IDENTIFYING AND ASSESSING THE CAUSES OF COST OVERRUN AT THE DESIGN AND PRECONSTRUCTION STAGES IN THE...

Cost Overrun Causes Cost Overrun Causes Related to the Design Related to the Design Phase in the Egyptian Phase in the Egyptian Construction IndustryConstruction Industry

Assessment of the Egyptian ExperienceAssessment of the Egyptian Experience

Cost Overrun Causes Cost Overrun Causes Related to the Design Related to the Design Phase in the Egyptian Phase in the Egyptian Construction IndustryConstruction Industry

Assessment of the Egyptian ExperienceAssessment of the Egyptian Experience

By : Ahmad SamyBy : Ahmad SamyAugust 2013August 2013

By : Ahmad SamyBy : Ahmad SamyAugust 2013August 2013

IntroductionIntroductionIntroductionIntroduction

Problem StatementProblem Statement

Discussing causes of cost overrun is a step in enhancing the Discussing causes of cost overrun is a step in enhancing the professional practice through trying to avoiding the occurrence or the professional practice through trying to avoiding the occurrence or the

impact of these causes .impact of these causes .

Problem StatementProblem Statement

Discussing causes of cost overrun is a step in enhancing the Discussing causes of cost overrun is a step in enhancing the professional practice through trying to avoiding the occurrence or the professional practice through trying to avoiding the occurrence or the

impact of these causes .impact of these causes .


Research ObjectivesResearch ObjectivesResearch ObjectivesResearch Objectives


Research MethodologyResearch MethodologyResearch MethodologyResearch Methodology


Literature Literature ReviewReview

Experts Experts InterviewsInterviews

QuestionnaireQuestionnaire SurveySurvey

Statistical Statistical AnalysisAnalysis

Objective: Thorough understanding of building economics related to pre-construction stages in books and journals.

Output: A list of cost overrun causes related to design phase from references and international researches

Objective: To suggest additional causes and adapt the selected causes to the Egyptian construction industry .

Output: A list of cost overrun causes related to design phase in the Egyptian construction industry

Objective: to assess the frequency and impact of the selected causes

Output: Data from 101 valid participation forwarded to statistical Analysis.

Objective: to arrange cost overrun causes according to their importance based on the questionnaire information

Output: Data from 101 valid participation forwarded to statistical Analysis.

Scope of the ResearchScope of the ResearchScope of the ResearchScope of the Research


This research focuses on Identifying the Identifying the Importance Importance of causes of cost overruns that are stemming, related or takes place during the design and other pre-construction phases in the Egyptian construction industry.

Literature ReviewLiterature ReviewLiterature ReviewLiterature Review

The Literature review discussed the following The Literature review discussed the following

titles:titles:

The Literature review discussed the following The Literature review discussed the following

titles:titles:


International studies incorporated in the researchInternational studies incorporated in the researchInternational studies incorporated in the researchInternational studies incorporated in the research


Author(s)Author(s) YearYear CountryCountryResearch PerformedResearch Performed

MethodMethod ParticipantsParticipants Projects TypeProjects Type

Koushki et al. 2005 Kuwait Interview Owners and Developers Residential Houses

Azhar et al. 2008 Pakistan Questionnaire Construction Firms Heavy Engineering, Infrastructure, Commercial and Industrial Construction

Jackson 2002 UK Questionnaire Quantity Surveyors Various

Kaming et al. 1997 Indonesia Questionnaire / Interview Project Managers High Rise Buildings

Le-Hoai et al. 2008 Vietnam Questionnaire Owners, Consultants and Contractors Large Construction Projects

Apolot et al. 2009 Uganda Questionnaire Architects, Quantity Surveyors and Engineers Various

Baloyi & Bekker 2011 South Africa Questionnaire Owners, Consultants and Contractors Stadiums

Ameh et al. 2010 Nigeria Questionnaire Owners, Consultants and Contractors Telecommunication construction projects

Bubshait & Al-Juwairah 2002 Saudi Arabia Questionnaire Owners, Consultants and Contractors Various

Chang 2002 USA Cases Study - Interviews Owner's Project Managers Four Roadway Construction Projects

Durdyev et al. 2012 Turkey Questionnaire Project management consultants, Contractors and Sub-contractors Residential Projects

Ali & Kamaruzzaman 2010 Malaysia Questionnaire Project Managers, Quantity Surveyors and Engineers Various

Literature ReviewLiterature ReviewLiterature ReviewLiterature ReviewCauses collected through the literature Causes collected through the literature review and the international studies:review and the international studies:Causes collected through the literature Causes collected through the literature review and the international studies:review and the international studies:

Experts InterviewsExperts InterviewsExperts InterviewsExperts Interviews

Experts InterviewsExperts InterviewsExperts InterviewsExperts InterviewsThe interview depended on a 77 semi structuredsemi structured, the collected causes from literature review were assessed to three main questions

The interview depended on a 77 semi structuredsemi structured, the collected causes from literature review were assessed to three main questions

Experts InterviewsExperts InterviewsExperts InterviewsExperts InterviewsInterview Results:Interview Results:

QuestionnaireQuestionnaireQuestionnaireQuestionnaire

Data AnalysisData AnalysisData AnalysisData Analysis

Frequency index, impact index, importance index and relative importance of cost Frequency index, impact index, importance index and relative importance of cost overrun cause according to the questionnaire overall resultsoverrun cause according to the questionnaire overall resultsFrequency index, impact index, importance index and relative importance of cost Frequency index, impact index, importance index and relative importance of cost overrun cause according to the questionnaire overall resultsoverrun cause according to the questionnaire overall results


Pareto Analysis to determine the most important causes from the overall results.Pareto Analysis to determine the most important causes from the overall results.Pareto Analysis to determine the most important causes from the overall results.Pareto Analysis to determine the most important causes from the overall results.


