Project Cost Overruns Research Articles

Modified Mamdani-fuzzy inference system for predicting the cost overrun of construction projects

Cost overruns are a common worldwide problem in the construction industry; improved proactive risk management and cost control are much needed. Several models have been proposed, but all have weaknesses, particularly in data demands and the severity of critical risks or uncertainties associated with expert judgment. In response, this study develops a new 3-part model based on the Mamdani-type fuzzy inference system (FIS) to predict the cost overrun of construction projects. The first part assesses the weight of each expert, evaluating the severity of cost overrun factors. The second part contains a list of 40 in-built cost overrun factors and their degree of severity, while the third part establishes the relationships of every factor’s occurrence probability and severity to predict the cost overrun of a specific project. The severity of each factor is assessed based on a survey of 31 randomly selected experts in the Saudi Arabian construction industry. The model is demonstrated on two completed projects in Saudi Arabia. For each project, this involves a group of project-based experts rating the probability of occurrence of each factor on that project and applying this to the factor severity list to obtain a predicted cost overrun (PCO) for the whole project. The model is validated for robustness by sensitivity analysis comparing the predicted and actual whole project cost overrun and shown to be of practical value in assessing critical risks and predicting the likely amount of cost overrun. The model is equally applicable in the early project stages.

Using extreme gradient boosting (XGBoost) machine learning to predict construction cost overruns

Continuously, cost overruns in construction projects, as a leading cause of project failure, have been attracting more and more attention among construction stakeholders. Notably, cost overrun prediction model development can help identify factors that lead to cost overruns, thereby substantially improving cost estimates. Meanwhile, a machine learning application on archival data to estimate construction cost overrun is still in development. Motivated by this, we applied an Extreme Gradient Boosting (XGBoost) machine to analyze historical data of construction projects in Ghana completed between 2016 and 2018. The comparison between the actual and predicted cost yielded a good model prediction. The RMSE, MSE, MAE, and MAPE values are 0.202, 0.041, 0.069, and 0.306, respectively. To visually explain the importance of each feature for cost overrun prediction, we used SHAP values to illustrate the effect of each feature for model interpretability. According to SHAP ranking, we discover that the initial contract amount, the number of storeys, scope changes, and the initial duration are the variables that most accurately predict project completion costs and cost overruns. This research explores an innovative way to understand and evaluate essential variables that can help develop a prediction model of cost overruns that could aid the construction industry’s cost estimation.

Investigating ground-related design deficiencies as potential triggers to cost overruns in highway projects

Purpose This study aims to investigate ground-related design deficiencies as potential avenues of avoidable cost overruns, discernible from the geotechnical practices of highway agencies in the Niger Delta region of Nigeria. Design/methodology/approach The study deploys an interpretivist qualitative methodology to provide a detailed descriptive analysis of the design-related geotechnical practices of highway agencies during the pre-contract phase of highway projects. Semi-structured interviews were conducted with in-house professionals, consultants and contractors affiliated with the three highway agencies in the Niger Delta and thematically analysed to identify significant deviations from geotechnical best practices. Findings The study outcome shows that during the pre-contract phase, a chain of design-related geotechnical shortcomings has plagued highway projects executed in the Niger Delta. This view of practice uncovered in this study demonstrates a culture of significant deviation from best practice recommendations, which could plausibly contribute to the history of significant project cost overruns recorded in the region. Originality/value The study qualitatively spotlights gaps in the practice of highway agencies and reinforces the need for a re-orientation of the attitude to risk management, to give geotechnical concerns a priority in the financial management of highway projects executed in the Niger Delta region of Nigeria.

Challenges in Early Verification and Validation of System Requirements

ABSTRACTToday, requirements engineering (RE) is a key process in the development of complex systems‐(ISO/IEC/IEEE 2015). Requirements containing quality issues such as ambiguity or inconsistency can lead to late error detection in systems design, resulting in high project cost overruns. This paper presents challenges for early system requirements verification and validation associated to an executable model‐based requirements engineering (eMBRE) process proposal.

