Causes Of Cost Overruns Research Articles

Adaptability of BIM technology to mitigate the cost overruns in design and build projects

Purpose Cost overruns are an inevitable issue in design and build (D&B) projects. In D&B projects, causes for cost overruns can be managed by adopting appropriate building information modelling (BIM) functions. Because there is a research gap in synergy between the use of BIM for mitigating cost overruns in D&B projects, this study aims to evaluate the adaptability of BIM to manage cost overrun issues in them. Design/methodology/approach Research objectives were attained through a quantitative research approach adopting the Delphi technique, which consists of three rounds of a questionnaire survey. Through statistical tools, the collected data were analysed. Findings This research revealed the ten most crucial causes for cost overruns in D&B projects, where continuous changes in designs and drawings are the top causes. Change and revision management and interoperability are the most crucial BIM functions to address the aforementioned cause. Subsequently, 16 enablers, 26 barriers and 19 strategies to implement BIM to manage the identified significant causes of cost overruns were overviewed. Originality/value This study addresses the literature gap pertaining to the cost overrun in D&B projects and the application of BIM by studying the causes for cost overrun, suggesting BIM functions to mitigate the above cause. Moreover, this study assessed the probable barriers and enablers for BIM adoption in construction projects from D&B perspective.

Identifikasi Faktor–Faktor Penyebab Cost Overrun dan Time Overrun pada Proyek Konstruksi Gedung Di Kota Banda Aceh

Projects of building construction develops acordance with the implementation of the fulfillment of human life. During implementation, the project did not always as expected. These things happen due to cost and time deviations. The problem in this research is what are the factors that cause cost overrun and time overrun in the implementation of building construction projects in Banda Aceh city. The purpose of the study was to determine the causes of cost overrun and time overrun in the implementation of building construction projects toward minimize the impact of failure in the implementation of a construction project. The research data was obtained by distributing questionnaires to 40 respondents from qualified (small) and (medium) of contractors in Banda Aceh city. The sampling technique used is purposive sampling with the criteria of fulfilling the experience of having been involved in the implementation of building construction projects. Data processing was carried out with SPSS version 24 software with confirmatory factor analysis, descriptive analysis and fishbone analysis. The results of factor analysis obtained the average value of the MSA test of 0.694, the KMO test of 0.684. The value of a variable can be analyzed further if the value exceeds 0.5 and the Bartlett test obtained a value of 0.000 <0.05, it explaned each variable is correct. The total value of variance explained is 50.91%, it means the nine factors can form the factors causing cost overrun and time overrun, while the remaining 49.08% is explained by other factors. From the loading factor value, the dominant factor is material factor (X4) with a loading value of 0.91. The results of the descriptive analysis show causing of cost overrun and time overrun are an increase in material prices (X4.3) with mean value is 4.13 and poor quality control of materials (X4.4) with mean value is 4.03.

Modeling the Causes and Mitigation Measures for Cost Overruns in Building Construction: The Case of Higher Education Projects

The formidable need for building projects places greater pressure on stakeholders to deliver these projects on time, within the budget, and with high quality. However, many building projects have experienced extensive cost overruns despite extensive research on their causes and mitigation measures. Thus, the effectiveness of mitigation measures is questionable. This study examines the status of cost overrun in building construction projects and develops a structural equation model to establish the relationships between causes of cost overrun and mitigation measures, using higher education building projects as a case study. This study analyzed cost overruns in 27 higher education building projects. Furthermore, 118 responses were collected using a questionnaire survey and analyzed using descriptive statistics, the Kruskal–Wallis H test, exploratory factor analysis, and partial least-squares structural equation modeling (PLS-SEM). The findings suggest that around 93% of the 27 higher education building projects experienced cost overrun, and the majority overran between 5% and 10%. The findings illustrate that bid evaluation and project planning mitigation measures positively affect efficiency and contract management- and design-related causes. Furthermore, project initiation and contractor selection mitigation measures positively affect claim management-, efficiency and contract management-, estimation and scheduling-, and design-related causes. These findings will help policymakers make informed decisions in selecting effective mitigation measures to reduce cost overrun and improve industry efficiency.

