Effects of change orders on the budget of the public sector construction projects in the kingdom of Saudi Arabia

Abstract

This study investigates the impact of change orders on the budgets of 43 public construction projects in the Kingdom of Saudi Arabia (KSA). It addresses the research problem of budget fluctuations in construction projects and aims to understand the causes and consequences of change orders. The research employs a comprehensive methodology involving data analysis from these projects to draw meaningful insights. The major findings of the study indicate that approximately 75 % of the change orders could have been avoided with more effective project planning and management. Owners are found to be responsible for around 40 % of the change orders, emphasizing the need for improved collaboration and communication between project teams and owners during the planning phase. Inexperienced contractors contribute to at least 5 % of the change orders, suggesting the importance of evaluating contractor expertise before project awarding. The study also provides two equations for estimating additional funding or surpluses for public projects, taking into account fluctuations in construction material prices. Moreover, it identifies six critical construction materials and trades, such as thermal and moisture protection, site work, concrete work, conveying systems, electrical work, and mechanical work, which have the most significant impact on project budgets. These insights offer valuable guidance for enhancing project planning, mitigating budget overruns, and optimizing cost efficiency in public construction projects.