Arif, F; Lodi, S H and Azhar, N (2015) Factors influencing accuracy of construction project cost estimates in Pakistan: Perception and reality. International Journal of Construction Management, 15(1), pp. 59-70. ISSN 1562-3599
Abstract
Construction projects are unique as they are priced before being constructed. Therefore, accuracy of construction project cost estimates is pivotal in project success. Several studies have determined factors influencing the accuracy of cost estimates. Comparatively less information is available for construction industries in developing countries. This study identified factors influencing the accuracy of cost estimates for construction projects in Pakistan. Cost data was collected for 46 completed construction projects. Four dimensions 60 factors were considered. Dimensions included: project characteristics, project team, estimating procedures, and (costing related) information items. A rigorous analysis framework based on principal component analysis and regression analysis was used. Involvement of the contractor in the estimation procedure and labour rates were found to be the most significant factors. Early involvement of the contractor can result in realistic estimates through timely input from subcontractors, materials suppliers and manufacturers among others. This also helps in controlling labour costs as most of the construction projects in Pakistan employ labour through subcontractors.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | cost estimate; estimate bias; estimate consistency; accuracy; Pakistan; principal component analysis; regression analysis |
| Index terms: | estimating, subcontractor, construction project, Pakistan, bias, accuracy, manufacturer, developing country, dimension, costing, estimate, construction industry, cost estimate, cost data, project team, regression analysis, principal component analysis, labour cost, estimation, project success |
| Subjects: | practitioner, health monitoring assessment and metrics, project delivery, financial and cost management, project management theory and practice, probability and distributions, development economics, professional development, Geography, production management, accounting and finance, statistical analysis, cost management, industry analysis |
| Topics: | Cost Management, Health and Safety, Project Management, Geographical Context, Research Practice, Information Management, Roles and Professions, Procurement, International Construction |
| Descriptive scope: | 4 PCTA |
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