Significant factors affecting the Vietnam Roads Infrastructure Construction Cost Overrun - A Review

Cost overrun represents a significant challenge faced in construction projects, particularly in the realm of transportation infrastructure. The investigation into the causes of cost overruns in such projects has garnered substantial attention from both academics and the general public. Various studies conducted globally have identified diverse factors contributing to cost overruns. This article undertakes a critical review of the literature on cost overruns in construction projects, encompassing cases from different countries with a specific focus on Vietnam. The aim is to identify and comprehend the primary potential causes of cost overruns in construction projects across various geographical contexts, providing insights into both commonalities and distinctions within the identified factors. According to the findings of this study, the ten identified factors encompassing Delay in site clearance certificates, Change Management, Delay in Payment, Extension of the project implementation schedule, Construction Material Price Fluctuation, Effects of inflation and price slippage, Poor construction site management, Poor project management capacity of the investor, Poor financial capacity of the investor, Geological complexity are deemed highly influential and warrant close scrutiny during the implementation of projects in Vietnam. The insights gained from this study will serve as invaluable recommendations for active entities within the construction industry to adopt a more holistic approach to project management, cost control, and cost overrun management. By addressing quantitatively these factors in the forthcoming research, organizations in construction industries in Vietnam can effectively minimize project costs overrun in the future.

Cause of delay and cost overrun in infrastructure projects

This paper focused on identifies causes of cost overrun and delay factors in infrastructure projects. Mainly, a structured review of literature has been conducted for the purpose of knowing extend of time delay and cost overruns experienced by infrastructure projects. To know this issue this paper explored current state of cost overruns and delay in infrastructural projects. Principally, the reviewed of 15 empirical literatures demonstrated different causes of delay and cost overrun. Main findings proposed distinctive factors of cost overrun and delays, and the main of them; pitfalls and errors in design, economic and political instability, bureaucracy of owner, poor experience of contractors, late in payment to contractor for terminate work, incompetent contractor human resources, in accurate scheduling and initial cost estimation by contractor and recurrent design change.

Evaluation Cost Over-Run in Construction of CFSPP EPC Contract:

Coal Fired Steam Power Plant (CFSPP) Project is a complex project that requires multidisciplinary knowledge in its implementation. As a result, cost overruns often occur in its implementation. In Indonesia, most power plant projects are using EPC contracts (Engineering, Procurement, and Construction). The contractor is fully responsible for any failures that may occur during the work implementation period. The aim of this study is to compare the realization of completion costs for CFSPP projects with Bill of Quantity (BoQ) and the factors that influence deviations. This research was conducted qualitatively based on the data obtained. Deviations are calculated based on the difference between completion costs and BoQ. Discussions and interviews were conducted with Project Managers and Site Commercial and Risk Managers who were directly involved in construction phase to determine the causes of cost overruns. The result is that the actual cost incurred in the CFSPP project is 3x the cost listed in BoQ. There are cost overruns in each work group including Civil Works, Mechanical Works, Electrical Works and Others Works. Indirect cost realization is 29.84% of total completion cost. The factors that influence cost overruns are: (i) Contractors do not understand the details of the work to be done, (ii) Changes in design and (iii) Realization volume exceeds initial planned volume. The results of this study are expected to be input in preparing owner estimate for CFSPP projects and adding new risk factor lists in CFSPP during construction phase.

Revolutionizing steel building project cost overrun risk assessment by Bayesian network

