Showing papers on "Cost overrun published in 2013"

Cost Overruns and Failure in Project Management: Understanding the Roles of Key Stakeholders in Construction Projects

Abstract: The subject of poor cost performance has been widely published in the mainstream project and construction management literature. Nevertheless, the underlying responsibilities of the key stakeholders (clients, consultants, and contractors) in managing this chronic problem in the Australian construction industry remain unclear. By performing an in-depth analysis of the roles and responsibilities of these key stakeholders, this research is intended to unfold the industrywide perception of cost performance being heavily reliant on the contractor's performance alone. Based on a thorough literature review and relevant industry inputs, 73 attributes associated with cost performance were identified for investigation. Based on the relative importance weighing technique on 48 selected attributes, planning and scheduling deficiencies have the highest impact on cost performance from clients, consultants, and contractors' perspectives. Confirmatory factor analy- sis on the combined responses across all three groups suggests that robust control procedures and adequate programming, along with efficient design and effective site management, are the most critical factors. These factors are primarily associated with the responsibilities of contractors and consultants for managing cost overruns in projects. However, the client's responsibility in facilitating effective management of these factors within the project environment is crucial. Multivariate regression analysis performed on eight factors' scores highlighted the influence offive significant factors (p < 5%) on managing cost overruns. The findings are expected to abridge a significant knowledge gap by shifting the priorities in cost estimation and management practices across all industry sectors. DOI: 10.1061/(ASCE)CO.1943-7862 .0000621. © 2013 American Society of Civil Engineers.

Significant Factors Causing Cost Overruns in Large Construction Projects in Malaysia

Abstract: Once a construction projects fails in achieving effective cost performance, it will result to cost overruns. These overruns are caused from several factors which are very important to uncover for improving the cost performance. In Malaysia, not many research works have been carried out on studying cost performance factors. Hence, this study was conducted to identify the significant factors causing cost overrun in large construction projects in Malaysia. Questionnaire for the survey was developed based on 35 common factors of cost overrun identified from literature work. These factors were grouped in 7 categories and validated by interviewing five experienced personnel of construction industry. The feedback of from the survey resulted in receiving 262 sets of completed valid responses against 400 questionnaires distributed amongst contractors, consultants and clients involved in large construction projects. The data from the questionnaire was analyzed statistically. Relative importance index method was used for hierarchal assessment of factors and found that the top 3 most significant factors of cost overrun are fluctuation of prices of material, cash flow and financial difficulties faced by contractors and poor site management and supervision. These factors belong to two categories i.e., contractor's site management and financial management category, thus improvements in these categories are paramount for controlling cost overrun in construction projects.

Causes and Effects of Delays and Disruptions in Construction Projects in Tanzania

Abstract: Delays and disruptions are among the challenges faced in the course of executing construction projects. Delays as well as disruptions are sources of potential risks that current studies are looking into ways to manage such as technical, social, economic, legal, financial, resource, construction and commercial. The purpose of this research is to assess causes and effects and disruptions in construction projects. This study is descriptive, designed to obtain views from clients, consulting firms, regulatory boards and construction firms in regard to causes and effects of delays in construction projects. Two sampling techniques were used to select respondents namely: purposive and random sampling. Literature review, questionnaires and interviews techniques were used to collect data for the study. Findings reveal that the main causes of delays and disruptions are: design changes, delays in payment to contractors, information delays, funding problems, poor project management, compensation issues and disagreement on the valuation of work done. On the other hand, time overrun, cost overrun, negative social impact, idling resources and disputes are the main effects of delays and disruptions. The study concludes that there still exist a number of causes of delays and disruptions and their effects put construction projects at great risk that have an effect on their performance. It is therefore recommended that adequate construction budget, timely issuing of information, finalization of design and project management skills should be the main focus of the parties in project procurement process.

The Way Forward in Sustainable Construction: Issues and Challenges

Abstract: Construction industry is one of the most significant industries that contribute toward socio-economic growth especially to developing countries. The nature of the industry are fragmented, unique and complex which always face chronic problems like time overrun (70% of projects), cost overrun (average 14% of contract cost), and waste generation (approximately 10% of material cost). It is also regarded as one of the largest polluters to our environment. Traditional practices of construction process and management are found unable to control unprecedented challenges including the carbon emission issue. These challenges accent the need for practitioners to rethink and improve the construction process and technology. This shows that the construction industry has a major potential in the advancement of sustainable development by addressing issues related to the economic, social, and environment. By adopting sustainable construction, it can reduce the overall energy use and maximize potential for renewable energy supply, minimize waste, conserve water resources, enhance water quality, incorporate water sensitive design and minimize vulnerability to flooding, minimize polluting emissions to water, air and soil and minimize noise and light pollution.

