projects.

scholarly journals Analyzing Cost and Schedule Growths of Road Construction Projects, Considering Project Characteristics

2021 ◽  
Vol 13 (24) ◽  
pp. 13694
Author(s):  
Kang-Wook Lee ◽  
Kyong-Hoon Kim
Keyword(s):  
Construction Projects ◽  
National Level ◽  
Road Construction ◽  
Project Performance ◽  
Project Planning ◽  
Future Research ◽  
Socioeconomic Impacts ◽  
Factors Affecting ◽  
Project Characteristics ◽  
The Cost

The development of road infrastructure is closely related to national competitiveness and presents significant socioeconomic impacts. However, road construction involves a large budget and is vulnerable to political, economic, social, and project-specific risks, which often result in cost overruns and schedule delays. Assessing the gap between the final performance and the planned performance, and providing feedback to similar projects in the future is essential for successful project planning and management. The aim of this study is to empirically analyze the cost and schedule growth of road construction projects, considering project characteristics. Using the national-level project performance data, the primary goal is to answer, “Do project characteristics influence the road project performance? If so, how different is the performance because of the project characteristics?” To this end, this study analyzes the cost and schedule growth of 423 road construction projects, considering five project characteristics: facility type, construction type, bid type, contract type, and project size. Non-parametric tests (the Mann–Whitney U test and the Kruskal–Wallis test) are used to analyze the differences between sample groups. The results demonstrate (1) better management of the performance of the highway when compared to the national and provincial roads; (2) higher schedule growth of the expansion and renovation than that of the new construction; (3) lower cost growth of the design-build method (turnkey and alternative) than the design-bid-build methods (qualification examination and lowest price); and (4) relatively larger cost and schedule growth for projects over $50 million than those of smaller projects. These results present empirical references from the Korean construction industry that can help construction-related entities (clients, design consultants, and contractors) to estimate and manage the cost and schedule buffers of future projects by considering different project characteristics. Discussions and suggestions connected with the findings are also provided. Future research will continue to shed light on the critical factors affecting the cost and schedule growth.

scholarly journals Factors Affecting Cost Overrun in Construction Projects

2019 ◽  
Vol 9 (2) ◽  
pp. 4831-4833
Keyword(s):  
Construction Projects ◽  
Basic Problem ◽  
Cost Overrun ◽  
Quality Cost ◽  
Factors Affecting ◽  
Critical Elements ◽  
Key Factor ◽  
The Common ◽  
The Cost

Cost overrun is observed as one of the common and basic problem which took place in different construction projects and affects its progress. Construction cost can be considered as the key factor to tell whether a project is successful or not. The cost of any project may be within, under or overrun. Among these cost overrun affects the project progress directly. Since it affects profit of the contractor, financial problems, delay in completion time, compromise on the material quality. Cost overrun can push the particular company to bankruptcy. Therefore various factors influencing the cost overrun must be thoroughly analyzed in order to reduce the cost overrun in such projects without compromising the quality of the project. The need of this research is to recognize the critical elements that lead to cost overrun in such projects.

Factors affecting the delivery of optimum health and safety on construction projects during the covid-19 pandemic in Zimbabwe

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Benviolent Chigara ◽  
Tirivavi Moyo
Keyword(s):  
Factor Analysis ◽  
Construction Projects ◽  
Health And Safety ◽  
Project Managers ◽  
Small Sample ◽  
Related Factors ◽  
Content Type ◽  
Factors Affecting ◽  
Related Risk ◽  
Monitoring And Enforcement

Purpose The purpose of this study was to investigate the perceptions of construction professionals relative to factors that affect the delivery of optimum health and safety (H&S) on construction projects during the COVID-19 pandemic. Design/methodology/approach The study adopted a quantitative design which entailed the distribution of a web-based questionnaire among construction professionals, namely, architects, construction/project managers, engineers, H&S managers and quantity surveyors working for contractors and construction consultants in Zimbabwe. The data were analysed with descriptive and inferential statistics. Factor analysis was used to reveal interrelated significant sets of factors affecting the delivery of optimum H&S. Findings Factor analysis revealed nine components/factors: change and innovation-related, monitoring and enforcement-related, production-related, access to information and health service-related, on-site facilities and welfare-related, risk assessment and mitigation-related, job security and funding-related, cost-related and COVID-19 risk perception-related factors as the significant factors affecting the delivery of optimum H&S during the COVID-19 pandemic in Zimbabwe. Research limitations/implications The results highlighted the need for social dialogue among construction stakeholders to support initiatives that will enhance the delivery of H&S on construction projects. Construction stakeholders may find the results useful in highlighting the areas that need improvement to protect workers’ H&S during the pandemic. However, the small sample limits the generalisability of the results to construction sectors in other regions. Originality/value The study investigated factors affecting the delivery of optimum H&S during the COVID-19 to inform interventions to enhance H&S.

scholarly journals Method of Assessing the Risk of Implementing Railway Investments in Terms of the Cost of Their Implementation

2021 ◽  
Vol 13 (23) ◽  
pp. 13085
Author(s):  
Jan Kowalski ◽  
Mieczysław Połoński ◽  
Marzena Lendo-Siwicka ◽  
Roman Trach ◽  
Grzegorz Wrzesiński
Keyword(s):  
Construction Projects ◽  
Original Method ◽  
Project Managers ◽  
Simple Method ◽  
Construction Companies ◽  
Risk Forecasting ◽  
Specific Object ◽  
Effective Cost ◽  
The Cost ◽  
The Impact

