Magnitude of Construction Cost and Schedule Overruns in Public Work Projects

Shrestha, Pramen P.; Burns, Leslie A.; Shields, David R.

doi:10.1155/2013/935978

Cited by 55 publications

(31 citation statements)

References 7 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…There are many existing publications dedicated to causes of profit losses and construction delays on international EPC mega projects: Asia [5][6][7][8][9][10][11][12][13][14][15][16], Europe [17,18], Africa [19][20][21][22], Americas [23][24][25], and Australia [26,27]. Among the factors identified, the most common cause of project schedule and cost overrun was found to be poor design development prior to construction [5][6][7][8]12,13,[15][16][17][18][22][23][24]27].…”

Section: Existing Literaturementioning

confidence: 99%

“…[7,28]. Shrestha [24] studied the magnitude of construction costs and schedule delays based on the type, size, duration and completion years using statistical analysis. Sambasivan [6], Wong [27] and Habibi [23] hypothesized that design error and change is one of the major causes of delays through diverse data analysis techniques, such as a relative importance index ranking method, severe index, etc.…”

Section: Existing Literaturementioning

confidence: 99%

See 1 more Smart Citation

A Forecast and Mitigation Model of Construction Performance by Assessing Detailed Engineering Maturity at Key Milestones for Offshore EPC Mega-Projects

Kim

Choi

2019

Sustainability

View full text Add to dashboard Cite

The main subject of this research is to develop a forecast and mitigation model of schedule and cost performance during a detailed engineering stage of offshore engineering, procurement and construction (EPC) projects. The weight factors of major elements in detailed engineering completion rating index system (DECRIS) were measured using a fuzzy inference system (FIS) and an analytic hierarchy process (AHP). At five key engineering milestones, from an EPC contract being awarded to the start of construction, detailed engineering maturities were assessed in fourteen historical offshore EPC projects using the DECRIS model. DECRIS cutoff scores for successful project execution were defined at the key engineering milestones. A schedule and cost performance was forecasted and validated through comparison of DECRIS and other models using statistical confidence of a fuzzy set qualitative comparative analysis (fsQCA) and a regression analysis. As a mitigation method for engineering risks to EPC contractors, engineering resource enhancement is recommended for trade-off optimization of cost overrun using a Monte Carlo simulation. The main contribution of this research is that EPC contractors could continuously forecast construction costs and schedule performance utilizing the DECRIS model, and could review the adequacy of engineering resources, assessing the trade-off between said resources and cost/schedule risk mitigation.

show abstract

Section: Existing Literaturementioning

confidence: 99%

Section: Existing Literaturementioning

confidence: 99%

A Forecast and Mitigation Model of Construction Performance by Assessing Detailed Engineering Maturity at Key Milestones for Offshore EPC Mega-Projects

Kim

Choi

2019

Sustainability

View full text Add to dashboard Cite

show abstract

“…Chang [15] assess the reasons for cost and schedule increases specifically in the design portion, identifying owner's change requests, omissions, poor schedule estimation, and general failures; consultants lack of ability and/or omissions; and general growing needs, stakeholders and changing of governing specifications as the largest impacting factors. Overall, it has been estimated that 70% of projects experience an average schedule overrun between 10% and 30% due to these issues [16] with larger projects, such as offshore EPC O&G megaprojects, more likely to experience the higher end of that range [17]. Olawale and Sun present 90 mitigating measures for design, general risk, schedule estimation, complexity, and subcontract management to prevent, predict, and/or correct the sources of overruns [18].…”

Section: Literature Reviewmentioning

confidence: 99%

Using Text Mining to Estimate Schedule Delay Risk of 13 Offshore Oil and Gas EPC Case Studies During the Bidding Process