Determining the Probability of Project Cost Overruns

Abstract: The statistical characteristics of cost overruns experienced from contract award in 276 Australian construction and engineering projects were analyzed The skewness and kurtosis values of the cost overruns are computed to determine if the empirical distribution of the data follows a normal distribution The Kolmogorov-Smirnov, Anderson-Darling, and chi-squared nonparametric tests are used to determine the goodness of fit of the selected probability distributions A three-parameter Frechet probability function is found to describe the behavior of cost overruns and provide the best overall distribution fit The Frechet distribution is then used to calculate the probability of a cost overrun being experienced The statistical characteristics of contract size and cost overruns were also analyzed The Cauchy (

Different Cost Performance: Different Determinants? The Case of Cost Overruns in Dutch Transportation Infrastructure Projects

Abstract: This paper examines three independent explanatory variables and their relation with cost overrun in order to decide whether this is different for Dutch infrastructure projects compared to worldwide findings. The three independent variables are project type (road, rail, and fixed link projects), project size (measured in terms of estimated costs) and the length of the project implementation phase. For Dutch projects, average cost overrun is 10.6% for rail, 18.6% for roads and 21.7% for fixed links. For project size, small Dutch projects have the largest average percentage cost overruns but in terms of total overrun, large projects have a larger share. The length of the implementation phase and especially the length of the pre-construction phase are important determinants of cost overruns in the Netherlands. With each additional year of pre-construction, percentage cost overrun increases by five percentage points. In contrast, the length of the construction phase has hardly any influence on cost overruns. This is an important contribution to current knowledge about cost overruns, because the period in which projects are most prone to cost overruns is narrowed down considerably, at least in the Netherlands. This means that period can be focused on to determine the causes and cures of overruns.

Analysis of non-excusable delay factors influencing contractors' performance in Lagos State, Nigeria

Abstract: Delays are one of the biggest problems faced by construction firms. The objectives of this study are to identify non-excusable delay factors, their effects on project completion and means of minimising these delays. A questionnaire survey was conducted to solicit the causes, effects and methods of minimising delays with two groups of respondents: consultants and contractors. Data were collected and analysed using a weighted mean method. A total of 57 major factors that cause non-excusable delays were identified from the reviewed literature and were further classified into eight major groups. The findings of this study revealed 20 key factors that cause non-excusable delays. The resultant effects of non- excusable delays are time overrun, cost overrun and disputes, among others. Ensuring adequate financial sources, engaging competent project managers and making all necessary resources available are some of the most important means of minimising non- excusable delays. Since non-excusable delays are specific to contractors, this study concludes that contractors should review their activities so that construction work will not be delayed.

Controlling Cost Overrun Factors in Construction Projects in Malaysia

Abstract: Poor cost performance in construction project is a common problem worldwide resulting in significant amount of cost overrun. This led us to explore the major contributors of cost overrun and propose mitigation measures to control cost overrun factors. Since, there were very few studies on cost issues in construction projects in Malaysia, hence this study was carried out in Malaysia using qualitative research method using semi-structured interview with experienced personnel's involved in handling construction projects. A total of 21 respondents from client, consultant and contractor organizations were interviewed and requested to evaluate the eight (8) categories of cost overrun factors determined from the author's previous work. Out of the eight categories of cost overrun factors, the respondents had ranked "contractor's site management" as most severe contributor of cost overrun and followed by "information and communication" category while the least severe category is financial management. Besides that the respondents are also requested to propose and classify mitigation measures for cost control according to suitable implementation strategies. This resulted in 15 proposals on mitigation measures and these were classified in three implementation strategies. The results indicated that among these 15 mitigation measures, five measures are classified as pro-active strategy and four measures are classified as organizational strategy. While other six measures are classified as fluid measures which can be adopted in more than one strategy.