Risk Factors for Time and Cost Overruns of Pipeline Projects in Saudi Arabia

Evaluating risks is crucial for the smooth execution of pipeline projects. In Saudi Arabia, pipeline building projects frequently experience delays and cost overruns. This study tries to identify these risk factors. Thus, risk factors were collected from the literature and presented to four experts to identify the 26 most common factors for pipeline construction in Saudi Arabia. The risk factors were then assessed using a questionnaire to measure the degree of impact of the 26 factors by 135 participants. Partial least square structure equation model (PLS-SEM) and relative importance index (RII) methods were utilized to rank the significant factors after performing the reliability and discriminant validity of the questionnaire data. The findings show that the top five factors based on PLS-SEM were discrepancy between implementation requirements and specifications, financial failure/bankruptcy, poor pipeline material quality, supplying invalid materials, and weak ability to identify and monitor the threats. The ranking of the factors using PLS-SEM is different in the RII method. This difference is due to applying the Cronbach’s α formula in the two methods. The PLS-SEM computes the coefficients of the groups, while the RII computes the coefficients for all factors. The study results can assist pipeline project managers in identifying and ranking risk variables to efficiently utilize the limited financial and human resources available for the risk management.

Regulatory Guidelines and Production Planning Strategies for Biosimilars in the USA

At present, biosimilar projects are ruling the pharma market. This article aims to show that project management is crucialin developing biosimilars. Bad project management will give a bad reputation to the organization, project cost overruns, projectschedule delays, demotivation of the project team, sustainability risk to the organization, and more over huge loss. It is the main reasonmost companies are spending more on the training of employees, particularly on project management. Biosimilars are biologicalproducts that are highly similar to a reference product despite modest changes in therapeutically inactive components. Biosimilarshave no clinically significant changes in product safety, purity, or potency compared to the reference product. With the imminentpatent expiration of certain important high-cost biologics, biosimilar manufacture is becoming increasingly profitable for firms.However, the introduction of biosimilars necessitates the adoption of critical new rules. Because of the inherent differences involvedwith the production methods used by different companies and even different sites within the same company, the existing standardsthat regulate the approval pathways for generic pharmaceuticals are insufficient for biosimilars. Biosimilars are similar to but notidentical to the original. Due to the exclusive nature of the manufacturing line and the techniques employed by these competitors,basic variances in methodology may exist between competing organizations. Even modest variations in the manufacturing process canresult in micro heterogeneity, characterized by minor differences in molecular structure, stability, production cell line behavior, growthconditions, vectors, and purification methods. For these reasons, developing biosimilars takes a lot of work.1 CBER regulatesbiosimilars in the US Market. The reference Medicine's Patent status and market potential should be considered when developingbiosimilars. The main objective of this article is to show that the project management strategies and regulatory approval process areequally important to enter biosimilars into the market. Concerning quality in the project management of biosimilar products, budget,deadlines, and scopes are major constraints. A Gantt chart has been enacted to represent a graphical illustration of a schedule. Ganttchart helps to plan, coordinate, and track specific tasks in a project.

Structuring risks for a comprehensive understanding of cost overruns in power plant projects

Purpose Power plant projects are very complex and encounter serious cost overruns worldwide. Their cost overrun risks are not independent but interrelated in many cases, having structural relationships among each other. The purpose of this study is, therefore, to establish the complex structural relationships of risks involved. Design/methodology/approach In total, 76 published articles from the previous literature are reviewed using the content analysis method. Three risk networks in different phases of power plant projects are depicted based on literature review and case studies. The possible methods of solving these risk networks are also discussed. Findings The study finds critical cost overrun risks and develops risk networks for the procurement, civil and mechanical works of power plant projects. It identifies potential models to assess cost overrun risks based on the developed risk networks. The literature review also revealed some research gaps in the cost overrun risk management of power plants and similar infrastructure projects. Practical implications This study will assist project risk managers to understand the potential risks and their relationships to prevent and mitigate cost overruns for future power plant projects. It will also facilitate decision-makers developing a risk management framework and controlling projects’ cost overruns. Originality/value The study presents conceptual risk networks in different phases of power plant projects for comprehending the root causes of cost overruns. A comparative discussion of the relevant models available in the literature is presented, where their potential applications, limitations and further improvement areas are discussed to solve the developed risk networks for modeling cost overrun risks.

Factors Causing Time and Cost Overruns of Construction Projects in Malaysia

Cost overrun is a problem that the construction industry faces in many countries, including Malaysia. It is a significant problem in Malaysia because most Malaysian construction projects have seen cost overruns of between 5 and 10% of the overall contract sum. This study aims to look at the factors that could lead to time and cost overruns in Malaysian construction projects. This study's objective was accomplished by using a quantitative approach to gather data which involved the use of questionnaire surveys. The study employed a stratified random selection method for the collection of information from the contractors working in the Ipoh region who have a current registration with the Pusat Khidmat Kontraktor (PKK) and the Construction Industry Development Board (CIDB) and are mainly based in the city of Ipoh. The results showed that “lack of experiences of project type”, “delays in issuing information to the contractor during projects”, “improvements to standard drawings during construction”, “omissions and errors in the bills of quantities”, and “inaccurate quantity take-off” are the top 5 factors causing time and cost overrun in the city of Ipoh, Malaysia.

