Influence of Project Type and Procurement Method on Rework Costs in Building Construction Projects

TLDR

While it is widely recognized that additional costs due to rework can adversely affect project performance, limited empirical research has investigated the influencing factors. The study aims to determine how project type and procurement method influence rework costs and proposes that organizations measure and analyze rework to reduce costs and improve performance. The authors surveyed 161 Australian construction projects to obtain rework costs and analyzed the direct and indirect consequences of rework. Contrary to expectation, rework costs do not vary by project type or procurement method, yet rework accounts for 52 % of cost growth and explains 26 % of its variance.

Abstract

While it is widely recognized that additional costs due to rework can have an adverse effect on project performance, limited empirical research has been done to investigate the influencing factors. The research presented in this paper aims to determine the influence of different project types and procurement methods on rework costs in construction projects. Using a questionnaire survey, rework costs were obtained from 161 Australian construction projects. The direct and indirect consequences of rework are analyzed and discussed. It is shown that, contrary to expectation, rework costs do not differ relative to project type or procurement method. In addition, it was found rework contributed to 52% of a project's cost growth and that 26% of the variance in cost growth was attributable to changes due to direct rework. To reduce rework costs and therefore improve project performance, it is posited that construction organizations begin to consider and measure them, so that an understanding of their magnitude can be captured, root causes identified, and effective prevention strategies implemented.