Modeling Causes of Cost Overrun in Large Construction Projects with Partial Least Square-SEM Approach: Contractor's Perspective

Abstract: Construction cost overrun is a major problem faced by the construction industry globally and it needs serious attention to alleviate. Cost overrun is a result of one or combination of several causes which are very important to identify for effective cost performance. Current methodologies focusing on the identification of causes does not give the insight of underlying relationships between the causes. Hence, this study focused on studying the fundamental relationship between factors of cost overrun using Partial Least Square-SEM method. This is an advanced multivariate analysis technique for estimating and analyzing causal relationships in path models. Data collection was carried out with structured questionnaire survey amongst contractors involving in large construction projects in Malaysia. Hierarchal model for assessing causative factors and cost overrun was developed and analyzed using Smart PLS software of SEM and it was found that contractor's site management related factors had strong effect on cost overrun. The calculated Global Fit (GoF) Index of model was 0.405, which indicates that the developed model had substantial explaining power to represent the Malaysia construction industry focused of large construction projects. Hence, improvement in contractor's site management is the critical requirement to control construction cost overrun. Keywords: Construction

Comparison of preproject planning for green and conventional buildings

Abstract: The importance of green buildings has been frequently highlighted. However, barriers such as greater complexity, lack of understanding of sustainability, and the perception of a greater possibility of cost overrun have hindered the dissemination of green buildings. More planning efforts for green buildings can presumably help mitigate these barriers. This paper investigates preproject planning efforts for green and conventional building projects. Project-level data were collected (124 in total, 71 from conventional building projects and 53 from green building projects), with project data consisting of general information about the project, a Project Definition Rate Index (PDRI) survey, and cost performance. The project data were categorized into four groups based on their project type (green and conventional) and cost performance (actual cost on/under budget and over budget). For the four groups, a two-way analysis of variance test was used to compare the degree of preproject planning efforts meas...

Using Structural Equation Modelling to Assess Effects ofConstruction Resource Related Factors on Cost Overrun

Abstract: ost performance is the basic criteria for measuring success of any project. Since construction projects are highly dependable on resources, construction cost is significantly affected by various resource related factors. Compared to traditional methods of data analysis, Structural Equation Model (SEM) is the graphical equivalent of a mathematical representation to study relationship between dependant variable to explanatory variable. SEM is regarded as extension of standardized regression modelling and is important tool to estimate the causal relationship between factors. SEM functionality is better than other multivariate techniques including multiple regression, path analysis and factor analysis in analyzing the cause-effect relations between latent constructs. Since no study has estimated causal relations among resource factors and cost performance yet, hence this study adopted structural equation modelling to assess the effects of the resource related factors on project cost in the southern part of peninsular Malaysia. With 20 resource-related factor identified from literature, a theoretical model demonstrated how construction resources affect cost overrun. The model is tested using structural equation modelling technique with Partial Least Square (PLS) approach to SEM as PLS is dominant approach to establish rigor in complex models. A total of 159 data samples collected via structured questionnaire survey were used for estimation. Model estimation was carried out using SmartPLS 2.0 software. Results showed that approximately 47% of cost overrun was influence with resource related factors. Global Fit Index (GoF) value of the developed model is 0.517, indicating that the model has enough explaining power to generalize the phenomenon of Malaysian construction industry. Money (finance) related factors were found as most dominant factors causing cost overrun. The authors conclude that effective financial management can significantly improve the projects success and help in reducing the cost overrun

Risks Leading to Cost Overrun in Building Construction from Consultants’ Perspective

Abstract: This study aims at identifying the risk map for factors affecting cost overrun in building construction projects in the West Bank in Palestine from the consultants’ perspective. The field survey included 26 consultants. 41 factors are identified through literature review. The factors are divided into 5 groups. The analysis of the identified 41 factors indicates that 1 factor is located in the green zone, 14 factors are located in the yellow zone, and 26 factors are located in the red zone of the risk map. The results indicate that the top five affecting factors are: political situation, fluctuation of prices of materials, economic instability, currency exchange, and level of competitors. It is hoped that these findings will guide efforts to enhance the cost performance of construction industry. DOI 10.5592/otmcj.2013.2.5 Research paper Ibrahim Mahamid

Analysis of Cost Overrun Factors for Small Scale Construction Projects in Malaysia Using PLS-SEM Method

