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.

scholarly journals An Analytical Study of Critical Factors Affecting Contractor Efficiency in Construction Projects in Indian Scenario

2018 ◽  
Vol 10 (1) ◽  
pp. 1794-1802
Author(s):  
Shumank Deep ◽  
Laura Simon ◽  
Mohd Asim ◽  
Ali Rahimzadeh ◽  
Sulala Al-Hamdani
Keyword(s):  
Construction Projects ◽  
Indian Subcontinent ◽  
Uttar Pradesh ◽  
Research Approach ◽  
Snowball Sampling ◽  
Critical Factors ◽  
Cost Overruns ◽  
Factors Affecting ◽  
The Government ◽  
The Cost

Abstract Purpose: Recent studies show that lowest bidder tech­nique is mainly used in developing countries such as India to award a contract. It has been demonstrated that the lowest bid is not always the accurate one and can lead to cost overruns and time extensions amongst other prob­lems. The aim of this study was to investigate the critical factors impacting contractor’s efficiency in Indian con­struction projects. Research approach: A survey was sent to participants of construction projects awarded by the government with the lowest bidder technique in Uttar Pradesh, India. For further research, snowball sampling was used, and struc­tured interviews were conducted amongst experienced managers and engineers of these projects on both client’s and contractor’s side.Findings: It was observed that, to a greater extent, the delays were caused due to contractor’s opportunistic behaviour. The main findings are that new bidding meth­odologies are to be tested as they can lead to the choice of a more accurate and realistic bidder. In addition, subjec­tive evaluation components, such as schedule and work­force, should be reflected in contract award methods in addition to the cost criteria. Further studies should be per­formed on the choice of contract awarding methodology based on the project size and type. Originality value: The researcher’s focus was to analyze the influence of contracting methodologies and factors affecting contractor’s performance in lowest bid award project, where this is an area of least focus amongst researchers in the Indian subcontinent.

FACTORS AFFECTING COST OVERRUN IN CONSTRUCTION PROJECTS

2021 ◽  
Vol 8 (1) ◽  
Author(s):  
Mohammed Algahtany
Keyword(s):  
Saudi Arabia ◽  
Construction Projects ◽  
Cost Overrun ◽  
Cost Overruns ◽  
Factors Affecting ◽  
Public Projects ◽  
Low Performance ◽  
Major Factors ◽  
Public Construction ◽  
The Cost

Public construction projects in Saudi Arabia have been suffering from low performance for the past decade. Cost overrun is one of the most important issues in project’s performance and is nearly associated with most of public projects. The aim of this study is to identify and assess the major factors leading to cost overruns in education construction projects in the Northern Province of Saudi Arabia to minimize the risks’ effects in future projects. The research methodology started by identifying cost overrun factors through literature review, project’s documentations, and experts’ interviews. Professionals who worked at the construction projects undertook a questionnaire survey to investigate the importance of the cost overrun factors. The top factors of cost overrun were identified through the analysis of the factors’ occurrence and severity. The study main results included the top causes of cost overrun which are delay in contractors’ progress payment by client, difficulties in financing project by contractor, delays in sub-contractor’s work, additions of quantities such as excavation, backfill, and concrete works, and bid award for lowest price. The investigated risks in the study should be evaluated and mitigated in future projects to minimize their effects and enhance the industry performance.

scholarly journals THE FORMATION PROCEDURE OF THE ESTIMATED CONSTRUCTION COSTS OF ROOM FUNCTION GROUPS

2018 ◽  
pp. 315-321
Author(s):  
N. SAMAL
Keyword(s):  
Cost Estimation ◽  
Capital Investment ◽  
Construction Projects ◽  
Building Construction ◽  
Preliminary Design ◽  
Construction Costs ◽  
Investment Volume ◽  
Calculation Methodology ◽  
Definition Of ◽  
The Cost

The article is concerned with the problem of cost estimation for multifunctional construction projects on the stage of pre-investment feasibility study. For addressing issues such as the definition of capital investment unto the property assets the author considers the procedure of construction cost estimation on the base of the cost indicators of room function groups. On a research basis the author has developed the calculation methodology of the cost indicators of room function groups. Room function groups present the assembly of spatially connected facilities and communication passages which are focused on define operations functions accomplishment. There is the procedure of the application of room function groups costs for the definition of the investment volume in building construction in the phase of poorly detailed preliminary design.

scholarly journals Application Of The Work Breakdown Structure In Determining Cost Buffers In Construction Schedules

2015 ◽  
Vol 61 (1) ◽  
pp. 147-161 ◽  
Author(s):  
M. Połoński
Keyword(s):  
Construction Projects ◽  
Work Breakdown Structure ◽  
Initial Task ◽  
The Common ◽  
Definition Of ◽  
The Cost ◽  
Construction Schedules

