Project Cost Overruns Research Articles

Simulation modelling of cost overruns in building projects: a panel data analysis

Cost overrun is often a challenge in the construction industry due to its complex nature and inefficient project management. Despite extensive research, cost overruns persist in construction. Hence, to minimise these challenges, factors attributing to the cost overrun need to be identified. A country-based assessment is needed since these factors vary from nation to nation. Research conducted almost two decades ago has identified the key cost-related factors influencing cost overrun of Sri Lankan building projects as variation, extra work, fluctuation of price and currency, day works and others. However, given the significant developments and technological advancement in the Sri Lankan construction industry since then, it is crucial to reassess the factors influencing cost overrun in the current context. Therefore, this research intends to re-evaluate the cost-related factors contributing to cost overrun in Sri Lanka. Further, a panel data analysis was conducted to analyse how the influence of the cost-related factors that cause cost overrun has changed over time. This research adopted a survey strategy and used document review on the final BOQ, tender document, and final statement as the data collection technique. Mote-Carlo simulation was adopted to analyse the data collected from twenty random building projects in the western province of Sri Lanka. The findings concluded that work sections measured as ‘item’ in the BOQ and variations and extra work cause overruns in Sri Lankan construction. Hence, clients, contractors, and consultants should give more priority to these factors to minimise the cost overrun by reducing the errors in BOQ, making accurate estimations, and reducing changes over time. However, as the simulation model was derived based on cost-related factors, this study recommends considering other factors influencing the cost overrun of buildings in future research.

Evaluation of Factors Leading to Time Delays and Cost Overruns in Marine Construction Projects

Evaluation of Factors Leading to Time Delays and Cost Overruns in Marine Construction Projects

Valuation of Project Managers to Enhance Project Performance in Nigeria’s Construction Industry

Construction project management is critical to the success of construction projects, with the performance of project managers (PMRs) playing a central role. Despite its importance, previous studies have highlighted the poor performance of construction organizations in Nigeria, such as project delays and cost overruns and the need for proper project management practices. However, the specific performance of PMRs in the Nigerian construction industry (NCI) has not been extensively studied. To address this issue, this study aims to identify the causes of underperformance among PMRs in the NCI by examining the tasks where PMRs underperform and the extent of this underperformance and its effect on motivational support from organizations. Data were collected through 206 questionnaires and 36 semi-structured interviews with organizations and project managers. Descriptive analysis was conducted to evaluate project management (PM) practices as well as the level of motivational support provided to PMRs. The analysis revealed that PMRs underperform in more than 60% of tasks but outperform in 20%. Underperformance refers to the tasks in which PMRs performed less than the expected contributions set by the organization, while outperformance describes tasks where PMRs exceeded the organization’s expectations. The analysis also revealed low motivational support of PMR. Correlation analysis was conducted to investigate whether motivational support influences PMR performance, and the results indicated a two-way causal relationship between underperformance and low motivational support. This study integrated a game theory model with regression analysis to show that (stay, support) is the dominant solution for project managers and organizations, provided the net contribution of support is positive. In this context, “stay” refers to PMRs continuing working with their current organization, while “support” refers to the motivational support provided by the organization to enhance the commitment and performance of the PMRs. However, current support levels may not be enough to cause PMRs to begin to outperform. In addition, regression analysis was conducted between the degree of underperformance and motivational factors, and we conducted a preliminary simulation by increasing these values of regression coefficients. The results indicated that while motivational support from organizations can improve PMRs performance, its effectiveness is limited. Factors such as corruption, political pressures, and organizational culture have a greater impact on performance. Addressing these factors may be more crucial for enhancing performance and project outcomes than focusing only on motivational support. Therefore, the Nigerian construction industry needs to implement institutional changes alongside motivational strategies to improve PMRs performance and project success.