Abstract: This study investigated the effect of various factors affecting cost performance in achieving project success. Investigation was carried out with quantitative approach of questionnaire survey to understand the perception of practitioners involved in construction industry towards various factors in causing cost overrun. The targeted respondents were client, contractor, and consultant representative involved in handling small scale projects in Malaysia. A total of 54 completed responses were collected against 100 sets of questionnaire distributed. Collected questionnaires were analyzed with advance multivariate statistical approach of Partial Least Square Structural Equation Modeling (PLS-SEM). It modeled the relationship of various factors and their relative effects to cost overrun. Structural Model analysis results showed that the identified factors have overall substantial impact on cost overrun. This was assessed with convergent and discriminant validity test where R 2 value for the model is 0.71 which means that 71% variance extraction is resulted from investigated factors. Further, GoF value of the model achieved is 0.70 which shows that developed structural model has substantial power in explaining the factors of cost overrun in small scale projects of Malaysia. Amongst all the factors, contractor’s site management related factors are found as most significant factors. This indicated that for achieving better cost performance in small projects, contractors are required to improve their management related to the identified factors. Beside that, these findings will benefit parties involved in managinging cost performance of small scale construction projects.

Effects of Delay in construction Projects of Punjab-Pakistan: An Empirical Study

Abstract: The objective of the present study was to measure the effects of delay in construction projects like cost-overrun, time-overrun, litigation and project abandonment. Data on the study variables has been collected through structured questionnaire from 37 construction firms located in Punjab province of Pakistan. Participants were approached personally to collect the data. Various statistical tools such as reliability test, factor analysis, common method variance, normality test, Independent Sample T-test, One-Way ANOVA, correlation, computation of means and standard deviations and structural equation model have been applied for data analysis and inference. It is found that delay in construction projects significantly lead to cost overrun, time overrun, litigation and project abandonment. The findings of the study also provide significant insights to construction industry so that they may formulate strategies in order to avoid delay and its consequences. Moreover, the recommendations and limitations are discussed in the conclusion part of the study.

Prospects of Building Information Modeling (BIM) in Malaysian Construction Industry as Conflict Resolution Tool

Abstract: The construction industry of today’s world is becoming more challenging and the projects, on the other hand, are becoming more complex than before The projects in construction industry consume huge proportions of resources especially in-terms of financial resources Malaysian construction industry is also no exception to this challenging environment Different concepts and technology innovations have been developed to mitigate and rule out factors affecting the performance of the construction industry Building Information Modeling is one of them (BIM) The BIM technology helps building in a virtual environment prior to physical construction This objective of this study is to propose a model / frame work based on BIM technology which will allow reducing the potential adverse affects of delays, cost overrun, productivity, quality and other errors in the light of the available literature and past construction practices The paper highlights the challenging issues like construction delays, claims, design changes, delayed approvals etc Keywords: Building Information Modelling (BIM), Construction Industry, Construction delays, Claims, Malaysian Construction Industry

Effects of project’s physical characteristics on cost deviation in road construction

Abstract: This study is conducted to investigate the effect of projects’ physical characteristics on cost deviation in road construction using data from road construction projects awarded in the West Bank – Palestine over the years 2007–2010. The study is based on a sample of 74 road construction projects. Based on these data, regression models are developed. A questionnaire survey is also conducted to determine the impact of projects’ physical characteristics on cost deviation in road construction. The questionnaire survey included 14 owners, 30 contractors, and 25 consultants. The considered characteristics are: project size (i.e. small, medium, and large), estimated cost, road length, road width, terrain conditions, soil and rock suitability, and soil and rock drill ability. The results reveal that the average of cost deviation in road construction is 16.73%, ranging from −20.33% to 56.01%. The correlation between cost deviation in road construction projects and the above mentioned parameters is investigated.