AbstractThe paper presents methods of determining the location of cost buffers and corresponding contingency costs in the CPM schedule based on its work breakdown structure. Application of correctly located cost buffers with appropriately established reserve costs is justified by the common overrunning of scheduled costs in construction projects. Interpolated cost buffers (CB) as separate tasks have been combined with relevant summary tasks by the start–to–start (SS) relationship, whereas the time of their execution has been dynamically connected with the time of accomplishment of particular summary tasks using the “paste connection” option. Besides cost buffers linked with the group of tasks assigned to summary tasks, a definition of the cost buffer for the entire project (PCB) has been proposed, i.e. as one initial task of the entire project. Contingency costs corresponding to these buffers, depending on the data that the planner has at his disposal, can be determined using different methods, but always depend on the costs of all tasks protected by each buffer. The paper presents an exemplary schedule for a facility and the method of determining locations and cost for buffers CB and PCB, as well as their influence on the course of the curve illustrating the budgeted cost of work scheduled (BCWS). The proposed solution has been adjusted and presented with consideration of the possibilities created by the scheduling software MS Project, though its general assumptions may be implemented with application of other similar specialist tools.

A hybrid framework to model factors affecting construction labour productivity

2019 ◽  
Vol 24 (3) ◽  
pp. 630-654 ◽  
Author(s):  
Majid Parchami Jalal ◽  
Shahab Shoar
Keyword(s):  
Construction Industry ◽  
Labour Productivity ◽  
Content Type ◽  
Factors Affecting ◽  
Schedule Delay ◽  
Factors Influencing ◽  
Hybrid Framework ◽  
Novel Method ◽  
The Cost ◽  
The Impact

Purpose This paper aims to model different causal relations among factors interacting with labour productivity in order to recognize the most important factors influencing and influenced by it. Design/methodology/approach Top 60 factors affecting labour productivity were determined and grouped into 5 major groups by reviewing previous research and interviewing relevant experts. The interactions of factors were modelled using system dynamics (SD) approach. The resulting causal loop diagrams obtained from SD were then applied for identifying the most crucial factors influencing and influenced by labour productivity through the decision-making trial and evaluation laboratory (DEMATEL) method. The impact of factors on each other was finally determined based on the opinions of 63 experts selected from the Iranian construction industry. Findings The results indicated that factors such as fatigue, lack of labour motivation and lack of skill are the most influencing, and factors such as schedule delay and inflation in the cost of execution are the most influenced by labour productivity. In the end, a set of recommendations to improve construction labour productivity was also presented. Originality/value The main contribution of the study is proposing a novel method which is capable of providing insights into how causes and effects of construction labour productivity are interrelated. Furthermore, the proposed method makes this study distinct from previous research in the light of prioritizing factors and offering recommendations according to the interrelationships among factors.

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 Estimation of cost overrun in construction projects using Fuzzy Logic

2021 ◽  
Vol 23 (05) ◽  
pp. 797-805
Author(s):  
Neelakash Haloi ◽  
◽  
Tapas Goyal ◽  
Faizan Zahoor ◽  
Harsh Jain ◽  
...  
Keyword(s):  
Fuzzy Logic ◽  
Construction Projects ◽  
Cost Overrun ◽  
Time Data ◽  
Construction Companies ◽  
Five Factors ◽  
Spss Software ◽  
The Cost ◽  
The Impact ◽  
Published Research

In recent years, the impact of the construction industry on the economy of India is increasing. However, there are a number of problems that are being faced by the construction companies or contractors or other relevant stakeholders, in the completion of a construction project. One of the major problems being faced is time and cost overrun. Thus, it is important to find ways of mitigating this critical problem. One of the solutions that is being used is the prediction of the amount and time that a project might overrun beforehand i.e. estimating the overrun during the design phase itself. This prediction can be done using a number of different techniques, the important one of which used in this paper is through the use of Fuzzy Logic. It also provides a brief description about the factors that are responsible for causing this cost overrun. The factors are identified by conducting a questionnaire survey and gathering responses from the relevant stakeholders which include contractors, project engineers, architects and consultants. The responses collected are further processed and analysed using SPSS software. The top 5 factors have been selected after the analysis and further used in preparation of the fuzzy logic model in the fuzzy toolbox of MATLAB. Further, the validation of this model has been done with real-time data of projects from various published research papers. Thus, the model developed provided prediction of the percentage of the cost overrun based on the percentage input of the top five factors.

