Journal of Construction Engineering and Management · 2010 · 239 citations · 32 references
ManagementConstruction ManagementProject ManagementConstruction EngineeringConstruction Project ManagementCost ManagementConstruction RiskCost EstimationCost PlanningProject Delivery MethodsProject RiskTransportation Project EvaluationConstruction Cost Overrun ModelingCost Overrun ManagementCost Overrun PredictionHighway ConstructionHighway EngineeringHighway Project EvaluationProject Delivery Method SelectionStepwise Regression
Accurate owner budget estimates are critical to the initial decision‑to‑build process for highway construction projects, yet transportation projects historically experience significant cost overruns. The study investigates why highway projects overrun predicted costs by identifying owner risk variables that contribute to significant cost overrun. The authors use factor analysis, expert elicitation, nominal group technique, and stepwise multivariate regression to rank owner risks and examine correlations with cost overrun, project type, cost, location, and delivery method. The study finds that smaller project budgets are associated with higher cost overruns, suggesting owners should adjust decision‑to‑build estimates to account for economies of scale.
Accurate owner budget estimates are critical to the initial decision-to-build process for highway construction projects. However, transportation projects have historically experienced significant construction cost overruns from the time the decision to build has been taken by the owner. This paper addresses the problem of why highway projects overrun their predicted costs. It identifies the owner risk variables that contribute to significant cost overrun and then uses factor analysis, expert elicitation, and the nominal group technique to establish groups of importance ranked owner risks. Stepwise multivariate regression analysis is also used to investigate any correlation of the percentage of cost overrun with risks, together with attributes such as highway project type, indexed cost, geographic location, and project delivery method. The research results indicate a correlation between the reciprocal of project budget size and percentage cost overrun. This can be useful for owners in determining more realistic decision-to-build highway budget estimates by taking into account the economies of scale associated with larger projects.
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