Management of Incorrect Public Works Cost Estimations for Japan’s Local Governments

Nobuo Nishi,Masaru Minagawa

doi:10.5755/j01.ppaa.20.1.27272

Abstract

Local governmental public works departments frequently engage in planning, cost estimation, ceiling price determination, bidding, contracting, construction, supervision, and inspection activities for various building projects. However, despite all this work, local governments in Japan often cancel bids for project design and construction due to incorrect cost estimations. Consequently, facilities are often not constructed as planned, resulting in adverse impacts on public services and decreased government employees’ motivation. While local governments have conducted internal investigations to prevent incorrect estimations, a firm diagnosis model and preventive measures have not been developed. This study analyses the various causes of incorrect cost estimations and subsequently examines the resulting social problems. We propose improved human resources development management and organisational management techniques using the V-mSELC model—an error analysis model designed to address incorrect cost estimations. The study aims to aid public works professionals and interested scholars.

Highlights

Local governments in Japan often cancel bids owing to incorrect cost estimations corresponding to project design
We investigate incorrect cost estimations by the local government of a city in Japan where the first author works, and we probe into this phenomenon that has become a social issue in recent years
We have focused on the use of the V-mSELC model, which is an error analysis model specialising in incorrect cost estimation constructed by Nishi and Minagawa (2019)

Summary

Introduction

Local governments in Japan often cancel bids owing to incorrect cost estimations corresponding to project design. The reason for incorrect cost estimations cannot be pinned on the shortage of civil engineers or the decrease in the number of construction contracts It is, necessary to analyse the case based on the type of construction. Owing to the lack of technically skilled civil engineers in the field of maintenance and repair, the number of cases of incorrect cost estimation may increase in the future. Improved human resources development management and organisational management, which have not been implemented so far, are crucial To this end, we have focused on the use of the V-mSELC model, which is an error analysis model specialising in incorrect cost estimation constructed by Nishi and Minagawa (2019).

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Findings

Conclusions