PurposeIn recent years, cost overrun becomes a common problem in steel building construction projects. The average percentage can vary widely depending on the project type, size, complexity and location. The steel structure change ratio in Taiwan is from 1 to 18% in statistics. The contractors always put every possible effort into preventing or mitigating project cost overruns, and one of the approaches is an accurate cost overrun risk estimate. Traditional project cost overrun risk assessment models mainly focus on macro-level evaluation and may not function well for the project-specific level (micro-level). This study creates a network-like connection model between the outcome (i.e. cost overrun risk) and the associated root causes in which the project status evaluation checklists of design, manufacturing, construction and interfaces are used to evaluate the checklists' influences through the Bayesian network (BN) composed by intermediate causes.Design/methodology/approachDue to the constraint of data availability, BN nodes, relationships and conditional probabilities are defined to establish a BN-based steel building project cost overrun assessment model following the knowledge of experts. Because of the complexity of the BN, the construction of the BN structure is first to build BN's fault tree (FT) hierarchy. And then, basic BN framework is constructed by the transformation of the FT hierarchy. Furthermore, some worthwhile additional arcs among BN nodes are inserted if necessary. Furthermore, conditional probability tables (CPTs) among BN nodes are explored by experts following the concept of the ranked node. Finally, the BN-based model was validated against the final cost analysis reports of 15 steel building projects done in Taiwan and both were highly consistent. The overall BN-based model construction process consists of three steps: (1) FT construction and BN framework transformation, (2) CPT computation and (3) model validation.FindingsThis study established a network-like bridge model between the outcome (i.e. cost overrun risk) and the root causes in a network of which cost influences are evaluated through the project-specific status evaluation checklists of design, manufacturing, construction and interfaces. This study overcame several limitations of the previous cost overrun risk assessment models: (1) few past research support assessment of cost overrun based on real-time project-owned data and (2) the traditional causal models inadequately depict interdependencies among influence factors of cost overrun at the network. The main influence factors of the cost overrun risk at the steel building projects in Taiwan were also examined using sensitivity analysis. The main root causes of cost overrun in steel building projects are design management and interface integration.Originality/valueThe proposed model belongs to the project-specific causal assessment model using real-time project-owned status checklist data as input. Such a model was seldom surveyed in the past due to the complicated interdependence among causes in the network. For practical use, a convenient and simple regression equation was also developed to forecast the cost overrun risk of the steel building project based on the root causes as input. Based on the analysis of cost overrun risk and significant influence factors, proper tailor-made preventive strategies are established to reduce the occurrence of cost overrun at the project.

Optimized Approach toward Identification of Influential Cost Overrun Causes in Construction Industry

Prioritization is considered a core concept in cost overrun analysis. This study first aimed at proposing a new approach for the calculation of total risk magnitude (TRM) and, second, introduced the application of Pareto analysis in the prioritization of cost overrun causes. A case study is delineated to explain the applicability of the aforementioned approaches. Thirty-eight unique causes of cost overrun in urban-related construction projects were identified and a survey was conducted among construction professionals in Iran. The TRM for each cost overrun cause is calculated using single-attribute (SA), double-attribute (DA), and multiple-attribute (MA) approaches. Henceforth, based on calculated TRM, the causes are prioritized using the relative importance index (RII) and Pareto analysis. A comparative analysis revealed that not only could Pareto-based prioritization be effectively employed for prioritization, but also, the proposed MA approach for TRM calculation optimizes the efficiency of the most influential cause identification.

A Study on Factors Influencing Cost Overrun in High-rise Building Construction across India

Cost overrun is common problem in construction projects worldwide. Most Indian construction projects, particularly those involving high-rise buildings, have had severe cost overruns. For managers, architects, engineers, and contractors, completing building projects within the specified cost budget has become the most important and hard assignment. Since it is common for high-rise building projects to go over budget, the aim of this study is to find out the causes of cost overruns and provide effective measures. The study found 70 cost overrun factors based on a comprehensive literature review and expert opinions. A Google form questionnaire was distributed to 150 construction professionals across India. After following up, 101 of the 150 responses were received. A five-point Likert scale was used and the acquired data was analyzed and ranked using the Relative Importance Index (RII) technique. According to the findings of RII, the top ten critical factors influencing cost overruns were frequent change orders during construction by the owner, delay in construction, escalation of material prices, market inflation or deflation, rework, frequent changes in design, inaccurate evaluation of the project timeline, unforeseen ground condition, inaccurate quantity take-off, and delay in progressive payment by the owner. Spearman’s rank correlation test revealed that there is a very significant relationship between the rankings of factors provided by the owner, the consultant, and the contractor. In addition, a factor analysis tool in the SPSS software was also used to categorize the seventy factors into sixteen core components. The top ten critical factors were presented to subject matter experts, and their suggestions were being compiled. These results are expected to help construction professionals minimize cost overruns, improve cost control measures, and initiate future research.

Causes, Effects, and Mitigation Measures of Time and Cost Overruns in Water Supply Projects: Case of Tigrai Region, Northern Ethiopia

Project cost overrun and schedule delay are major and widespread problems in the construction industry. In Tigrai, most water supply construction projects are not completed within the predetermined contract time and planned budget. Hence, this research was carried out to investigate the causes and effects of time and cost overrun in water supply projects in Tigrai, northern Ethiopia and further recommend effective mitigation measures. A total of 87 questionnaires were distributed, 50 of them were collected, and desk study of 12 water supply projects were conducted. Data were analyzed using relative importance index and statistical software SPSS version 20. Results showed that the most important causes of time overrun were design errors and changes, lack of consistency between bill of quantities and drawings, and change order. Similarly, the most important causes of cost overrun were design errors and changes, lack of consistency between bill of quantities and drawings, and shortage of construction materials and electromechanical equipment in local market. The most effective mitigation measure of the overruns was complete and proper design. Time and cost overrun of the projects ranged between 0 and 203% and between 0 and 25%, respectively. The regression model showed that time overrun was estimated well (r2 = 0.95) using delays caused by design errors and changes and material import. Similarly, cost overrun was estimated well (r2 = 0.98) using factors that affect cost. Overall, the major cause for the overruns was design problem, hence clients and consultants should give due attention for the design process.