Overall and different parties’ relative importance of causesOverall and different parties’ relative importance of causesOverall and different parties’ relative importance of causesOverall and different parties’ relative importance of causes


Correlation between the Involved PartiesCorrelation between the Involved PartiesCorrelation between the Involved PartiesCorrelation between the Involved Parties


Recommendations Recommendations Recommendations Recommendations

1.1. Occurrence of design variations, changes or additional work by owner or designerOccurrence of design variations, changes or additional work by owner or designer1.1. Occurrence of design variations, changes or additional work by owner or designerOccurrence of design variations, changes or additional work by owner or designer


2. Unrealistic estimation of construction period2. Unrealistic estimation of construction period2. Unrealistic estimation of construction period2. Unrealistic estimation of construction period


3. Lack of information and definitions of scope due to incomplete recognizing or badly 3. Lack of information and definitions of scope due to incomplete recognizing or badly developed client's needs and lack of involvement of the appropriate stake holdersdeveloped client's needs and lack of involvement of the appropriate stake holders

3. Lack of information and definitions of scope due to incomplete recognizing or badly 3. Lack of information and definitions of scope due to incomplete recognizing or badly developed client's needs and lack of involvement of the appropriate stake holdersdeveloped client's needs and lack of involvement of the appropriate stake holders


4. Inadequate design, design errors and mistakes, lack of details or contradiction in 4. Inadequate design, design errors and mistakes, lack of details or contradiction in design and conflict between design documents (drawings and specifications)design and conflict between design documents (drawings and specifications)

4. Inadequate design, design errors and mistakes, lack of details or contradiction in 4. Inadequate design, design errors and mistakes, lack of details or contradiction in design and conflict between design documents (drawings and specifications)design and conflict between design documents (drawings and specifications)


5. Lack of communication and coordination between design participants of different 5. Lack of communication and coordination between design participants of different backgroundbackground

5. Lack of communication and coordination between design participants of different 5. Lack of communication and coordination between design participants of different backgroundbackground


6. Lack of value management and Build ability consideration6. Lack of value management and Build ability consideration6. Lack of value management and Build ability consideration6. Lack of value management and Build ability consideration


7. Lack of Designers understanding of cost and value and the subsequent cost 7. Lack of Designers understanding of cost and value and the subsequent cost implications of what included in the designimplications of what included in the design

7. Lack of Designers understanding of cost and value and the subsequent cost 7. Lack of Designers understanding of cost and value and the subsequent cost implications of what included in the designimplications of what included in the design


8. Inadequate consideration of risks 8. Inadequate consideration of risks 8. Inadequate consideration of risks 8. Inadequate consideration of risks


9. Occurrence of mistakes in quantities taking off9. Occurrence of mistakes in quantities taking off

It is important to take off the quantities of the design with a great precision in order It is important to take off the quantities of the design with a great precision in order to provide the real sum for the design management during design and later to cut off to provide the real sum for the design management during design and later to cut off the costly variations at construction phase. the costly variations at construction phase.

3d enhanced CAD programs offer a great help for the design team to provide a 3d enhanced CAD programs offer a great help for the design team to provide a realistic quantities taking off as well as experienced specialists incorporated during realistic quantities taking off as well as experienced specialists incorporated during the design phase.the design phase.

9. Occurrence of mistakes in quantities taking off9. Occurrence of mistakes in quantities taking off

It is important to take off the quantities of the design with a great precision in order It is important to take off the quantities of the design with a great precision in order to provide the real sum for the design management during design and later to cut off to provide the real sum for the design management during design and later to cut off the costly variations at construction phase. the costly variations at construction phase.

3d enhanced CAD programs offer a great help for the design team to provide a 3d enhanced CAD programs offer a great help for the design team to provide a realistic quantities taking off as well as experienced specialists incorporated during realistic quantities taking off as well as experienced specialists incorporated during the design phase.the design phase.


10. Unavailability of construction cost data to develop a realistic cost estimate10. Unavailability of construction cost data to develop a realistic cost estimate

More attention should be paid to provide this information about rates of More attention should be paid to provide this information about rates of construction services and materials in different parts of Egypt. construction services and materials in different parts of Egypt.

Providing such information would increase the investments in many regions and give Providing such information would increase the investments in many regions and give clearer perceptions of construction costs in other, this helps investment from future clearer perceptions of construction costs in other, this helps investment from future setbacks due to unrealistic estimates through encouraging contractors to submit setbacks due to unrealistic estimates through encouraging contractors to submit realistic bids.realistic bids.

10. Unavailability of construction cost data to develop a realistic cost estimate10. Unavailability of construction cost data to develop a realistic cost estimate

More attention should be paid to provide this information about rates of More attention should be paid to provide this information about rates of construction services and materials in different parts of Egypt. construction services and materials in different parts of Egypt.

Providing such information would increase the investments in many regions and give Providing such information would increase the investments in many regions and give clearer perceptions of construction costs in other, this helps investment from future clearer perceptions of construction costs in other, this helps investment from future setbacks due to unrealistic estimates through encouraging contractors to submit setbacks due to unrealistic estimates through encouraging contractors to submit realistic bids.realistic bids.


IDENTIFYING AND ASSESSING THE CAUSES OF COST OVERRUN AT THE DESIGN AND PRECONSTRUCTION STAGES IN THE...

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