Factors affecting the accuracy of cost estimate: case of Jordan

Abstract

Purpose Cost estimating process is an important element within the project life cycle. Comprehensive information, expanded knowledge, considerable expertise, and continuous improvement are needed to obtain accurate cost estimation. The purpose of this paper is to identify the critical factors that affect accuracy of cost estimation and evaluate the degree to which these factors are important from contractors’ and consultants’ viewpoints. Design/methodology/approach Qualitative and quantitative research approaches were adopted in collecting and analyzing the data, and testing the hypotheses. Based on the literature review, a questionnaire was prepared and then was modified according to the results of face-to-face open-ended interviews conducted with 11 project managers. The final version of the questionnaire was distributed to a random sample of 265 respondents. For analyzing the collected data Kendall’s and Mann-Whitney tests were conducted. Findings The analysis revealed that there is a strong agreement between contractors and consultants in the ranking of the factors related to consultant, contractor, design parameters, and information. A slightly weak agreement between contractors and consultants was noted regarding the factors related to market conditions (external factors) and factors related to project characteristics. Furthermore, the results show that the top ten factors affecting the accuracy of cost estimate are clear and detail drawings and specification, pricing experience of construction projects, perception of estimation importance, equipment (cost/availability/performance), project complexity, clear scope definition, accuracy and reliability of cost information, site constraints (access, storage, services), material availability, financial capabilities of the client, and availability of database of bids on similar project (historical data). Originality/value Offers an original view of the concept of accuracy of cost estimates as it relates to the efficiency of the project relying on both literature review and empirical evidence.

Towards Sustainable Infrastructure Development: Drivers, Barriers, Strategies, and Coping Mechanisms

“…The coefficient of variation (COV) is used as a general measure of the standardised skewness or variability of the responses [40]. This was computed using the standard deviation as a percentage of the mean score.…”

Process design and economic studies of two-step fermentation for production of ascorbic acid

“…The chemical engineering plant cost index for the year 2017, which is 567.5 is used to determine the purchased equipment and bare module costs. The accuracy of the cost estimation for equipment methods are affected by the project complexity, accuracy of cost information, availability of materials and performance of equipment [20]. The cost estimation for each equipment is done before the designation of each equipment, hence the dimension of the equipment such as height, length and diameter are assumed and predefined.…”

An Effective Approach to Input Variable Selection for Preliminary Cost Estimation of Construction Projects

“…At this stage, the factors affecting the accuracy of the cost estimate, input variables, are identified and defined through intensive literature review and expert interview for the required numerical analysis. e study on various literature studies relevant to the cost estimation of highway construction project explored the most influential cost-estimation accuracy factors or input variables [7,12,23,25,33,[54][55][56]. It is not necessarily true that increasing the number of input variables in an early estimate may seem to improve the accuracy of the estimate [23].…”

“…In construction industry, one of the critical factors of a feasibility study in the early planning and design phase of a project is the early understanding of the cost of the construction project [2][3][4]. Several studies have also stated that the failure or success of a certain construction project largely depends on the accuracy of various estimations prepared throughout the project lifecycle [2,3,[5][6][7][8][9]. However, establishing a more realistic and accurate cost estimate for a certain project at its preliminary phase is one of the most difficult tasks.…”

“…erefore, it is required to have a systematic way of exploring the cost-estimate accuracy factors which can be used for preliminary cost estimation of construction projects. In this regard, there are several studies that explored the techniques for identification of input cost factors for the PCE model in highway construction industry [7,[11][12][13][14][15].…”