Analysis of Factors Influencing Time and Cost Overruns on Construction Projects in South Eastern Nigeria

Abstract: This study identifies and examines the factors influencing time and cost overruns on construction project in the south eastern Nigeria. The high level of dilapidation and deterioration of roads and other construction infrastructural facilities seen in this zone could be attributed to abysmal performance of construction project management. Survey technique with area and random sampling procedures were employed for the study. The primary data were obtained with the instrument of weighted scaled questionnaires the respondents to the questionnaire are clients, contractors and consultants from five states of south eastern Nigeria. A total of 110 and 42 hypothetical cost and time overruns respectively were identify for analysis. The methods of data analysis were spearman’s rank correlation coefficient and Kendall’s coefficient of concordance with the hypothesis tested at 5% level of significant so as to determine the degree of agreement amongst the parties. The results of this study have shown that the three parties to a project are in agreement that materials factor and external factor groups have indeed contributed immensely to delays on construction projects, while projects, contractor’s responsibilities, consultant’s responsibilities, client’s responsibilities, professional management, design and documentation, execution, labour and equipment, contractual relationship, government relations, time overruns; cost overrun and all together (time and cost overruns) factors have not greatly influenced delays on construction projects. Based on these results it is recommended that client’s, contractor’s and consultant’s should pay more attention to both material and external factors for there to be effective and efficient delivery on construction projects at the right time and cost.

Evaluation of risk factors affecting time and cost of construction projects in yemen

Abstract: Construction projects in Yemen, like other developing countries, are dramatically experiencing a highly risk prone, due to their complex and dynamic environments. Thus, such nature is creating an atmosphere of high uncertainty and risks. This consequently leads to both project time and cost overruns. In this paper, a study is carried out to identify and assess the critical risk factors that are influencing time and cost of construction projects in Yemen. Through a comprehensive review for related literatures, 54 common risk factors are identified and categorized into ten groups. The study is further guided by interview sessions as well as a questionnaire survey to professionals and practitioners of construction projects in Yemen, in order to collect the required data. Analyzing the data is statistically accomplished using SPSS software. Results show a significant frequency of time and cost overruns of construction projects in Yemen. Delay in delivery of materials to site and Political instability are located at the top-ranked risk factors that cause projects delay. While, on the other side, the risk factors of Increase of Inflation rates and Fluctuations in the material's prices have the most significant impact on project's budget. However, the research introduces some risk factors, which have the same degree of impact on both time and cost. Moreover, results demonstrate that 47 % of the total projects faced time overrun while 40 % of the total projects faced cost overrun in Yemen.

On the Rate of Return and Risk Factors to International Oil Companies in Iran's Buy-Back Service Contracts

Abstract: We analyze the rate of return (ROR) and risk factors faced by Shell Exploration, an international oil company (IOC), in its Soroosh and Nowrooz buy-back service contract in Iran. In particular, based on our models of cash flow, we analyze the buy-back contract specific risk factors that can contribute to a reduction in the rate of return for the international oil company. Our actual and contractual cash flow models reveal that Shell Exploration’s actual ROR was much lower than the contractual level. Furthermore, we find that among the risk factors that we considered, a capital cost overrun has the greatest negative effect on the IOC’s ROR. Moreover, we show that there is a potential for modifying the contracts in order for the IOC to face an actual ROR closer to the contractual ROR even if the contract faces cost overrun or delay, without exceeding the maximum contractual ROR that the National Iranian Oil Company is willing to give.

Building Information Modeling (BIM) application in construction planning

Abstract: Building information modeling (BIM) has been used in high-profile and complex projects in several countries such as America, United Kingdom (UK), China, Hong Kong, and Australia. Currently, BIM is also used by Architecture, Engineering and Construction (AEC) industry in Malaysia. It has been introduced to manage construction planning activities such as design, cost estimating and project scheduling. BIM utilization in construction planning can detect any clash analysis during design phase, improves project schedule, cost and quality of project as well as communication between construction players. This paper aims to explore BIM application in construction planning. A literature review explores previous BIM studies on definition of BIM, benefits, importance, barriers and BIM tools in construction planning. Furthermore, a semi-structured interview was made with client of the first Malaysian project using BIM. The interview reveals on necessities and benefits of implementing BIM in construction planning as well as challenges faced by the client in implementing BIM. BIM is necessary to construction planning because BIM can detect problems before and during construction phase. A critical analysis of the literature review and the interview results lead to a solid reason of showing the effectiveness of implementing BIM in construction planning. It also show that BIM in construction planning helps to reduce project delay, risk, cost overrun, clash analysis and disputes between construction players.

