Cost Overruns In Construction Projects Research Articles

Understanding Reasons for Cost Overruns in Construction Projects from Contractors' Standpoint

Understanding Reasons for Cost Overruns in Construction Projects from Contractors' Standpoint

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.

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.

Critical success factors for cost overrun minimization in public construction projects in developing countries: the case of Ghana

Purpose It is widely accepted that one criterion for determining if a construction project is successful is whether it is completed within the expected budget. There have been advancements in the management of building projects throughout time but cost overruns remain a key concern in the construction sector internationally, particularly in emerging economies such as Ghana. This study aims to answer the question, “What are the critical success factors (CSFs) that can assist reduce cost overruns in public sector infrastructure projects in the Ghanaian construction industry?” Design/methodology/approach This study used a quantitative survey method. The questionnaire was pre-tested by interviewing 15 contractors to ascertain the validity of the content. Factor analysis and multiple regression were adopted to analyze the data. Findings This study discovered that the critical factors that can reduce cost overruns in construction projects in Ghana are directly linked to five themes: early contractor involvement in the project planning stage, adequate funding, good project team relations, competent managers/supervisors and project participant incentives/bonuses. This study identifies indestructible, empirically measurable important success criteria for reducing cost overruns in public building projects in Ghana. Practical implications When well thought through from the project initiation stage to completion, these critical successes can also be used to deal with damaging economic effects such as allocative inefficiency of scarce resources, further delays, contractual disputes, claims and litigation, project failure and total abandonment. Originality/value The uniqueness of this research resides in the fact that it is, to the best of the authors’ knowledge, a first-of-its-kind investigation of the CSFs for reducing cost overruns in public building projects in developing countries.

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.

Evaluation of Cost Overrun in Construction Projects during COVID-19 Pandemic

Evaluation of Cost Overrun in Construction Projects during COVID-19 Pandemic

Rework investigation in residential building projects: Cost, factors and effects

AbstractThis article aims at investigating rework cost, factors and effects in residential building projects in the West Bank – Palestine. Questionnaire survey is used to collect and rank the main factors and effects of rework from consultants' and constructors' point of view. Respondents show that more than 80% of the projects completed with rework cost of value greater than 5% of the total project cost. Overall, respondents' view concludes that the top rework factors include: mistakes in design, unskilled labors, unqualified subcontractors, non-conformance with required specifications, and bid awarding policy. Respondents indicate that the main effects of rework are cost overrun, project time extension, material waste excess and profit reduction. Spearman correlation test concludes a good correlation between contractors and consultants in ranking of rework factors and effects. Data collected from 47 residential projects reveal a high rework impact on cost overrun in construction projects. The results of this study would be helpful for researchers and professionals to guide their efforts to minimize rework in construction projects and to improve projects outcomes in term of cost, time and quality.

Research on the Influencing Factors of Cost Overruns in Construction Projects

Research on the Influencing Factors of Cost Overruns in Construction Projects

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.

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.

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.

Using Machine Learning to Predict Cost Overruns in Construction Projects

Addressing the persistent issue of cost overruns in construction projects, our study explores the potential of machine learning algorithms for accurately predicting these overruns, utilizing an expansive set of project parameters. We draw a comparison between these innovative techniques and traditional cost estimation methods, unveiling the superior predictive accuracy of machine learning approaches. This research contributes to existing literature by presenting a data-driven, reliable strategy for anticipating and managing construction costs. Our findings have significant implications for project management, offering a path towards more efficient and financially sound practices in the construction industry. The improved prediction capabilities could revolutionize cost management, facilitating better planning, risk mitigation, and stakeholder satisfaction.

Factors Of Affecting The Occurrence Of Cost Overruns In Construction Projects During COVID-19 Pandemic

Construction project is a design and specification process that involves coordinating all project resources such as labor, equipment, materials, fund, and technology, to complete the project on time, according to budget and standards. But since 2020 due to the COVID-19 pandemic, many construction projects have experienced Cost Overruns, especially in the jabodetabek area. Cost Overrun is very influential on the success of a construction. Therefore, research is needed on ranking factors that influence the occurrence of Cost overruns on a construction project during the COVID-19 pandemic. In this study, data will be collected through literature studies, then surveyed using questionnaires a Likert scale, a scale of 1-5 then given to each construction service provider to measure the level of influence of factors and by Relative Importance Index (RII) method will find the ranking of factors that influence the occurrence of cost overruns. Of the 20 factors obtained after the validity and reliability test, 13 factors were obtained. Using the RII method sought rankings from the 13th of such factors. The result obtained is the lack of preparation for unexpected costs has the highest influence of 0.811.