Comparative analysis between different risk score calculation approaches

Purpose Total risk score (TRS) is considered one of the main indicators for risk evaluation. Several studies attempted to employ different types of risk indices for the evaluation of cost overrun causes. Hence, this study aims at performing a comparative analysis to evaluate the efficiency of three different approaches for TRS calculation. Design/methodology/approach Thirty-eight unique causes of cost overrun in urban-related construction projects were identified and a survey was conducted among construction professionals in Iran. The TRS for each cost overrun cause is calculated using single-attribute (SA), double-attribute (DA), and multiple-attribute (MA) approaches, and eventually, causes were ranked. Furthermore, principal component analysis (PCA), logistic regression analysis (LRA), and K-means clustering are utilized to compare the differences in the generated TRS using different approaches. Findings The results revealed that the TRS generated through the MA approach demonstrated the highest efficiency in terms of generating correlation between causes and their identified latent constructs, prediction capability, and classification of the influential causes in the same group. Originality/value The originality of this study primarily stems from the adoption of statistical approaches in the evaluation of the recently introduced TRS calculation approach in comparison to traditional ones. Additionally, this study proposed a modified application of the relative importance index (RII) for risk prioritization. The results from this study are expected to fulfill the gap in previous literature toward exploring the most efficient TRS calculation approach for those researchers and practitioners who seek to utilize them as a measure to identify the influential cost overrun causes.

The accuracy of benefit-cost analysis for transport projects supported by the Asian Development Bank

This paper analyses the accuracy of Benefit-Cost Analysis (BCA) of transport projects financed by the Asian Development Bank (ADB). Ex post evaluation of BCAs outside Europe and North America has been largely missing from the current literature. This study covers 59 roadway projects in developing countries funded by ADB and examines the accuracy of BCA results through four dimensions: frequency, magnitude, correlation, and tendency. We found that under an average project completion rate of 95.33%, the average construction cost overrun for 59 roadway projects is 10.71%, equivalent to USD 71.4 million. Grounded on 23 projects disclosing detailed economic analysis, we discovered a systematic tendency to understate both the present values of cost (18 out of 23 projects) and the present values of future economic benefits (13 out of 23 projects) in ex ante BCA. Furthermore, more than half of projects (25 out of 47) underestimated EIRR, and about 52.17% of them (12 out of 23) understated NPV. Since the underestimation of economic benefits is too small to counterbalance the underestimation of costs, the project EIRR is on average 5.4% lower than the initial expectation. Moreover, we discussed ADB’s choice of the social discount rate, shadow price, and counterfactual base scenarios, which significantly influence the accuracy of BCA results and the reliability of decision-making grounded on BCA results. Lastly, the causes of cost overruns and benefits underestimations were analyzed.

Does the Planning Fallacy Prevail in Social Infrastructure Projects? Empirical Evidence and Competing Explanations

The planning fallacy is at play in projects when optimism bias and/or strategic misrepresentation are present. We examine the cost performance of approximately US$ 6.5 billion worth of social infrastructure projects that were procured in Hong Kong and specifically the differences between their final accounts and the various types of estimates that were prepared prior to construction. We focus on the (honest) planning fallacy and hence aim to determine whether estimates are more optimistic than actual costs. Our data shows that 43% of projects incurred a <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">cost underrun</i> from their contract award. We therefore infer that at best 57% of projects may be explained by the presence of the planning fallacy. Based on our findings, we argue that optimism and pessimism bias coexist. Likewise, the planning fallacy and competing explanations can simultaneously account for cost deviations in social infrastructure projects. We submit that the prevalence of the planning fallacy has been exaggerated and hence provide an explanation as to why this has occurred. We finally suggest there is a need for additional empirical work to test the claim that the planning fallacy is <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">the</i> underlying cause of cost overruns and thus the best “theory” to explain “how projects work.”