5D BIM Implementation to Overcome Cost Management Issues in Upstream Oil and Gas Projects in Malaysia: A Review

Since the outbreak of COVID-19, the upstream oil and gas industry has faced unprecedented challenges in terms of low prices. Given the volatility and uncertainty around oil prices, it is critical for the sector to exercise capital constraints and manage costs effectively to ensure its future success. In response to the difficulties with cost overruns, oil and gas operators have implemented various strategies and measures, such as cost reduction, project prioritisation, project delays and streamlining the supply chain and contracts. However, these approaches do not provide a sustainable or cost-effective solution in the long term. Previous research on project cost overruns has shown that internal factors, particularly project data integration, are the main cause of poor project performance and cost overruns. However, no approaches or technologies have been proposed to improve cost management or control cost overruns. This paper aims to review the features and functions of 5D BIM that could improve the integration of project data throughout the lifecycle and provide a solution for cost management in Malaysia's oil and gas upstream projects. The methodology adopted in this study ensures a rigorous and systematic approach in reviewing the literature on cost management issues, cost overruns and the role of 5D BIM. Consequently, BIM streamlines cost estimating, saves time by automating data entry and producing accurate estimates, increases productivity and promotes better collaboration within the project team.

Application of Management Techniques in Controlling Cost Overruns in Residential Construction Projects

Construction projects in developing countries are frequently plagued by cost overruns. These overruns, which refer to the additional costs incurred beyond the initially estimated budget, are a common occurrence in the construction industry. The extent of these cost overruns varies significantly from one project to another, thereby necessitating a comprehensive investigation into the factors contributing to such discrepancies. The cost of construction plays a pivotal role in determining the success of a project throughout its lifespan. Thus, it becomes imperative to scrutinize the disparity between the actual cost of building projects and the initially projected cost, which typically ranges between 20% and 50%. Given the prominence and impact of cost overruns in residential buildings, it is crucial to address this issue promptly and effectively. Consequently, the primary objective of the present research is to thoroughly examine the role of Management techniques in mitigating cost overruns and identify the most efficient technique that can be employed in controlling such overruns, with a specific focus on Residential Projects in India. Through this investigation, valuable insights can be gained, which can contribute to the development of strategies and approaches that effectively manage cost overruns in the residential construction sector. The current study delves into the exploration of the application of various Management techniques in effectively controlling cost overruns specifically in the realm of residential construction projects.

Application of Business Information Management in Cross-border Real Estate Project Management

Cross-border real estate project management is inherently challenging due to its complexity and diversity. This study investigates the efficacy of business information management systems (BIMS) in managing such projects and employs machine learning models for performance prediction analysis. Utilizing data from 250 valid questionnaires and 15 in-depth interviews, multiple regression analysis, classification algorithms, and clustering analysis models were applied. The results indicate that system quality, information quality, and service quality significantly enhance project management efficiency and user satisfaction. Specifically, the adoption of BIMS reduces average project completion time and cost overrun rates, thereby improving management effectiveness. Commercial real estate projects reported the highest average investment at $70 million, mixed-use projects exhibited the longest average completion time of 25 months, and residential real estate projects achieved the highest management efficiency score, averaging 8.0. The regression model's coefficient of determination (R²) was 0.68, the classification model achieved an 85% accuracy in identifying risk factors, and clustering analysis categorized projects into high-efficiency management, risk-concentrated, and resource-intensive types. These findings underscore the substantial value of BIMS in cross-border real estate project management, providing robust management tools and decision support. However, the study's limitations include a small sample size and restricted data sources. Future research should aim to expand the sample size and incorporate more diverse data sources to enhance the findings' generalizability and accuracy.

Analyzing The Causes of Project Failure and Cost Overruns in Building Construction Industry by Using a Mixed-Methods Approach

This study investigated the reasons for project failures and cost overruns in building construction. The building construction industry is well known for chronic issues such as fragmentation, cost overruns, poor working conditions, and insufficient quality, all of which result in project failure. Project failure and cost are the two most essential indicators of success in a construction project because they have an equal impact on all project participants, both favorably and negatively. These problems have been evident for many years across the global construction industry, requiring the identification of the primary causes to address these challenges. The use of both quantitative and qualitative approaches was important, as it made it easier to accomplish the overall goal of solving the problem because quantitative data were collected via surveys and qualitative data were collected through interviews. Data was gathered from 104 team members in Pakistan's building construction industry. The top five reasons for project failure were poor project management, poor design, frequent design changes, design errors, bureaucracy, corruption, poor quality, and poor site management. The top five reasons for cost overruns were poor start-up planning, poor project cost estimation, poor weather conditions, political situations, and the economic instability of the country. Minimizing these factors can contribute to a greater probability of project success and overall improvement in the construction industry.

