Assessment of Time and Cost Overruns in Construction Projects (Case Study at Defense Construction Enterprise)

Abstract

In DCE the number of construction projects is increasing from time to time. However, it becomes difficult to complete projects in the allocated cost and time. Taking this into consideration, time and cost overruns is one of the major problems in the construction projects. Therefore, this research is carried out to make assessment on the factors that cause time and cost overruns of construction projects, their effects and resolutions. Questionnaire survey together with desk study was used to collect data on time and cost overruns. Desk studies of 10 completed construction projects were investigated, and from the analysis it was found that 100% of the construction projects suffered by both time and cost overruns. The rate of time overrun ranges from a minimum of 13% to the maximum of 181% of the contract time, and cost overrun ranges from a minimum of 1% to the maximum of 47% of the contract amount. A total of 48 questionnaires were distributed and collected from DCE managers, team leaders and experts. From the analysis of the questionnaire response, the top main significant causes of time and cost overruns are less emphasis to planning (MS: 2.92), poor contract management (MS: 2.88) and poor pre planning process (MS: 2.88). The top ranked effects of time and cost overruns identified by this research are the contribution of the construction industry to the growth of national economy of the country will be less (MS: 2.75), delayed payments to contractor (MS: 2.75) and inability to deliver value for money (MS: 2.67). Assessment of Time and Cost Overruns in Construction Projects By Merid Taye IGNOU-SMU, School of Management Studies September, 2016 Page VIII The top ranked resolution methods recognized by the respondents are timely progress control, schedule control, cost control, resource control by comparing with the completion date and cost (MS: 3.33), assign competent personnel (MS: 3.13) and effective strategic planning (MS: 3.00). Finally, the study recommended DCE to have committed leadership and management, timely decision process, advanced contract and project management, systematic control mechanism and effective and efficient strategic planning and management