Assessment of compressive strength of jet grouting by machine learning

Jet grouting is one of the most popular soil improvement techniques, but its design usually involves great uncertainties that can lead to economic cost overruns in construction projects. The high dispersion in the properties of the improved material leads to designers assuming a conservative, arbitrary and unjustified strength, which is even sometimes subjected to the results of the test fields. The present paper presents an approach for prediction of the uniaxial compressive strength (UCS) of jet grouting columns based on the analysis of several machine learning algorithms on a database of 854 results mainly collected from different research papers. The selected machine learning model (extremely randomized trees) relates the soil type and various parameters of the technique to the value of the compressive strength. Despite the complex mechanism that surrounds the jet grouting process, evidenced by the high dispersion and low correlation of the variables studied, the trained model allows to optimally predict the values of compressive strength with a significant improvement with respect to the existing works. Consequently, this work proposes for the first time a reliable and easily applicable approach for estimation of the compressive strength of jet grouting columns.

Dynamic Progress Monitoring of Masonry Construction through Mobile SLAM Mapping and As-Built Modeling

Traditional progress monitoring can be inaccurate and time-consuming, potentially causing time delay and cost overrun in construction projects. With development in technology, tools such as cameras, laser scanners, and building information modelling (BIM) have been used to overcome existing problems in the traditional approach. However, noise mitigation, extracting objects of interest from laser point clouds, and detailed progress measurement are problems that still exist. In this study a novel method of construction progress monitoring to measure the progress percentage is presented. The study integrates the simultaneous localization and mapping (SLAM) technique with as-built BIM to gather quick and accurate construction site progress information. The Hausdorff distance is utilized to extract objects of interest and filter out noise from site-scan data. As-built and as-planned BIM models are compared using Python and Dynamo, to obtain progress percentage. A case study was conducted on a residential building located in Sydney, Australia, to validate the application of the developed method. The outcome demonstrates that utilizing the SLAM technique and Hausdorff distance are effective in mitigating noise and extracting objects of interest from site-scan data, respectively. In addition, with an accuracy of 94.67 percent in estimation, the progress percentage was obtained based on material quantities. The obtained progress percentage could also be used in updating construction schedules and assisting decision-making.

Optimization of Factors that Critically Impact Time and Cost Overrun in Construction Projects

Abstract: The current study seeks to optimize the factors impacting the time and cost overrun in construction projects. The effect of widely identified factors of cost, time, quality, productivity, client satisfaction, environment, regulatory and community satisfaction and health and safety have been considered in this study. Data on the study variables were gathered from more than seventy construction projects stakeholders such as academia, engineers, contractors, real estate developers, architects, government official etc. using a standardized questionnaire. This paper focuses on use of relative importance index and statistical technique of ANOVA hypothesis to get an optimal solution of the factors that critically impact time and cost overrun in construction projects

Unearthing Causative Factors of Cost Overrun on Ghanaian Road Projects

When determining the success of a road project, cost is one of the most important variables to consider. This is because cost is the project’s backbone and driving force throughout the construction process. As a result, to assess the cost performance of a road project, the actual cost is compared to the planned cost. This research aims at uncovering the causal variables that contribute to cost overruns on road projects using Accra, Ghana as a case study. Relevant literature was thoroughly reviewed to extract identified factors. This study adopted a quantitative research approach, using a questionnaire developed to collect data from the target audience. The questionnaire survey was conducted using civil engineers and quantity surveyors working in the Ghanaian construction sector. The data that were retrieved were analysed using descriptive statistics and exploratory factor analysis. According to the findings, the main reasons driving cost overruns on road projects include consultant/ contractor-related, environment-related, economy-related, risk/uncertainty-related, technical-related, owner/client-related, and other project-related factors. It was determined that cost overruns in construction projects occurred because of a lack of professionalism on the part of the stakeholders engaged in the construction process from start to finish. Future research may therefore be conducted utilising all of Ghana’s regions to obtain a broad view of the research.

The moderating effect of project complexity on the relationship between organizational controls and cost estimation performance: A conceptual model

Cost overrun in construction projects is high and expected to rise. The improvement of cost estimation performance is vital as it provides a better chance for the construction projects to avoid cost blowouts. In this paper, an extensive literature review is conducted from online databases such as Web of Science, Scopus, and Google Scholar which focus on organization controls and its mechanisms to improve cost estimation performance in the construction industry. While many prior studies on cost estimation emphasized investigating cost estimation methods to improve the performance of cost estimation, less attention was given to organizational and project factors. Several studies have explored the effects of organizational control on performance but failed to include project complexity in the relationship between organizational controls and performance. Therefore, this paper conceptualizes the effect of organizational controls on cost estimation performance with project complexity as a moderator. This proposition suggests project complexity has advantages and disadvantages on organizational controls. Each control mechanism has its feature and effectiveness in high complexity projects. Hence, managers should select appropriate control mechanisms, such as input control and output control that have high effectiveness on the performance.

Indexing of Factors Affecting Time and Cost Overrun in Construction Projects

Abstract: In a construction project, time overrun occurs when the work specified in the contract is not executed within the specified time frame and when the entire project cost exceeds for whatever causes, this is referred to as cost overrun. This study aim to analyze these factors that cause above delays in construction projects. A total 47 such factors were identified and classified into 8 segments, which are then indexing by using the method Relative Importance Index (RII).