Underpinning risk dimensions of sponsored institutional R&D projects through cutting-edge fuzzy TOPSIS and fuzzy DEMATEL approaches

PurposeThis study aims to enhance the success of Sponsored Institutional R&D Projects (SIRPs) by investigating the influence of risk dimensions over four criteria Cost overrun, Time overrun, Schedule overrun, and Quality of projects. The study identifies risk dimensions and prioritizes and explores causal relationships to guide risk mitigation strategies during project execution.Design/methodology/approachThis study was conducted with qualitative data obtained through a systematic questionnaire from 10 domain experts associated with SIRPs. Through an extensive literature review, the study identifies the ten risk dimensions, Fuzzy TOPSIS was employed for prioritizing the explored risk dimensions and Fuzzy DEMATEL explored the qualitative causal relationships among these dimensions. The sensitivity analysis was conducted to validate the robustness of findings by adjusting the weightage assigned to experts.FindingsThe findings reveal financial risk as the highest ranked and business risk as the least influential among identified dimensions. The study also highlights management risk as the most significant, followed by business risk and sensitivity analysis concludes that the findings are robust, lacking significant judgment bias.Research limitations/implicationsThis study contributes to risk management strategies for SIRPs, to ensure timely completion within the allocated budget. The findings of the study can be implemented in other such SIRPs. The study also informs funding agencies' policies and project monitoring mechanisms and advancing project management practicesOriginality/valueIts originality lies in being the first to systematically identify and prioritize risk dimensions, adding significant value to SIRP management and academic discourse on project management and risk analysis.

Project Delay And Cost Overrun in Software Industry in the Kingdom of Saudi Arabia: The Powerful Role of GQM

Background: Given the enormous impact that the software industry has on so many facets of our lives today, software projects are extremely important. Digital transformation is driven across industries by software developments. They facilitate the utilisation of technology by organisations to optimise operations, augment productivity, and provide inventive products and services. To be competitive and adjust to the quickly changing market dynamics of today's world, companies must undergo digital transformation by making full use of software projects. Objectives: The main aim of the current study is to determine the main causes of project delay and cost overrun in software projects, identify the effects of project delay and cost overrun on software projects, and define the role of cost estimation models in overcoming project delays and cost overruns in these projects. Results and conclusions:The researcher reviews the literature on causes behind delay and cost overrun and describes the role that can be played by cost estimation models in that process. In light of the reviewed literature, the researcher reaches certain recommendations for the software industry.

Impact of Project Management Practices on Cost and Time Overruns in Construction Projects in Nigeria

A major contributor to economic growth in Nigeria, the construction sector is frequently beset by large cost and schedule overruns that jeopardize project profitability and impede the development of infrastructure. This study looks into how project management techniques affect these overruns in building construction projects in Nigeria. The goal of the study is to pinpoint the major project management variables that lead to overspending and delays while also offering recommendations for best practices to address these problems. A mixed-methods strategy was used, integrating qualitative case studies with quantitative data analysis. Project engineers, contractors, Architects, and Technicians were given standardized questionnaires to complete about a variety of Nigerian building projects. In-depth interviews and focus groups were also held to acquire a deeper understanding of the real-world difficulties and experiences encountered in the field. The study pinpoints several crucial project management techniques that affect time and cost performance. The results show that Inadequate construction site management and supervision ranked 1st with an RII of 0.7877, Improper construction techniques and lack of experience of the consultant came 2nd and 3rd with RII of 0.7215 and 0.7213 respectively. Late payments during work progress and Use of improper equipment are contributors to project time overrun; while, factors affecting cost overrun are fluctuation in building material costs ranked 1st with RII of 0.7354, frequent design changes, (0.7138), omissions and errors in bills of quantities (0.6754), import of construction materials (0.6754). The report suggests enhancing project management through effective resource management techniques, ongoing training and certification programs, and implementing advanced technology to improve communication, resource management, and planning precision, contributing to sustainable growth in Nigeria's construction industry. Keywords: stakeholder management, construction sector, project management, major contributor

An approach to support reference class forecasting when adequate project data are unavailable