Son

2019

Energies

View full text Add to dashboard Cite

Korean offshore oil and gas (O&G) mega project contractors have recently suffered massive deficits due to the challenges and risks inherent to the offshore engineering, procurement, and construction (EPC) of megaprojects. This has resulted in frequent prolonged projects, schedule delay, and consequently significant cost overruns. Existing literature has identified one of the major causes of project delays to be the lack of adequate tools or techniques to diagnose the appropriateness and sufficiency of the contract deadline proposed by project owners prior to signing the contract in the bid. As such, this paper seeks to propose appropriate or correct project durations using the research methodology of text mining for bid documents. With the emergence of ‘big data’ research, text mining has become an acceptable research strategy, having already been utilized in various industries including medicine, legal, and securities. In this study the scope of work (SOW), as a main part of EPC contracts is analyzed using text mining processes in a sequence of pre-processing, structuring, and normalizing. Lessons learned, collected from 13 executed off shore EPC projects, are then used to reinforce the findings from said process. For this study, critical terms (CT), representing the root of past problems, are selected from the reports of lessons learned. The occurrence of the CT in the SOW are then counted and converted to a schedule delay risk index (SDRI) for the sample projects. The measured SDRI of each sample project are then correlated to the project’s actual schedule delay via regression analysis. The resultant regression model is entitled the schedule delay estimate model (SDEM) for this paper based on the case studies. Finally, the developed SDEM’s accuracy is validated through its use to predict schedule delays on recently executed projects with the findings being compared with actual schedule performance. This study found the relationship between the SDRI, frequency of CTs in the SOW, and delays to be represented by the regression formula. Through assessing its performance with respect to the 13th project, said formula was found to have an accuracy of 81%. As can be seen, this study found that more CTs in the SOW leads to a higher tendency for a schedule delay. Therefore, a higher project SDRI implies that there are more issues on projects which required more time to resolve them. While the low number of projects used to develop the model reduces its generalizability, the text mining research methodology used to quantitatively estimate project schedule delay can be generalized and applied to other industries where contractual documents and information regarding lessons learned are available.

show abstract

“…Cost component and cost magnitude can be very subjective for each decision holder, resulting in tender proposals with different costs. Shrestha et al, (2013), stated that cost magnitude in contractor companies is influenced by project size, project complexity, and schedule.…”

Section: Introductionmentioning

confidence: 99%

Meaning of cost components and cost magnitude determining tender prices: A study on CV. RG

Paramita

Sudana

Budiasih

et al. 2019

ijssh

View full text Add to dashboard Cite

The cost was the basis for management in determining the selling price of a product or service. In construction service companies, the cost determining is important. It will affect the value of the tender proposal submitted to get the job. CV. RG is a construction service company provides services in the civil and building fields. CV. RG, of course, has often participated in tenders. The problem is the company often suffer losses. The company’s success rate is still relatively low. The company participates in a tender, costs, and efforts arise in preparing the tender. In conducting costing, there are at least two aspects must be considered. It is namely the cost component and cost magnitude. This study uses a phenomenological approach to gain an understanding of decision holders about a reality based on experience. The interpretative phenomenology method is suitable to be used due to the researcher wants to reveal and understand how the decision holders. CV. RG means cost component and cost magnitude is in the process of price-determining the tender proposal. The results of the research analysis showed that in determining the cost component. The informant felt complicated due to the situation at hand. The dilemma feelings also accompanied the informants in determining the cost magnitude of the tender proposal. The meaning of this informant can also be explained because of motives and in order to motives that underlie the informant actions.

show abstract

Magnitude of Construction Cost and Schedule Overruns in Public Work Projects

Cited by 55 publications

References 7 publications

A Forecast and Mitigation Model of Construction Performance by Assessing Detailed Engineering Maturity at Key Milestones for Offshore EPC Mega-Projects

A Forecast and Mitigation Model of Construction Performance by Assessing Detailed Engineering Maturity at Key Milestones for Offshore EPC Mega-Projects

Using Text Mining to Estimate Schedule Delay Risk of 13 Offshore Oil and Gas EPC Case Studies During the Bidding Process

Meaning of cost components and cost magnitude determining tender prices: A study on CV. RG

Contact Info

Product

Resources

About