COST OVERRUN FACTORS IN PRE-CONTRACT AND POST-CONTRACT STAGES: A CRITICAL ANALYSIS

Abstract

“Cost overrun” is considered as an unavoidable phenomenon in the construction industry. Despite the professional effort and adaptation of advanced technologies, still the construction industry experiences cost overruns. Especially, among many stakeholders, contracting organizations are one of the key stakeholders that would be highly affected by the construction cost overrun. Poor coordination between the pre & post-contract stages in the contracting organizations has been a critical issue over many decades which leads to cost overruns. Professionals involved in the pre-contract stage have not possessed the knowledge regarding the significance of the cost overrun factors that may appear in the post-contract stage and vice versa. Therefore, this research aims to comparatively analyze the significance of cost overrun factors in the pre & post-contract stages in Sri Lankan construction projects from the perspective of industry professionals. A total of 5 semi-structured interviews were conducted among professionals who have experience in cost estimation and post-contract cost management in contracting organization to categorize the selected cost overrun factors into pre-contract and/or post-contract stages. Then, a questionnaire survey was conducted to evaluate the significance of those categorized cost overrun factors. A total of 80 responses were collected from the questionnaire survey and the data were analyzed using statistical analysis. Then the quantitative data was analyzed using the Mann-Whitney U-Test. The results of the Mann-Whitney U test concluded that there is a statistically significant difference between the perspective of professionals involved in the pre & post-contract stage.