This study presents an approach to enhance the effectiveness of Reference Class Forecasting (RCF) in managing cost overruns in large infrastructure projects. RCF performs poorly when adequate reference classes are unavailable. The proposed approach addresses this limitation by adapting reference classes using empirical weights, allowing for the use of diverse and previously unsuitable reference data. The contribution of this study is the development of a simple, accessible approach for RCF application in scenarios with limited reference data. This approach is validated through practical examples, showing its potential to yield more accurate RCF reference classes compared to traditional practices. This research enhances RCF's utility by providing a potential solution for its primary limitation: the accurate definition of reference classes when data is scarce. It opens new avenues for RCF application for projects where reference data was not available.

External quality assurance of cost estimates in major public projects: empirical evidence on cost performance

PurposeValue creation for society from public projects requires that the overall benefits exceed the use of taxpayers' money. At the same time, cost overruns in public projects are a well-documented feature in the literature, but practical guidance on reducing the extent and magnitude of overruns is rare. In 2000, Norway introduced a governance regime that includes mandatory external quality assurance (QA) of cost estimates for major public projects. This paper compares the cost performance of public projects on each side of this QA scheme.Design/methodology/approachWe use an original dataset covering 1,704 projects from 2000 to 2021, reported first-hand from Norwegian public agencies. We apply quantitative methods in the form of descriptive statistics, regression models, and statistical testing of hypotheses to answer our research questions.FindingsThe mean cost overrun across projects in our dataset is smaller than several previous international studies have reported. We find no statistical support for different cost performances between QA and non-QA projects. Secondly, cost overruns seem to vary between different public sectors. A third finding is a small development with lower cost overruns over time for the non-QA projects, and we raise the question of whether the QA scheme has contributed to overall learning effects. The fourth finding is that cost deviations are quite independent of project size.Originality/valueThe paper offers novel insights for decision-makers and researchers on the effects of external quality assurance on cost performance in public projects.

Building Information Modeling Capability in Mitigating Change Orders and Cost Overrun

The Jordanian construction industry faces notable challenges, particularly about variation orders (VOs), contributing to budget overruns and project delays. The Jordan Engineers Association poll in 2020 found that variation orders (VOs) accounted for 23% of cost overruns in construction projects in Jordan. Research undertaken by the Ministry of Public Works and Housing in 2019 found an average of 948 change orders per year, representing 25.5% of the total value of the projects. Our study introduces a highly tailored evaluation method to gauge the effectiveness of Building Information Modelling (BIM) in addressing these challenges. The study assesses the efficacy of Building Information Modeling (BIM) in diminishing variation orders (VOs) by examining sophisticated BIM functionalities. The study employs an intricate case study and diverse construction project data to construct a model that assesses the capacity of BIM to reduce project modifications and enhance cost efficiency. A novel approach has been devised to enhance the optimization of building information modeling (BIM) in the construction industry of Amman, Jordan. The objective of the concept is to minimize variation orders (VOs) and enhance project management. The study employs research approaches, such as semi-structured interviews and questionnaires, to pinpoint the essential abilities contributing to change orders. After comprehensively analyzing BIM's global and Middle Eastern applications, we created the model. The findings indicate that enhancing Building Information Modeling (BIM) capabilities can effectively mitigate the occurrence of variation orders within Jordan's building sector. The approach promotes the cooperation of stakeholders, sets quantifiable benchmarks, and strategically employs BIM for preliminary risk assessment. This research substantially enhances the productivity and cost-effectiveness of construction projects in Jordan, offering vital insights for professionals and policymakers.

Development of a Framework for BIM Implementation in the Zambian AEC Industry

The Architecture, Engineering, and Construction (AEC) sector in Zambia is crucial for economic growth yet faces challenges like project delays and cost overruns. Building Information Modelling (BIM) has emerged as a solution. This research aims to develop a comprehensive framework to enhance BIM implementation in Zambia's AEC industry. Using mixed-methods research, including surveys and interviews with stakeholders, the study found that BIM is not widely practiced due to factors like limited awareness and high costs. However, there is willingness to adopt it. The proposed framework offers a roadmap for successful BIM adoption and implementation, emphasizing awareness programs, government partnerships with technology providers, and small-scale pilot projects. An evaluation system is recommended for monitoring progress. This approach aims to improve collaboration, effectiveness, and competitiveness in Zambia's AEC industry.