Causes of cost overruns in building construction projects in Asian countries; Iran as a case study

PurposeCost overruns have been identified as the most significant challenge for construction sector stakeholders. Like many developing countries, the Iranian construction industry suffers from poor cost performance. So, the current research aims to investigate the causes of cost overrun in Iranian construction projects. This paper also reviews the findings of similar studies conducted in several Asian countries.Design/methodology/approachThis paper includes a literature review and a quantitative method with a questionnaire survey. The review is limited to the studies investigating the causes of cost overrun in an Asian country in the last decade. Moreover, the current research was conducted through a questionnaire prepared based on 43 common factors identified through the literature review. The required data were gathered from the representatives involved in handling construction activities in Iran. The collected data were analyzed based on relative importance index (RII), using the SPSS software package.FindingsThe results showed that poor site management, improper planning, fluctuation of prices of materials, lack of experience, and poor economic condition are the critical reasons for cost overrun in Iranian construction projects. The findings also indicated that among the studies conducted in Asian countries, the first three factors have the highest frequency.Originality/valueThis paper highlighted most studies concerning the cost overrun factors in construction projects in different Asian countries in recent years. Up-to-date knowledge helps to understand the complexity of this field in various periods and therefore minimizes the risk of cost overrun. This research can also be used as a benchmark for further studies to clarify similar issues in other developing countries.

Rationalizing Critical Cost Overrun Factors on Public Sector Housing Programmes

The cost overrun phenomenon on projects worldwide creates a major source of risk that warrants investigation. The prevailing factor school of thought provides strong empirical evidence that critical factors contributing to cost overruns are both context-specific and project-specific. Although many studies have been conducted identifying factors and causes of cost overruns, very few studies have investigated root causes. Additionally, a limited body of knowledge is available within the context of Small Island Development States (SIDS). To fill this gap, the objectives of this study were to identify and determine the main critical factors contributing to the cost overrun phenomenon in public sector social housing programmes (PSSHPs). These selected factors were thereafter categorized under leading root causes, and their severity was determined based on primary stakeholders’ perspectives. One hundred and twenty-three factors were identified from the literature, of which forty-one critical factors were extracted and grouped under four root causes based on a pilot survey of relevant public sector housing experts in the Trinidadian and Jamaican construction sectors. These refined factors and root causes were formulated into a questionnaire survey. One hundred and five responses were obtained from professionals who had a minimum of five years’ experience in various phases of public housing delivery. The severity of these critical factors was evaluated, ranked, and categorized using the relative importance index (RII) approach. The findings uncovered the leading root cause, which is political in nature. The top five critical factors are the selection of politically aligned contractors, the intentional design of inadequate contracts, the project actors' deliberately underestimating costs, the partisan project management team, and strategic misrepresentation. These findings are unique to SIDS and contribute to knowledge to reframe contemporary project management practices, which focus mainly on technical causes. Finally, as existing technical solutions are ineffective in curbing cost overruns in PSSHPs, these findings also inform public sector policymakers to focus on prioritization, control, and mitigation of political risks in formulating effective governance mechanisms. Doi: 10.28991/ESJ-2022-06-03-016 Full Text: PDF

COST OVERRUNS ON RAILWAY SIGNALLING PROJECT: QUALITATIVE CASE STUDY ON LRS COMPANY

Railway is a mode of transportation that provides several advantages over other modes in terms of punctuality, capacity and energy efficiency. The signalling system is the main element of the railway which functions to ensure the safety of train travel. Several signalling construction projects carried out by LRS experienced cost overruns. It is necessary to conduct research to determine the causes of cost overruns, as the basis for the improvement process of Project Cost Management. The research was conducted using a qualitative case study method referring to the Miles &amp; Huberman interactive model, with descriptive analysis. Data collection was carried out by triangulation including in-depth interviews, documentation, and FGDs. The selection of informants was carried out using purposive sampling method combined with snowball sampling method. Triangulation of data collection methods and triangulation of sources was carried out to increase the reliability of the research. The study found that the four factors most frequently mentioned by informants as the main causes of cost overruns, namely: Changes in scope; Extension of time; Weak of internal planning and Increase in material prices.

