Predicting buildings construction cost overruns on the basis of cost overruns structure

Abstract

In construction practice, contractually agreed costs are often exceeded, which interferes with the sustainable realization of construction projects. The research described in this paper covers 24 new construction, renovation and reconstruction projects in the Republic of Croatia realized in the years 2006 to 2017, in order to analyse the occurrence of cost overruns more precisely with regard to the source of the overruns. It was found that additional work is the main source of cost overruns: firstly, additional work as a result of the client’s change orders and then unforeseen construction work as a result of unforeseen circumstances. As for the additional works, they are carried out at the client’s request and are not necessary for the safety and stability of the building. Using linear regression and “soft computing” methods, the possibility of modelling the relationship between contractually agreed and realized construction costs with satisfactory accuracy was tested. The model with the values of the natural logarithms of the variables, modelled according to the time–cost model of Bromilow, proved to be of the highest accuracy.

Exploring cultural values and sustainability preferences in housing development: A structural equation modeling approach

“…Sustainability may be seen as behaviors and procedures directed toward meeting our present needs without jeopardizing the requirements of subsequent generations (United Nations SDGs, 2015). Environment, as one of the primary pillars of sustainability, covers the provision of suitable housing and the creation of human settlements that are inclusive, safe, resilient, and long-lasting (Car-Pušić, Tijanić, Marović & Mladen, 2020). This inclusiveness means that essential services should be provided through changes, improvements, and slum upgrading for the growth of both countries, communities, and regions.…”

Performance Management in Czech Construction

“…The predictability can be viewed as a challenging issue due to the fact that time/cost overruns might be caused by numerous variables such as inadequate planning, design changes, an increase of material costs, poor supervision, lack of skilled professionals, unforeseen ground conditions or poor contract administration [15][16][17]. Obviously, more precise cost estimations (in terms of the bill of costs) are at disposal when detailed project documentation is available [18], whereas preliminary estimations in the design phase are quite inaccurate if no advanced approach tools are used [19][20][21]. Furthermore, costs issues related to the project can be improved by the use of cost-optimal construction scheduling approaches [22].…”

“…This significantly affects the achievement of the required financial performance of investors. Many studies in recent years have focused on the development of models that will help to predict future construction costs or overhead costs [21,[35][36][37][38], however, their application by construction practitioners is highly limited. Preliminary cost estimations may also be based on the use of technical-economic indicators that may provide users misleading economic information [39].…”

Critical Factors Influencing Cost Overrun in Construction Projects: A Fuzzy Synthetic Evaluation

“…Wang and Yuan [8] categorized the relevant cost overrun influencing factors into five subjects involving government, owner, design institute, contractor and subcontractor, and 15 cost overrun critical influencing factors are obtained. Furthermore, Car-Pušić et al [9] selected data from 24 public and private cost overrun construction projects from 2006 to 2017 in Istria County, Republic of Croatia, to elucidate more completely the key factors of cost overrun in construction projects through literature and case studies.…”