Enhancing US Software Companies' Competitive Edge with Agile Project Management

The primary purpose of this study was to examine how the adoption of Agile Project Management practices can help US-based software companies gain a competitive advantage in the rapidly evolving global marketplace. With ever-increasing customer demands and changing technology landscapes, it was crucial to assess whether agile methodologies could effectively address these challenges. The software industry in the USA faced challenges related to project delays, cost overruns, and difficulties in responding to changing customer requirements. Traditional project management approaches often proved inadequate in such dynamic environments. The study aimed to determine whether Agile Project Management could mitigate these issues and improve competitiveness. The research employed a mixed-methods approach. Quantitative data were collected through surveys distributed to software companies implementing agile practices. Qualitative insights were gathered through in-depth interviews with industry experts. Data analysis involved statistical techniques for quantitative data and thematic analysis for qualitative data. The findings revealed that Agile Project Management significantly improved software development processes. Agile adoption also fostered better collaboration among cross-functional teams. Moreover, Agile practices positively impacted software quality and customer satisfaction, ultimately contributing to a competitive edge. Based on the research findings, it can be concluded that Agile Project Management has a substantial positive impact on the competitiveness of US-based software companies. To enhance competitiveness, it is recommended that US software companies consider the adoption of Agile Project Management practices. Additionally, organizations should invest in training and cultural changes to facilitate a smooth transition to agile methodologies. Continuous improvement and alignment with agile principles are essential for sustained competitiveness. Keywords. Agile Project Management, Software Development, Competitiveness, Customer-Centric, US Software Companies

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.

Analysis of delays and cost overruns of road construction projects in the Colombian Caribbean Region

Construction projects are constantly threatened by delays and cost overruns that might compromise their viability. Th us, identifying the leading causes of these issues based on the experience of experienced professionals is essential to planning and reducing these risks. This research evaluates the frequency and severity of variables causing delays and cost overruns in Colombian Caribbean Region road projects. Th e nine causes studied in this research were defined through a literature review, preliminary discussion and a pilot test. A survey directed to 42 road construction engineers allowed the authors to characterise these professionals’ perceptions regarding the frequency and severity of these variables in terms of delay and cost overruns, with a confi dence level of 80%. Statistical analyses were applied to the results of the survey to establish which variables generate the most signifi cant impacts when building roads and related works in the Colombian Caribbean Region

The potential of new models of construction procurement to counter cost overruns in construction projects: an exploratory study from a contractors’ perspective

PurposeCost overrun is a significant issue in construction, an undesirable feature the industry has long been associated with. Poor procurement practices are often blamed for subsequent cost overruns in construction, especially with conventional procurement methods leading to outrageous cost overruns. The purpose of this study is to review the features of the new models of construction procurement (NMCP) and assess their potential to reduce cost overruns in construction projects.Design/methodology/approachA literature review was conducted to identify the issues of procurement leading to cost escalations. Primary data were obtained through exploratory, semi-structured interviews using a case study approach.FindingsClients’ lack of knowledge was highlighted as a key issue in procurement that interlinks with many factors causing cost escalation. The findings suggest that the features contained within the NMCP, such as early contractor involvement and collaboration throughout the project team, have the potential to make a positive contribution to addressing cost escalation in construction.Research limitations/implicationsThe primary research was undertaken as an exploratory study and presents the contractor's perspective. Further research is therefore suggested, with multiple organisations representing all key stakeholders in a construction project, including clients, consultants, sub-contractors and suppliers.Practical implicationsThe study recommends awareness of the NMCP be raised throughout the industry, and simplified information must be made available to help widen uptake of these contemporary procurement methods.Originality/valueAddressing the dearth of research concerning the use of NMCP within the industry, this study makes a niche contribution to the body of knowledge on construction cost management by illustrating the potential offered by these new procurement methods for addressing cost escalation. For an industry where collaboration is accepted with reservations, this case study demonstrates how novel collaborative strategies such as open book costing, project bank accounts and shared pain and gain mechanisms can be implemented as part of the procurement strategy and how such strategies can contribute towards minimising the cost escalation inherent in construction projects.