Identifying the Factors Affecting the Cost Management of Road Construction Projects in Tanzania: Review Paper

Among the key factors to take into consideration before the execution of any project is time, cost and quality. Most projects meet Quality and sometimes time but cost management is a real question in the implementation of many construction projects in the world. Poor management of the cost causes the delay of many road construction projects in the world too. In this paper literature review has been conducted to identify different factors that contribute to cost management both positive and negative ones. Different factors were identified that contributed to poor management of cost in highway construction projects such as force majeure factors like weather conditions, political matters and other factors like change in design, change of scope, conflict among the stakeholders, poor leadership, incompetence of project manager and subcontractors, in Tanzania from the literature perspective the challenge of cost overrun is very critical as insisted by different authors in their researches. Most of the projects deviate from their planned budget by even more than 50%. Apart from all causes of cost overrun, delay in these projects is the critical problem which causes the cost increase, the problem of delay is critical in both developing and developed countries, hence mitigating the factors discussed in this paper will minimize the problem of delays and cost overrun too although further research is required in this area to come up with proper mitigation measures to minimize the problem of cost overrun in road construction projects in Tanzania.

Modeling cost overrun in building construction projects using the interpretive structural modeling approach: a developing country perspective

PurposeAlthough several studies have been conducted on the causes of cost overrun, they have mainly assumed that the causes of cost overrun are independent of each other, and few of them scrutinized the complex interrelationships between the causes. To fill the gap, this study aims to investigate the mutual interactions between the causes of cost overrun using interpretive structural modeling (ISM) and proposing strategies to tackle the causes considering their interactions.Design/methodology/approachCritical causes of cost overrun were identified through a comprehensive literature review. In total, 22 key causes are then refined based on the opinions of relevant experts involved in the Iranian building and construction sector. Using the nominal group technique, the causes' interactions were examined and represented via the ISM diagram. The causes were also classified using “matrix cross-reference multiplication applied to a classification (MICMAC)” technique.FindingsThe results showed that price fluctuation, claims, execution delay, delay in payment and change order positioned at the highest level of the obtained model can directly result in cost overrun, and corruption and poor contract management located at the base of the model are two major root causes of cost overruns. It was also concluded that more attention should be paid to the precontract phase of the project to address and prevent corruption and managerial issues deeply rooted in this stage.Originality/valueThe findings of this study provide a clear understanding of how different causes of cost overrun are related to each other and can ultimately assist project managers of different parties in choosing strategies to mitigate cost overrun in building construction projects.

Investigating the Causal Relationships between Project Complexities and Project Cost: An Empirical Study from New Zealand

Project complexity is usually considered as one of the main causes of cost overruns, resulting in poor performance and thus project failure. However, empirical studies focused on evaluating its effects on project cost remain lacking. Given this circumstance, this study attempts to develop the relationship between project cost and the multidimensional project complexity elements. The study assumes complexity as a multidimensional factor including the task, organization, market, legal, and environment complexities. And it adopts an empirical evidence-based structural model to account for the relationships between project cost and project complexity. By doing so, a quantitative assessment of multidimensional project complexity has been developed. The findings suggest that task and organization complexities have direct effects on project cost, while market, legal, and external environment complexities have indirect effects on project cost. The practical contribution is that the findings can improve the understanding of which dimension of complexity significantly influences project cost and the need to focus efforts on strategically addressing those complexities.

Cost Performance for Residential Building Projects

The construction industry is one of the main sectors that play basic role in the urban and rural development of a society. It provides important ingredients for the development of an economy. However, many construction projects experience extensive cost overrun. This study is conducted to: (1) reveal the magnitude and direction of cost overrun in building construction projects implemented in the West Bank - Palestine over the years 2013 to 2018, (2) develop prediction models for predicting project cost overrun based on the contract price value, (3) identify the causes of cost overrun in building construction contracts in the West Bank – Palestine, (4) test the importance of cost overrun causes from consultants and contractors’ perspective. To achieve the study objectives, two methods are followed: (1) Field data collection for 102 building construction projects implemented in the West Bank during the period 2013 and 2018, (2) A questionnaire survey was conducted to identify and rank cost overrun causes from the perspectives of contractors and consultants. The findings reveal that100% of projects suffer from cost overrun with average of 34.58%, ranging from 15% to about 88%. The results show that cost overruns for building projects increased with contract prices. The questionnaire survey reveals that the top five cost overrun causes from combined view are: experience in contracts, insufficient time for estimate, incomplete drawings, materials’ price fluctuation, and political situation. It is hoped that the findings will guide efforts to improve the performance of construction industry in Palestine and other developing countries.