Shipment lead time hedging and coordination in prefabricated construction supply chain

This paper aims to coordinate a shipment lead time hedging (SLTH) problem between a building contractor and a logistics provider in the prefabricated construction supply chain (PCSC). In the PCSC, untimely (early or late) delivery of prefabs can lead to project time and cost overruns. To mitigate this challenge, the building contractor requires the logistics provider to reduce the shipping time variability, which is termed the SLTH strategy. While this benefits the building contractor, it also puts more investment and operational pressures on the logistics provider. To solve this conflict, we introduce a coordination mechanism which involves two terms: an SLTH level related cost term is charged by the logistics provider to the building contractor, and a constant transfer term is adopted to fairly allocate the system surplus. Three decentralized models are investigated: i.e., two Stackelberg game models with alternative decision-making sequences and an equal power model. Further comparative analysis and numerical studies reveal that our proposed coordination mechanism increases the SLTH level and ensures a win–win situation. Moreover, some interesting managerial implications are derived.

A Comprehensive Review of the Impact of Perceived Power Sector Instability on Foreign Partnerships in the Nigerian Construction Industry

The study explores the impact of perceived instability in Nigeria's power sector on the construction industry. The emerging economy has seen significant growth, attracting foreign investments for infrastructural development. However, persistent challenges and perceived instability raise concerns about reliability and sustainability. Key factors include power outages frequency, power supply adequacy, and regulatory responsiveness. The study also examines the correlation between power sector stability and investment climate, considering factors like project delays, cost overruns, and financing impacts. The findings aim to contribute to a better understanding of the dynamics between perceived power sector instability and foreign investments in the construction industry and propose policy recommendations to foster a more sustainable and resilient investment environment. Keywords: Power Sector, perceived power Instability, Foreign Investment, Construction Industry, Infrastructure Development, Regulatory Framework.

Advancements and innovations in requirements elicitation: Developing a comprehensive conceptual model

Requirements elicitation is a crucial phase in the software development lifecycle, ensuring that stakeholders' needs are understood and translated into system specifications. Traditional methods often face challenges such as ambiguity, inconsistency, and evolving requirements, leading to project delays and cost overruns. This review proposes a conceptual model that integrates advancements and innovations in requirements elicitation to address these challenges comprehensively. The proposed model leverages various techniques, including but not limited to, natural language processing (NLP), machine learning (ML), and human-computer interaction (HCI), to enhance the accuracy and efficiency of requirements elicitation. NLP techniques enable automated analysis of textual requirements documents, extracting key information and identifying implicit requirements. ML algorithms facilitate the prediction of potential changes in requirements based on historical data and project context, enabling proactive management of evolving requirements. Moreover, the integration of HCI principles in the requirements elicitation process enhances stakeholder engagement and collaboration. Interactive interfaces and visualization tools enable stakeholders to provide feedback in real-time, fostering a more iterative and participatory approach to requirement gathering. Additionally, techniques such as prototyping and simulation facilitate early validation of requirements, reducing the risk of misinterpretation and ensuring alignment with stakeholders' expectations. Furthermore, the proposed model emphasizes the importance of context-awareness in requirements elicitation. By considering the organizational, cultural, and environmental context of a project, the model adapts its elicitation strategies and techniques to suit specific needs and constraints. Context-awareness also enables the identification of implicit requirements that may not be explicitly stated but are crucial for the success of the system. The model also addresses the challenge of managing conflicting requirements by introducing a systematic approach to requirements prioritization and negotiation. By employing multi-criteria decision-making techniques, stakeholders can collaboratively prioritize requirements based on their importance, feasibility, and impact on project objectives. Conflict resolution mechanisms facilitate consensus-building and trade-off analysis, ensuring that the final set of requirements reflects the collective interests of all stakeholders. Additionally, the proposed model emphasizes the iterative nature of requirements elicitation, advocating for continuous refinement and validation of requirements throughout the development lifecycle. Feedback loops enable stakeholders to review and revise requirements based on evolving needs and changing circumstances, thereby enhancing the adaptability and resilience of the system. The conceptual model presented in this review represents a holistic approach to requirements elicitation, leveraging advancements and innovations in technology, human interaction, and context-awareness. By integrating these elements, the model aims to enhance the accuracy, efficiency, and stakeholder satisfaction in the requirements elicitation process, ultimately contributing to the successful delivery of high-quality software systems.