A Proposed Technical Debt Management Approach Applied on Software Projects in Egypt

Technical Debt (TD) is a metaphor that can be described as the technical issues that are hidden from end users and customers, but in fact hinder the development efforts during system evolution and future enhancements. Due to tight budgets and timelines, TD is frequently incurred, which may lead to technical, financial, and quality issues that make future maintenance more costly or impossible. While business professionals concentrate on external issues related to customer satisfaction, in fact they rarely pay attention to internal software quality defects and maintenance, which would rather cause future interest payments. In this research study, we propose a TD management (TDM) approach with best practices developed using Design Science Research (DSR) and conducted with multiple case studies for the software development team in Small and Medium Enterprises (SMEs). The study demonstrates that the proposed approach for measuring the impact of internal / external software quality leads to increased awareness of TD’s occurrence and thereby provides processes for preventing, identifying, prioritizing, monitoring, and repaying TD to satisfy both customer value and technical requirements, along with halting project failures and cost overruns. In actuality, applying our proposed TDM approach leads to a deeper comprehension of TD contraction in selected software companies, improved team morale and motivation, as well as an enhancement in its maintainability.

Causes of time and cost overruns in construction projects: a scoping review

This scoping review aims to enhance construction project management practices by identifying the key factors contributing to time and cost overruns. More than 300 articles were studied, out of which 73 were relevant to this review scope. Following the methodological recommendations proposed by the Joanna Briggs Institute (JBI) and the PRISMA checklist, this scoping review explores research trends regarding the geographical and temporal contexts, the nature of projects analyzed, the research approach, and the main causes of time and cost overruns. Moreover, current research gaps within the field have been identified. Findings suggest that the volume and breadth of research on causes of time and cost overruns have grown over the years. Regarding geographical contexts, Asia and Africa have consistently contributed to the literature, while a notable absence of research is observed in Europe, America, and Oceania. In addition, a tendency among articles to replicate research approaches and methods has been identified. Lastly, this study reveals that the project execution phase emerges as the primary stage where cost and time deviations occur, emphasizing the crucial role of project management practitioners. Hence, results attest to the critical role of prioritizing more effective project management practices to mitigate unexpected time and cost overruns in construction projects.

Identifying Factors Influencing Time and Cost Overruns in Public Construction Projects in Bhutan

Construction industries worldwide are impacted by time and cost overruns, resulting in significant financial loss and failure to complete projects on time. Clients, contractors, and consultants can plan properly for public construction projects if they have a better understanding of cost and time overruns. The Construction Development Board (now Bhutan Construction and Transport Authority) is the lead agency regulating and overseeing the government construction projects in Bhutan. However, in recent four years, from July 2017 to June 2021, about 50% of the total 2111 government construction projects experienced time and cost overruns, and the total financial loss was Nu. 2,578.86 million. Therefore, study was designed to examine the factors causing delays and cost escalations in the construction project implemented by government during the financial year July 2017 to June 2021. Thus, this study explores identifying factors influencing time and cost overruns to avoid time delays and financial losses. The primary data was collected through the questionnaire survey from engineers of 20 Dzongkhags and 4 Thromdes. The secondary data was collected from the CDB's annual reports, the Construction Association of Bhutan (CAB), and the National Statistics Bureau (NSB). The data was analyzed using the descriptive statistics method, and the relative importance index (RII) was calculated to rank the factors identified from literature reviews. The research results show that financial issue was the critical factor causing delays and cost escalation in the government construction project in Bhutan. Followed by the issue of delays and cost overruns due to shortage of local construction materials, inadequate experience of the contractor, poor site planning, shortage of skilled workers, unrealistic schedule, design change, contractual issues, and project manager competence.

