Adafin, J; Rotimi, J O B; Wilkinson, S and Mbachu, J (2019) An assessment of risk factors impacting budget variability in New Zealand commercial construction projects. In: Gorse, C and Neilson, C J (eds.) Proceedings of 35th Annual ARCOM Conference, 2-4 September 2019, Leeds Beckett University, Leeds, UK.
Abstract
A review of several authors shows that various risk factors abound which potentially impact on the outturn tender sums (OTS) of construction projects from the design-stage elemental cost plans (ECPs)/design-stage cost estimates (CEs). Proper risk analysis could at least partially solve this problem, by lowering the variation between the design-stage ECPs and their OTS. The concern of the current study is the variability between design-stage ECP and OTS, whereas the conjecture is that risk could be responsible for the observed variability. Using a set of 16 risk factors, the study will utilize an online survey of New Zealand (NZ)-based construction professionals to evaluate risk impacts on the variance between ECP and OTS in construction project developments. Survey responses will be analysed using descriptive statistics, mean ranking analysis, degree of risk, coefficient of variation, and Kendall’s coefficient of concordance. With quantitative evidence available, this paper will provide useful information for researchers regarding top risk factors impacting the observed discrepancies (design-stage ECPs and OTS), and this could be relied upon for predictive modelling. From a practical perspective, the study investigation may alert the clients and construction practitioners to specific risk factors they need to pay attention to in their planning and delivery of commercial construction projects, and to devise a proactive approach to their management to avoid significant budget/cost overrun.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | budget overrun; elemental cost plan; New Zealand; commercial projects; outturn tender sum; risk factors |
| Index terms: | budget overrun, construction professional, variation, construction project, risk factor, outturn tender sum, investigation, evidence, cost estimate, statistics, risk analysis, variability, variance, predictive modelling, New Zealand, elemental cost plan, cost overrun, commercial construction, survey, risk impact, construction practitioner |
| Subjects: | prediction and forecasting, financial and cost management, payment calculation, mathematical modelling, construction type, evaluation and assessment methods, data collection methods, statistical analysis, environmental hazards, measurement and scaling, professional development, Geography, contractual condition, production management |
| Topics: | Contract Administration, Information Management, Geographical Context, Project Management, Research Practice, Cost Management, Sustainability, Construction Technology |
| Descriptive scope: | 4 PCEA |
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