Exceeding the approved budget is often an integral part of the implementation of construction projects, especially those where unforeseen threats may occur. Therefore, each construction investment should contain elements of risk forecasting, mainly in terms of the cost of its implementation. Only a small number of institutions apply effective cost control methods, taking into account the specifics of a given industry. Especially small construction companies that participate in the structure of the implementation of large construction projects as subcontractors. The article presents a method by which it is possible to determine, with certain probability, the final cost of railway construction investments carried out in Poland. The method was based on a reliable database of risk factors published in sources. In this article, the main presumptions of the original method are presented, which take into account the impact of potential, previously recognized, risks specific to railway investments, and enable project managers to relate them to the conditions where the implementation of a specific object is planned. The authors assumed that such a relatively simple method, supported by a suitable computational program, would encourage teams that plan to implement railway projects to use it and increase the credibility of their schedules.

scholarly journals ANALISIS KETERLAMBATAN PROYEK SERTA DAMPAKNYA TERHADAP BIAYA DAN WAKTU PELAKSANAAN PROYEK

2019 ◽  
Vol 5 (1) ◽  
pp. 13-19
Author(s):  
Fitri Nur Kharina ◽  
Kusno Adi Sambowo
Keyword(s):  
Construction Projects ◽  
Construction Project ◽  
Project Performance ◽  
Project Work ◽  
Earned Value ◽  
Time Period ◽  
Review Period ◽  
The Difference ◽  
The Cost ◽  
The Impact

Construction projects in all regions continues to be developed for the creation of facilities that can be utilized by the community. One of them is the construction of apartments which are now being intensively carried out to meet residential needs for the community. Making a construction project plan always refers to estimates that exist at the time development plan is made, therefore problems can arise if there is a discrepancy between the plans that have been made and the actual reality. So the impact that often occurs is the delay in the time of project implementation which can also be accompanied by an increase in the cost of implementing the project. In the construction project of Cinere Terrace Suites Apartemen & Citywalk, Jakarta there was a delay resulting in a late payment of monthly bill progress by the owner. Based on the above reasons, this research was conducted to find out how the project performance was seen from the cost and time period of the review period. how is the estimated cost and time to complete the overall project work. The method used in the analysis of this study is the Earned Value Method. Based on the results of the analysis carried out for 29 weeks the project performance on schedule has been delayed and cost shows a positive value. For the estimated completion time of the project there is an increase in time whose duration increases from the planned 98 weeks or 685 days to 109,624 weeks or 768 days. While the estimated cost of completing the project from the results of the analysis obtained a value of Rp. 270,147,448,569.16 smaller than the planned cost of Rp. 315,272,727,272.73. With the difference VAC of Rp. 45,125,278,703.57 this shows that there are benefits obtained by the contractor.

scholarly journals ESTIMATING CAPITAL AND OPERATIONAL COSTS OF BACKHOE SHOVELS

2012 ◽  
Vol 18 (3) ◽  
pp. 378-385 ◽  
Author(s):  
Ahmad Reza Sayadi ◽  
Ali Lashgari ◽  
Mohammad Majid Fouladgar ◽  
Miroslaw J. Skibniewski
Keyword(s):  
Feasibility Study ◽  
Cost Estimation ◽  
Construction Projects ◽  
Cost Model ◽  
Operating Cost ◽  
Principal Component ◽  
Feasibility Studies ◽  
Project Managers ◽  
Cost Models ◽  
Optimum Type

Material loading is one of the most critical operations in earthmoving projects. A number of different equipment is available for loading operations. Project managers should consider different technical and economic issues at the feasibility study stage and try to select the optimum type and size of equipment fleet, regarding the production needs and project specifications. The backhoe shovel is very popular for digging, loading and flattening tasks. Adequate cost estimation is one of the most critical tasks in feasibility studies of equipment fleet selection. This paper presents two different cost models for the preliminary and detailed feasibility study stages. These models estimate the capital and operating cost of backhoe shovels using uni-variable exponential regression (UVER) as well as multi-variable linear regression (MVLR), based on principal component analysis. The UVER cost model is suitable for quick cost estimation at the early stages of project evaluation, while the MVLR cost function, which is more detailed, can be useful for the feasibility study stage. Independent variables of MVLR include bucket size, digging depth, dump height, weight and power. Model evaluations show that these functions could be a credible tool for cost estimations in prefeasibility and feasibility studies of mining and construction projects.

Design and Analysis of Manufacturing Component Under Sustainability Considerations: A Case Study of Electronic and Mechanical Indexing Head for Milling Operation

2018 ◽  
Author(s):  
Nand K. Jha ◽  
Mahmoud M. Amin
Keyword(s):  
Finite Element Analysis ◽  
Finite Element ◽  
Cost Estimation ◽  
Minimum Energy ◽  
Solid Modeling ◽  
Milling Machine ◽  
Element Analysis ◽  
Milling Operation ◽  
The Cost

An attempt has been made to design and analyze Indexing Head a very important component in milling operation under sustainability considerations. The design of each component of indexing head is presented along with solid modeling and finite element analysis. The cost estimation for indexing head for milling operation is also presented. The design and finite element analysis of indexing head should be utilized by manufacturers of this very useful device in milling operation. It is used for cutting gears, spirals, splines, etc. The cost estimated of the manufactured indexing head shows it to be within reasonable limits of market. Finite element analysis of each component is safe. An electronic indexing is suggested as an improvement over the mechanical indexing head. A schematic of electronic indexing is presented. The electronic indexing head can be used with milling machine not provided with indexing head and will be portable. The minimum energy needed to manufacture the indexing head is also estimated.

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