An Analysis of Cost Management Strategies Employed By Building Contractors on Projects in Zimbabwe

Abstract: The construction industry is a major consumer of capital resources by virtue of the magnitude, complexity and nature of the works it executes. Yet improving cost performance still remains a chronic challenge facing the construction industry worldwide. Apart from advances made by contractors to devise mechanisms to manage project cost, studies across the world reveal that construction projects are hardly completed within budget. The Zimbabwean construction industry has not been spared either. However, this background is considered unhealthy for an industry whose capital consumption is heavy and concomitant cost overruns spell disastrous financial consequences on the investor. This study explored cost management strategies employed by contractors on building projects and also investigated the challenges that contractors encounter in managing project cost. Exploratory research design was employed making use of both questionnaires and interviews to collect data from selected contractors registered under category A, B and C of the Construction Industry Federation of Zimbabwe (CIFOZ). The study observed that in the majority of cases, contractors’ efforts to manage projects costs are centred on management of project resources. Additionally, monthly cost reports, variance management, project budgets and cash flow forecasting are among the other strategies. However, in spite of the growing trend to automate cost control systems, there is evidence to suggest that the traditional paper based systems of storing and managing information is widely used in the industry. Contrary to having cost management systems in place, contractors admit experiencing cost overruns on their projects. These cost overruns are attributable to organizational related challenges, shortage of skilled personnel, and unavailability of some building materials on the local market, variations and deficiency in cost control systems

Diverse Approach of BIM in AEC Industry: A Study on Current Knowledge and Practice

Abstract: The Architecture, Engineering & Construction (AEC) industry has a long chase to overcome the barriers come from project cost overrun, poor productivity, quality, and extended time. Building Information Modeling (BIM) offers the potential approach to overcome these constraints in a highly integrated fashion with efficient and effective collaboration between all stakeholders. As a result, it has been acknowledged as one of the rising trends in the contemporary construction industry. However the potential use of BIM has not been limited only in the building construction industry, also rapidly growing for almost all type, scale and size of built environment projects. It has now exhibits promising trends to all other construction works such as bridge, roads, power plants, industry facility and so on. Moreover, the scope of work for BIM has been spread out in a large extent due to continuous research effort. Indeed BIM is now more diverse considering current context and widely known in different forms such as Green (Sustainable projects) BIM, Social (Participatory) BIM, Horizontal (Infrastructure project) BIM, Vertical (Building project) BIM and Heavy BIM (Civil Projects) This paper aims to highlight the current state of the art of BIM diversions of the industry mainly based upon the construction types. These diversions of BIM are further generalized with reference to collaboration aspects, industry acceptance and its usage. The empirical part of the paper will coalesce BIM trends, different use and future applicability that will be a demonstration for the academics and practitioners. Furthermore it includes different survey data and case study references to exploit the rational findings of BIM.

My cost runneth over: data mining to reduce construction cost overruns.

Abstract: Most construction projects overrun their budgets. Among the myriad of explanations giving for construction cost overruns is the lack of required information upon which to base accurate estimation. Much of the financial decisions made at the time of decision to build is thus made in an environment of uncertainty and oftentimes, guess work. In this paper, data mining is presented as key business tool to transform existing data into key decision support systems to increase estimate reliability and accuracy within the construction industry. Using 1600 water infrastructure projects completed between 2004 and 2012 within the UK, cost predictive models were developed using a combination of data mining techniques such as factor analysis, optimal binning and scree tests. These were combined with the learning and generalising capabilities of artificial neural network to develop the final cost models. The best model achieved an average absolute percentage error of 3.67% with 87% of the validation predictions falling within an error range of ±5%. The models are now being deployed for use within the operations of the industry partner to provide real feedback for model improvement.

Performance Analysis of Software Effort Estimation Models Using Neural Networks

Abstract: Software Effort estimation involves the estimation of effort required to develop software. Cost overrun, schedule overrun occur in the software development due to the wrong estimate made during the initial stage of software development. Proper estimation is very essential for successful completion of software development. Lot of estimation techniques available to estimate the effort in which neural network based estimation technique play a prominent role. Back propagation Network is the most widely used architecture. ELMAN neural network a recurrent type network can be used on par with Back propagation Network. For a good predictor system the difference between estimated effort and actual effort should be as low as possible. Data from historic project of NASA is used for training and testing. The experimental Results confirm that Back propagation algorithm is efficient than Elman neural network.

