This research survey was carried out to investigate three areas of concern which are commonly associated with the implementation of government development projects: namely: (i) cost overrun causal factors, (ii) effective remedial cost control measures and (iii) apportionment of professional responsibility for either cost overrun causal factors or costs control remedial measures’ implementation. The ultimate aim was to identify major causes of cost overruns, generate and recommend possible solutions to the problem of cost overruns in the Botswana public construction industry. The research strategy adopted, involved the circulation of questionnaires and subsequent statistical data analysis. Initially, an expert group questionnaire test survey was conducted among ten (10) professionals (expert group), in order to solicit professional opinion and contributory input on the research. The purpose of the expert group questionnaire test survey was to refine the research questionnaires, make necessary questionnaire structure amendments, eliminate possible ambiguities, and finally, to make data collection an easy exercise. Through the expert group questionnaire test survey, the research questionnaires were assessed for validity and reliability. Thus, the questionnaire content validity (Saunders et al. 2003) was established by soliciting comments from the expert group, on the representativeness and suitability of the research questionnaires. Lists of causes of cost overruns factors and effective cost control measures were, developed for each of the three major project development cycle phases; namely: the conception/planning/designing, implementation, and completion/commissioning phases. The research questionnaires which were formulated through expert group questionnaire test survey lists of cost overruns causal factors and cost control remedial measures were circulated to a wide range of practicing professionals. In addition, a representative number of case study projects, with specific reference to cost overruns and cost control, were selected for detailed investigation. Three statistical data analytical methods; the respondents ‘s cost overrun factor/cost control measures ranking order, the Kendell’s Correlation Coefficient and the case study analysis, were simultaneously (triangulation analysis), employed in order to draw conclusive results of the research findings. Hence, the result of the survey identified: i) the most frequent cost overrun causal factors; as inadequate project brief, insufficient/inadequate project design, lack of project coordination and contractual claims and ii) the most effective cost control measures; as appointment of competent project personnel, improved project monitoring, awarding contracts to reputable/competent contractors and monitoring teams and providing time and financial management facilities. The third objective, which was to identify and apportion professional personnel responsibility for causal factors and remedial cost control implementation measures; within each of the three-project development cycle phases; yielded the following results: Clients and project managers were found to play a major contributory role in activities that lead to project cost overruns at conception/planning/designing phase. The project implementation phase allocated blame to contractors, architects and quantity surveyors for cost overruns, while quantity surveyors and contractors were found to be responsible for cost overruns at the completion/commissioning phase. On the implementation of effective remedial cost control measures, the professional responsibility scenario was found to be as follows: clients and project managers play a major role at conception/planning/designing phase, whereas quantity surveyors are key players at implementation phase and project managers; at completion /commissioning phase.

Construction managers confront many problems. Still, this industry plays a vital role in the healthy growth of the economy of many countries throughout the developed and developing world. Effective management of construction projects has been a major research subject in the last century due to the importance of this industry and the amount of money it attracts. One critical problem facing construction managers is inefficient cost control procedures, particularly in developing regions of the world. Since the end of the Second World War, the use of sophisticated cost control procedures in managing and controlling project costs have been accepted and applied widely in many parts of the world such as the United States and the United Kingdom. These procedures are important in a growing economy to ensure delivery of projects on time and within budget, but they are equally important during an economic recession when project viability becomes marginal. In the early 1990s, the construction industry in Thailand played a critical role during a period of strong economic growth. Construction cost control was not a major concern as developers rushed to capitalize on the booming market. In the late 1990s, the economy of Southeast Asia sank into recession. Project cost control became a critical issue for the developers as well as the construction companies in managing construction projects. A significant number of projects in Thailand in the late 1990s had significant cost overruns. Cost overruns had been a problem during the high growth period in the early 1990s, but demand overcame the problems created by poor cost control. The use of good project cost control procedures has become a concern of project investors and construction companies in Thailand since the recession of the late 1990s. Project managers and developers are now aware that the failure of a cost control system or use of a poor system can lead to project failure. Project cost control methods need to be improved in Thailand to ensure that owners and contractors manage construction costs and meet project goals on time and within budget. In this study, project cost controls in the United States and Thailand will be examined. These procedures will be analyzed to identify their similarities and differences. The causes and solutions for cost overruns in the two countries will also be examined. The results from the study will illustrate how the project cost control procedures used in the United States can be applied to the construction industry in Thailand to improve the procedures used by Thai contractors.