IMPACTS OF CONSTRUCTION RISKS ON COSTS IN LEED-CERTIFIED PROJECTS

2016 ◽  
Vol 11 (4) ◽  
pp. 163-181 ◽  
Author(s):  
Asli Pelin Gurgun ◽  
David Arditi ◽  
Pablo Casals Vilar
Keyword(s):  
Green Building ◽  
Building Design ◽  
Cost Overruns ◽  
Green Building Design ◽  
Cost Impact ◽  
Construction Risks ◽  
Product And Process ◽  
And Performance ◽  
Definition Of ◽  
The Cost

Construction according to green principles rather than traditional methods poses a new set of risks to project participants. These risks should be appropriately identified and managed in order to prevent cost overruns. This study aims to identify construction risks and their cost impacts in LEED-certified projects. For this purpose, thirteen risks were identified based on a literature survey and were categorized under four groups of issues: (i) consultant, contractor and subcontractor, (ii) material, product and process, (iii) legal, regulatory and contractual, and (iv) financial and economic. A survey was then administered to green building design and construction practitioners in the U.S. to assess the likelihood of occurrence of these risks and their respective impacts on project cost. According to the survey results, the risks associated with consultant, contractor and subcontractor issues have the highest expected impact on costs. The top five risk factors were determined as (1) contractors and subcontractors agreeing to standards that are not within their expertise and competence, (2) high cost of certification, (3) lack of expertise in new products/technologies, (4) doubts about the long-term viability and performance of new and untested products, materials and technologies, and (5) inadequate definition of project parties' contractual roles and responsibilities. Mitigating the cost impact of risks is of great value to owners and designers and contractors. Recognizing the risks associated with LEED-certified projects and their cost impacts can be of benefit to all practitioners.

scholarly journals Quantitative Risk Assessment in Construction Disputes Based on Machine Learning Tools

Symmetry ◽  
2021 ◽  
Vol 13 (5) ◽  
pp. 744
Author(s):  
Hubert Anysz ◽  
Magdalena Apollo ◽  
Beata Grzyl
Keyword(s):  
Machine Learning ◽  
Construction Projects ◽  
Quantitative Risk Assessment ◽  
Construction Site ◽  
Learning Tools ◽  
Single Product ◽  
Cost Overruns ◽  
Independent Variables ◽  
Construction Disputes ◽  
The Cost

A high monetary value of the construction projects is one of the reasons of frequent disputes between a general contractor (GC) and a client. A construction site is a unique, one-time, and single-product factory with many parties involved and dependent on each other. The organizational dependencies and their complexity make any fault or mistake propagate and influence the final result (delays, cost overruns). The constant will of the parties involved results in completing a construction object. The cost increase, over the expected level, may cause settlements between parties difficult and lead to disputes that often finish in a court. Such decision of taking a client to a court may influence the future relations with a client, the trademark of the GC, as well as, its finance. To ascertain the correctness of the decision of this kind, the machine learning tools as decision trees (DT) and artificial neural networks (ANN) are applied to predict the result of a dispute. The dataset of about 10 projects completed by an undisclosed contractor is analyzed. Based on that, a much bigger database is simulated for automated classifications onto the following two classes: a dispute won or lost. The accuracy of over 93% is achieved, and the reasoning based on results from DT and ANN is presented and analyzed. The novelty of the article is the usage of in-company data as the independent variables what makes the model tailored for a specific GC. Secondly, the calculation of the risk of wrong decisions based on machine learning tools predictions is introduced and discussed.

scholarly journals Identification and analysis of factors affecting labour productivity in Iraq

2018 ◽  
Vol 162 ◽  
pp. 02032 ◽  
Author(s):  
Tareq Khaleel ◽  
Yasser Nassar
Keyword(s):  
Labor Productivity ◽  
Construction Projects ◽  
Arab World ◽  
Labour Productivity ◽  
Relative Importance ◽  
Construction Sites ◽  
Factors Affecting ◽  
Importance Index ◽  
Leadership Motivation ◽  
Major Factors

Productivity is a very important element in the estimation process in construction management. The objective of this research is to identify and analyze the factors which affect labor productivity in construction projects. In this research, 42 effective factors were collected from site survey, interview with engineers and experts, and previous research in the Arab world. These factors are grouped into Nine categories “Workforce, Leadership, Motivation, Supervisors, Safety, Project, Time, Material, and External”. A survey questionnaire of 70 respondents was distributed among different experts. A statistical analysis was done using SPSS and EXCEL packages. The Relative Importance Index was used to find out the most significant factors affecting the labor productivity in construction sites. The results accomplished from the survey revealed that the major factors negatively affect the labor productivity (ranked from the worst factor with Relative Importance Index values, respectively) namely, Availability Material (88.571%), Climate status “Weather” (88%), Religious occasions (86.29%), Number of working groups (86%), Ganger experience (85.714%), Workforce surveillance (84.857%), Ganger Age (84%), working at height (82%), Drawings and specifications alteration during execution (81.69%), and Sequence of floor (80.571%). Based upon these findings, this can help the construction professionals to improve the productivity and project performance in Iraq.

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