Thesis (MTech (Construction Management))--Cape Peninsula University of Technology, 2017. / The South African construction industry is faced with challenges which contribute to unsuccessful project delivery. Cost underestimation have negative contribution to construction projects, the effects and causes of cost underestimation have not been adequately explored with the objective of providing mitigating mechanisms. This study is aimed at investigating factors which contribute to cost underestimation, the prevalence of cost underestimation in relation to causes and effects of cost underestimation, with the final objective to establish mechanisms for efficient mitigation of cost underestimation. The study review literatures relating to cost estimation, and additional data were collected in form of a structured questionnaire. The questions highlight the following areas; project planning, method and techniques, and tools as factors contributing to cost underestimation; scope changes and risk associated with specialized building works as prevalence of cost underestimation; planning stage, design and material changes risk due to unforeseen factors as causes of cost underestimation; loss of reputation, exposure to risk and financial loss as effects of cost underestimation; and design requirements, effective techniques and planning as cost underestimation mitigation mechanism. A total of one hundred and forty two (142) emails were sent via the survey website to the selected respondents and seventy four (74) responses were received. A quantitative approach was used and a convenient purposive sampling of respondents was used by handpicking the respondents from the available register of the South African Council for Quantity Surveying Professions (SACQSP) and the general building contractors registered with Construction Industry Development Board (CIBD), construction professionals working in quantity surveying practice and construction firms within and around Cape Town.

published_or_final_version / Architecture / Master / Master of Science in Construction Project Management

published_or_final_version / abstract / Civil Engineering / Doctoral / Doctor of Philosophy

published_or_final_version / Management Studies / Master / Master of Business Administration

by Law Ka-ming, Michael, Cheuk Yue. / Bibliography: leaves 168-169 / Thesis (M.B.A.)--Chinese University of Hong Kong, 1986

published_or_final_version / abstract / toc / Civil Engineering / Master / Master of Philosophy

published_or_final_version / Architecture / Master / Master of Philosophy

M.Ing. (Engineering Management) / Capital intensive engineering projects involve the flow of large sums of money over the project life. During the pretender phase of the project, estimates of the forecast cash flow and associate return on investment are made based on certain assumptions which at the time are, at best, only informed guesses. As the project progresses, the uncertainty surrounding the magnitude and the timing of these cash flows and rate of return, diminishes. By recognising the time value of money and the importance of the synthesis of time and cash flow as well as the interdependence of project activities, it is desirable to obtain an estimate of the PROBABLE outcome of the return on investment~ should the bid be accepted. This outcome can only be 'guessed' at by means of a probabilistic analysis of the parameters that go to make up the nett cash flow. This study is an attempt to find a model suitable for use in the construction industry which accurately describes the construction process, and presents an overall analysis of the variation in the rate of return as a result of the probabilistic nature of the original parameters. Various models were investigated. All were found suitable under limited conditions.

Rework is an insidious problem in the construction industry. According to the Construction Industry Institute (CII) Source Document 29, the cost of rework is 12.4% of the total project cost. However, these costs are just the tip of the iceberg, because they do not represent schedule delays, litigation cost, and other intangible costs of poor quality. Therefore, the complete cost of rework is estimated to be much greater than 12.4%. To effectively reduce the cost of rework, it is necessary to not only study the causes of rework, but also to study the effectiveness of activities designed to reduce rework. This research studied the relationships between rework activities and prevention and appraisal activities on four construction projects. This research addressed two questions: 1) What is the effect of prevention and appraisal activities on the reduction of rework, and 2) What is the effect of prevention activities occurring in the design phase on rework due to design errors in the construction phase? Based on the project data collect by the Quality Performance Management System (QPMS), this research concluded there was a slight relationship between increasing prevention and appraisal activities and the reduction of rework. There was a direct relationship between the increase of prevention activities in design and the reduction of rework due to design errors in the construction phase. The relationships were stronger for both questions at the project level than at the discipline level. At the project level, the aggregation of all the disciplines appears to negate the biases created within the specific disciplines. This research helps to provide real-world data to emphasize the importance of prevention activity in the design phase of a construction project. / Master of Science

Major projects around the world have long been notorious for cost overruns and schedule delays. In response to the cost overruns, the U.S. Department of Transportation established a task force and took a range of steps to strengthen the stewardship, management, and oversight of major projects at the beginning of the 21st century. Through a classical test of hypotheses, this study first investigates the prevalence and magnitude of the cost overruns of the major infrastructure projects in the U.S. before and after the reform. The before and after comparison finds that the projects experiencing cost overrun have been reduced from 77% to 45% following the reform. Results revealed that the U.S. Department of Transportation has developed measurable outcomes but their success may be limited. To address the cost overruns, conversely, the U.K. adopted Kahneman’s Nobel Prize-winning theory to challenge biases in human judgment and mandated reference class forecasting for major projects at the beginning of the 21st century. Through before-and-after and with-and-without comparisons of major infrastructure projects, this empirical study then examines the practical relevance of reference class forecasting for infrastructure investments. A before-and-after comparison reveals that the average cost overrun declined from 50% to 5% following the introduction of reference class forecasting. A with-and-without comparison also demonstrates that the U.K. surpassed its targeted probability of completing projects within budget by 12% using reference class forecasting, whereas the U.S. underperformed by 23%. Thus, reference class forecasting has engendered notable improvements in estimation in the U.K. Although schedule delays not only result in significant financial implications to project sponsors but also lead to substantial social costs to the public, scant attention has been dedicated to schedule delays. Therefore, this study further investigates the frequency, magnitude, and characteristics of schedule delays occurring during the construction of major infrastructure projects built in the U.S. and the U.K. between 1999 and 2018. A multivariate regression analysis confirms that length of implementation phase and project type plays the most important role in project schedule performance. During extensive efforts were made to project controls in the U.S. and the U.K. over the last two decades, this study also finds, project performance has not improved at all from a schedule perspective. In order to address the issue, this study suggests reference class forecasting to develop more realistic and reliable schedule estimates. This empirical study demonstrates the benefits of supplementing or replacing the current forecasting method. The findings can be used to reduce substantial financial risks for the government as well as social and economic welfare losses for society.