Looking at newspapers nowadays, you are likely to see reports about public projects which turn out to be more expensive than estimated, sometimes even fourteen times the planned cost budget as in the case of the Sydney Opera. In order to gain a new insight on how this problematic could be improved, this paper aims to find correlations between the causes of deviations in public procurement and in the private market. Data from a on a global scale operating firm has been analyzed and compared to causes found in prior research. The questions this paper aims to answer are “Are causes and correlations found in smaller, private projects consistent with causes of cost overruns in public procurement?” and “Which implications and recommendations can be derived from the smaller dimension for the larger dimension of public procurement?”   After introducing the theoretical framework and its theories, the individual cost deviations and correlations of the different segments are introduced and analysed. As a result, one can see how the rational behaviour model and asymmetric information influence the estimated cost and that, in order to decrease the problematic of cost overruns, estimation techniques and especially the way contracts are constructed have to be improved. Furthermore, positive correlations between the size of cost deviations and number of employees, possible chain of events and pay offs between

System Dynamics has been applied to various fields in the natural and social sciences. There still remain countless problems and issues where understanding is lacking and the dominant theories are event-oriented rather than dynamic in nature. One such research area is the application of the traditional systems engineering process in new technology development. The Navy has been experiencing large cost overruns in projects dealing with the implementation of new technologies on complex ship systems. We believe that there is a lack of understanding of the dynamic nature of the technology development process undertaken by aircraft-carrier builders and planners. Our research effort is to better understand the dynamics prevalent in the new technology development process and we use a dynamic modeling technique, namely, System Dynamics in our study. We provide a comprehensive knowledge elicitation process in which members from the Newport News Shipbuilding, the Naval Sea Command Cost Estimating Group, and the Virginia Tech System Performance Laboratory take part in a group model building exercise. We build a System Dynamics model based on the information and data obtained from the experts. Our investigation of the dynamics yields two dominant behaviors that characterize the technology development process. These two dynamic behaviors are damped oscillation and goal seeking. Furthermore, we propose and investigate four dynamic hypotheses in the system. For the current structure of the model, we see that an increase in the complexity of new technologies leads to an increase in the total costs, whereas a increase in the technology maturity leads to a decrease in the total costs in the technology development process. Another interesting insight is that an increase in training leads to a decrease in total costs. / Master of Science

The project cost overruns instigated through the loss of construction materials lowers the profitability of each stakeholder significantly. The purpose of this single case study was to explore strategies managerial leaders of a large construction firm used to counteract material cost overruns successfully. The diffusion of innovation theory was the conceptual framework for this study. The target population consisted of 6 managerial leaders with experience in large construction projects adhering to waste management standards and industry certifications. Data were collected using semistructured interviews and review of company documentation. The data analysis approach involved the content analysis research method to interpret and code the verbatim transcriptions of interviews into categories. The 2 principal categories from the study data were material management and planning and the supply chain and logistics. The results of the study yielded evidence of 2 strategies to counteract the material cost overruns, which were to strengthen partnerships with the suppliers and to hold regular audits at the project sites. The implication of this study for social change includes the potential to conserve depleted land minerals and valuable land reserves from becoming landfill by providing construction managers with information about strategies to counteract material cost overruns.