Cost and Time Over Run in Construction Projects

Abstract: Construction industry is one of the biggest and fast-growing industry in India which is providing employment to millions of people and also contributing for economic development of nation. But the major and common problem faced by this industry is cost overrun and time overrun. Therefore, there is need to study this topic. This research paper will help to understand cost and time overrun in construction project. Hence the main aim of these paper is to identify the factors affecting cost overrun and time overrun in construction project and provide suitable strategies to avoid it. Method used in this research is both quantitative and qualitative method. Interviews were taken from some of the experienced professionals in this industry and questionnaire survey is conducted to collect data from the respondent from contractor, consultant, clients and students. Total 81 respondent participated in the survey. From the result it is seen that for estimating cost, 73% respondent and for estimating time, 89% respondent use combination of calculation and experience. From the study it is also understood that the problem of cost and time control is not only about the techniques being used it is also about the poor management of techniques and poor supervision. Cost overrun refers to when project goes beyond the estimated cost and factors affecting cost overrun is Poor Estimate, Design changes, Scope creep, Delays, Inflation, Poor project management, Unforeseen site conditions, Material and labour cost fluctuations and Contractual disputes. Time overrun is when project get delayed beyond estimated schedule and factors affecting time overrun is Project Planning, Design Changes, Weather Conditions, Workforce Productivity, Unforeseen Conditions, Regulatory and Permitting Issues, Coordination and Communication. Based on this recommendation were given with some strategies to avoid cost and time overrun in construction projects they are Accurate cost estimation, Risk assessment, Effective project management, change management and Communication. Further research is required in project control providing a checklist for the same, so that major points can be taken care of

Appropriate budget contingency determination for construction projects: State-of-the-art

Contingency is a critical component in the cost estimation process for any construction project. The contingency reserve considers potential costs related to risks and uncertainties associated with construction projects. It is usually assumed to damp any resulting uncertain monetary impact and to prevent project cost overrun. Many contingency calculation methods for construction projects proposed in literature ranged from simple percentage to complex mathematical methods. Deciding the optimum contingency method for a given project at a given phase represents the main challenge in cost estimation process. This study presents a comprehensive compilation of all contingency calculation methods and divided them into three main groups: deterministic, probabilistic, and modern mathematical methods which have been discussed in details. Appropriate method for estimating contingency amount depends on many criteria such as project peculiarity, complexity, ease of method used, and the accuracy level of the estimates. This study proposed a practical guidance approach for construction agencies to choose their appropriate cost contingency method.This research is expected to help agencies/owners in the budget development stage to allocate a contingency budget for their construction projects.

Proposed Project Management Maturity: A Study Case of Incinerator Project Delivery in Indonesia

An Indonesian waste treatment plant manufacturer company experienced several issues related to delivery project of the product Incinerator. The issues occurred mainly resulted in the project delay and cost overruns, which potentially impacted negatively to the project success. A company performance of running project can be measured in the form of Project Management Maturity analysis, it is can be interpreted as an organization’s capability to manage projects successfully utilizing a standardized practice that has been improved and enhanced through time. The objectives of this research are to identify the root causes of the business issue, assessing the project management maturity of the company, formulate the proposed solutions, and developing the implementation plan. The assessment of the maturity level is done based on the PMBOK project management knowledge area that relevant to the business issue, namely Project Risk Management, Project Schedule Management, Project Resource Management, and Project Communications Management. The data analysis of this research involves gap analysis and root cause analysis. An analysis that related to the gaps between the existing condition and the next maturity level is conducted to identify the areas of improvement the company need to address. Furthermore, the root cause analysis is conducted to determine the root causes of the business issues. The result of the data analysis is then utilized to formulate the proposed solution for improvement and the implementation plan. The proposed solutions in this research are to develop a proper risk management practices and documentation, implement scope management, development of project scheduling, and improvement of project team management regarding the development of resource management and communications management.

Toward a Deeper Understanding of Optimism Bias and Transport Project Cost Overrun

There is a growing face-value acceptance of optimism bias as the primary cause of transport cost overruns. This article provides a timely review of literature on optimism bias and transport infrastructure project cost overruns. The article identifies significant gaps and unanswered questions about the relationship between optimism bias in project cost appraisal and cases of transport infrastructure cost overruns. The presence and nature of optimism bias in the complex institutional environment of project cost appraisal are largely understudied and not well understood. Consequently, this has significant implications for the development of effective mitigation strategies for improving transport project cost performance.

Research on Influencing Factors and Control Measures of Construction Cost Overrun in China's Expressway Projects

In China, the expressways have been built a lot over the past decade. The construction of the expressway suffers from usual cost overrun. There are many factors of different stakeholders influencing the construction cost of expressways, and it is difficult to control all of them. Therefore, it is necessary to identify the key factors causing expressway construction cost overrun and take corresponding cost control measures. In this article, decision-making trial and evaluation laboratory (DEMATEL), interpretative structural modeling method (ISM) and system dynamics (SD) are integrated as DEMATEL-ISM-SD method to identify the key driving factors of expressway construction cost overrun and simulate the interactions of these factors to find the cost control measures. A case in China has been selected as an example to demonstrate how to use the proposed method. As a result, six key factors from different stakeholders are found. Then, six corresponding measures are put forward. This study can provide guidance for expressway construction cost control.