BIM to BREEAM: A workflow for automated daylighting assessment of existing buildings

By conducting an assessment of the existing building stock from the perspective of the Green Building Certification System (GBCS), it is possible to contribute to the improvement of energy utilization and reduction of greenhouse gas emissions as promoted through the Renovation Wave strategy by the European Union. These aspirations will simultaneously contribute to enhancing human well-being, indoor environmental quality, and comfort. This paper describes a novel methodology for enhancing the renovation of existing buildings at the design stage using automation within the Building Information Modeling (BIM) environment. By parameterizing the requirements of GBCS using a visual programming tool, real-time insight into the number of achieved certain issue credits in the certification process is enabled. It was also created to enable designers in the Architecture, Engineering, Construction, and Operations (AECO) sector to continuously monitor the development of design and make modifications as early as possible in the design process. Thus, cost overruns in design projects, as well as later renovations and building maintenance, are prevented. This research has utilized the capability of BIM to perform rapid compliance simulations with Building Research Establishment Environmental Assessment Method (BREEAM) requirements without the need for manual calculations and/or computer simulations in other software, which would increase the time required for analysis due to additional modeling requirements. The methodology is demonstrated using the automation of the Daylighting section of the issue Hea01 Visual Comfort from the Technical Manual SD225 1.4 − BREEAM International Non-Domestic Refurbishment 2015, and the validation was performed on a BIM model of an existing building belonging to the educational sector. The application of the described methodology in the case study reduced the time required for assessing the number of achieved daylighting credits by 40%, with potential savings extending up to 80% depending on the chosen criteria for analysis. The tool is designed to be applicable to other GBCS, building types, and newly designed buildings as well.

An integrated approach to investigate the causes of time delays and cost overruns in Afghanistan construction projects

This study employs an integrated approach of questionnaire survey and case studies to identify the key factors contributing to time delays and cost overruns in construction projects in Afghanistan. Initially, a comprehensive list of 78 factors was compiled and evaluated through a questionnaire survey. Based on the survey findings, the topmost critical factors are security issues, variation in quantities and extra works, corruption and bribery, improper project feasibility study, and adverse weather conditions. Subsequently, ten case studies were conducted to validate the questionnaire findings, revealing a higher prevalence of time delays over cost overruns and uncovering additional influential factors. Importantly, the study highlights the significance of security concerns and instances of corruption and bribery in Afghanistan compared to other regions. The findings of this research offer valuable insights to project stakeholders and policymakers in improving project success rates and mitigating time delays and cost overruns.

Unveiling Effectiveness of Lean Construction Practices: A Comprehensive Study through Surveys and Case Studies

Construction projects frequently encounter challenges such as stagnant productivity, excessive waste, cost overruns, and delays, contributing to sustainability issues. In response to these issues, Lean Construction (LC) has emerged as a methodology aimed at eradicating inefficiencies and wasteful practices. However, the construction industry has been slow to embrace LC, primarily due to a lack of comprehensive evaluations regarding its real-world effectiveness. This study seeks to thoroughly assess the effectiveness of LC when implemented in construction projects in Pakistan. The research involved conducting a survey among experts in the construction industry, utilizing a comprehensive questionnaire to evaluate the extent of LC adoption and its impact on construction project performance. The collected data underwent rigorous statistical analysis to ascertain the influence of LC practices on project outcomes. To validate the survey results, the study selected five case study projects for in-depth analysis. These case studies assessed how well the projects adhered to LC principles and examined the resulting effects on project delays, cost overruns, quality issues, rework, and health-related concerns. The findings consistently confirmed that a higher level of adherence to LC principles led to significant reductions in project delays, cost overruns, quality issues, and health-related problems. This analysis strongly supports the notion that a more extensive adoption of LC practices results in substantial improvements in project performance. By presenting these compelling results, this study offers valuable insights to the construction industry, providing a clearer path for the effective integration of LC practices. Doi: 10.28991/CEJ-2024-010-04-09 Full Text: PDF