Construction projects in developing countries may suffer from time overruns, which are associated with cost overruns. This research project investigated both time and cost overruns on high-rise building projects in Dhaka, Bangladesh. Surprisingly, preliminary data analysis showed negligible cost overruns in comparison to time overruns. So, further analysis o f cost overruns was not considered in this thesis. This research project also investigated how the causes o f time-overruns can be mitigated. 72 time-overrun and 22 cost-overrun variables were identified through a literature review. These variables were taken as parameters and a personal interview survey was conducted with developers, consultants, contractors and project managers using semistructured questionnaire. A similar second survey was conducted using 22 measures, which can mitigate time- overruns. Data analysis involved the relative importance index to rank the variables, factors analysis to reduce variables to factors with minimum loss of data, stepwise regression to find links among factors in successive stages of construction process and multiple regression to explain delays in terms of factors. The main causes o f time-overruns were ‘cash flow’, ‘planning and scheduling deficiency’ and ‘design changes’. A scree graph identified 31 important variables that caused delays but factor analysis reduced these to 14 factors. Stepwise regression found no strong links among the factors to identify them as reasons for delay in successive stages of the construction project. A multiple regression model explained about 85% of the variance of the delays using eight factors. The main individual measures mitigating time-overruns were ‘improvement of cash flow’, ‘improvement o f communication and coordination among project participants’ and ‘development o f robust planning and scheduling instruments’. Factor analysis produced ten representative factors. Stepwise regression could not find strong links among factors mitigating time-overruns in successive stages of the construction project.

This is an essay written at the Royal Institute of Technology in Stockholm in the degree programme Civil Engineering and Urban Management. The focus is on real estate economics, which is a part of the department of Real Estate and Construction Management. The paper studies the construction of Norra länken in Stockholm in a so-called case study. The focus has been directed towards the economics of the project where we analyze the measures that are required to cope with the budget. The analysis shows that the project has benefited greatly from the experience the construction of Södra länken provided. Furthermore savings has also been made in several different areas. The study also shows that the project has managed to keep both the budget and the initial timeline. The calculations underlying the budgets are made with the so-called successive method. This study shows, however, that the reliability and accuracy on this method should be strongly questioned. The difference between the estimated final cost and the actual final cost increases the further into the project should be seen as a sign that the method is flawed. / Detta är en uppsats skriven på KTH i Stockholm inom civilingenjörsprogrammet Samhällsbyggnad. Inriktningen är fastighetsekonomi vilket är en del av institutionen för Fastigheter och Byggande. I uppsatsen studeras med en så kallad fallstudie uppförandet av Norra länken. Fokus har varit riktat mot de ekonomiska förutsättningarna kring projektet med ett syfte att analysera vilka åtgärder som tagits för att klara av att hålla såväl tidsplan som budget. Analysen visar att projektet har haft stor nytta av erfarenheter som byggandet av Södra länken gav. Utöver det har besparingar skett inom flera olika områden. Att projektet har klarat så väl tidsplan som budget är också något som kan konstateras efter denna studie. Kalkylerna som legat till grund för budgetarna är gjorda med den så kallade succesiva metoden. Denna studie visar dock att pålitligheten och träffsäkerheten kring denna metod starkt bör ifrågasättas. Att skillnaden mellan den uppskattade slutkostnaden och den faktiska slutkostnaden ökar ju längre in i projektet bör ses som ett tecken på att metoden är bristfällig.

Senior managers fail to control time and costs of construction projects despite available advanced project management tools. Based on project management theory, the objective of this multiple case study was to explore the strategies senior managers use to reduce cost overruns and schedule delays in construction projects. Primary data were obtained from semistructured interviews with 3 senior managers from different construction project management companies who have successfully managed construction projects in Qatar. Data analysis process included a modified Van Kaam method. The transcribed interviews were interpreted and coded to generate themes and were validated through member checking and archival documents. The most centralized themes included (a) master planning, (b) processes and procedures, (c) managing design stage, (d) procurement management, (e) use of proper software, (f) setting project cost and time, and (g) deciding clear scope. A construction project may not succeed without appropriate planning for all stages of the project lifecycle. Managing the approval of the project components during the design stage contributes to reducing changes during construction, which is helpful to control cost and time. The project processes and procedures are meaningful roadmaps for the managers and decision makers. The implications for positive social change include the potential to maintain a cleaner Earth by reducing design and construction wastes. Reducing wastes improves the cost of construction and provides opportunities for people to own property at more affordable costs.