Evaluation of Cost Estimation Metrics: Towards a Unified Terminology

Abstract: Cost overrun of software projects is major cause of their failures. In order to facilitate accurate software cost estimation, there are several metrics, tools and datasets. In this paper, we evaluate and compare different metrics and datasets in terms of similarities and differences of involved software attributes. These metrics forecast project cost estimations based on different software attributes. Some of these metrics are public and standard while others are only employed in a particular metric tool/dataset. Sixteen public cost estimation datasets are collected and analyzed. Different perspectives are used to compare and classify those datasets. Tools for feature selection and classification are used to find the most important attributes in cost estimation datasets toward the goal of effort prediction. In order to have better estimation it is needed to correlate cost estimation from different resources, which requires a unified standard for software cost estimation metric tools and datasets. It is pertinent that a common cost estimation model may not work for each project due to diverse project size, application areas etc. We suggest having a standardized terminology of project attributes used for cost estimation. This would improve cost estimation as multiple metrics could be applied on a project without much additional effort.

Managing the Cost of Power Transmission Projects: Lessons Learned

Abstract: A major driver to project success is the ability to manage the project cost effectively. Despite the agreement among scholars and practitioners on the importance of managing the project cost, excessive cost overruns continue to occur on major power transmission projects. In this paper, the author, through a Delphi method, will discover problems of managing the project cost, suggest solutions to overcome these problems, and identify lessons learned from these projects. The study was conducted with two different project teams in the same organization in Canada. Key findings from this study will highlight similarities and differences between the two cases in terms of how each team managed the project cost and learned from it. The paper will contribute to the body of knowledge by identifying lessons learned from power transmission projects on how to manage the project cost and by suggesting solutions to overcome the problem of cost overrun in these projects.

Mega-Projects' Cost Performance and Lock-In: Problems and Solutions

Abstract: A major problem in the planning of mega-projects is the high level of misinformation about costs (and benefits) that decision-makers face in deciding whether to build and the high risks such misinformation generates. The inaccuracy of construction cost estimates is typically measured as the size of cost overrun. There are many well-known mega-projects with major cost overruns. One of the most famous ‘project disasters’ in this respect is the Channel Tunnel. This undersea rail tunnel linking the United Kingdom and France is the longest of its kind in Europe with a length of about 50 km. Construction costs increased from £2600 million to £4650 million (1985 prices), which is 80 per cent higher than the forecasted costs (Flyvbjerg et al., 2003a). Another well-known mega-project failure is the Central Artery/Tunnel project in Boston, USA, also known as the ‘Big Dig’ or Big Dug’ due to persistent tunnel leaks. This large and complex underground highway project suffered a cost overrun of US $11 billion or 275 per cent (Flyvbjerg, 2007). Bangkok’s underground subway was 67per cent over budget. Many other examples of projects with cost overruns exist, for example, the Great Belt link in Denmark (54 per cent overrun),the Humber Bridge in the UK (175 per cent overrun) and the Paris Nord TGV in France (25 per cent overrun) (Flyvbjerg et al., 2003a). Cost overruns appear to be a global phenomenon, existing across 20 nations on five continents (Flyvbjerg et al., 2003b).

Structural modelling of cost overrun factors in construction industry

Abstract: Construction industry contributes significantly in improving socio-economic growth of a country. However, this industry usually faces chronic problems such as time overrun, cost overrun, poor quality and others. Of all these, cost overrun is a major problem that occurs globally including Malaysia. Cost overrun is resulted from various factors which are essential to identify for improving cost performance in construction project. Hence, this study focused on identifying and modelling the factors of cost overrun for construction projects in Malaysia. Data collection was done through structured questionnaire, which was designed based on 78 factors found from the literature. Qualitative pilot study was done based on the opinions of 15 experts in the construction industry to improve the questionnaire by reducing the factors to 58. The questionnaire survey was carried out among clients, consultants and contractors. A total of 231 questionnaires were collected of which 213 responses were found valid. Partial Least Square Structural Equation (PLS-SEM) model was developed based on 8 categories/constructs generated through factor analysis test and found that Global Fit Index (GOF) of the model to be 0.37. The findings from the model indicate that all the 8 categories have significant effect on the cost overrun. The most significant category is contractor's site management related issues with path co-efficient value of 0.448. The developed model was validated statistically (using power analysis and predictive relevancy) and through interviewing 21 experienced practitioners. Statistical validation tests showed that the developed model had achieved substantial power in explaining cost overrun problem. All the experts agreed with the factors and also categories of the model have significant impact to cost overrun.