System dynamics has been used to better understand the dynamics within complex natural and social systems. This understanding enables us to make decisions and define strategies that help to resolve the problematic behaviors associated within these systems. For example within an operating environment such as the US Navy, decisions taken today can have long lasting impact on system performance. The Navy has experienced large cost overruns during the new technology implementation process on ship systems that can also have an impact on total life cycle performance. The integration phase of the implementation process represents most of the cost overruns experienced in the overall new technology life cycle (development, integration, and operation/support/disposal). We have observed a general concern that there is a lack of understanding for the dynamic behavior of those processes which comprise the integration phase, among ship-builders and planners. One of the goals of our research effort has been to better understand the dynamic behavior of the new technology integration processes, using a dynamic modeling technique known as System Dynamics. Our approach has also been to provide a comprehensive knowledge elicitation process in which members from the shipbuilding industry, the US Navy, and the Virginia Tech System Performance Laboratory take part in group model building exercises. The system dynamics model that is developed in this manner is based on data obtained from the experts. An investigation of these dynamics yields a dominant cost behavior that characterizes the technology integration processes. This behavior is S-shaped growth. The following two dynamic hypotheses relative to lifecycle cost and performance of the inserted new technology were confirmed: (1) For the current structure of the model we observe the more the complexity of the new technology, the less affordable a technology becomes; (2) Integration of immature (less developed) technologies is associated with higher costs. Another interesting insight is that cost is very sensitive to the material procurement. Future research can be addressed to a more detailed level of abstraction for various activities included in the technology integration phase, such as testing and evaluation, cost of rework and risks associated with inadequate testing etc. This will add to our evolving understanding of the behavior of individual activities in the technology integration process. / Master of Science

Kostnadsöverskridning är ett vanligt förekommande problem inom byggbranschen och kan ha en negativ påverkan på projektets omfattning. Detta problem baseras på flera faktorer. Syftet med denna studie har varit att undersöka de viktigaste orsakerna till kostnadsöverskridande i byggprojekt samt att hitta bästa möjliga åtgärder för dessa orsaker. För att uppnå syftet genomförde vi en större litteraturgenomgång och tog del av tidigare forskning av ämnet. Vi samlade in även data från enkätstudier av olika aktörer från olika företag. Denna data samlades in med hjälp av en enkät som företagen besvarade. Resultaten bevisar att kostnadsöverskridningar är ett problem i byggbranschen samt visar att det finns många olika orsaker som leder till att kostnader överstiger. De största orsakerna är fel kalkylering av projektet, och osäkerhet och oförutsedda händelser som händer i världen som hindrar att projektet slutförs enligt den budget som planerat. De åtgärderna som har kommit fram i resultaten är bland annat att åtgärden kan vidtas om organisationen är kompetent och har realistiska kalkyler samt gör väl genomtänkt projektstyrning i tid. / Cost overrun is a common problem in the construction industry and can have a negative impact on the scope of a project. This problem is based on several factors. The purpose of this study has been to investigate the main causes of cost overrun in construction projects and to identify the best possible measures for addressing these causes.   To achieve this purpose, we conducted an extensive literature review and examined previous research on the subject. We also collected data from survey studies involving various stakeholders from different companies. This data was gathered through a survey that the companies responded to.   The results confirm that cost overruns are a problem in the construction industry, and they demonstrate that there are many different causes that contribute to exceeding costs. The major causes include inaccurate project estimation and uncertainties and unforeseen events occurring in the world that prevent the project from being completed within the planned budget.   The measures that have emerged from the results include, among others, the need for competent organizations to take action and have realistic estimates. Additionally, well-thought-out project management should be implemented in a timely manner.