Abstract
Cost overruns are a persistent issue in the construction industry. This paper investigates factors that may drive cost growth on public works contracts. The study collected data on 1,043 public works projects completed over a three year period. The analysis examined the impact of four factors on cost overruns: (1) Project type, (2) Contract size, (3) Contract duration, and (4) Construction placement (value per day). The data were analyzed using a combination of basic descriptive statistics along with statistical hypothesis testing of means for various factors affecting cost growth. Cost growth was found to vary significantly by project type, contract size, duration, and construction placement. The project types with the largest contribution to cost growth are New Construction, Building Repair, Utility and Paving. Further analysis of the cost growth investigated the frequency and magnitude of cost growth for different project factors. The results identify different levels of risk of cost growth for different project type and sizes. The findings can assist in the development of strategies to better anticipate or mitigate cost growth of different projects.
Recommended Citation
Fulton, George and Mitropoulos, Panagiotis
(2021)
"Frequency and Magnitude of Cost Growth in Public Works Contracts,"
The Professional Constructor: Vol. 46:
No.
1, Article 5.
Available at:
https://open.clemson.edu/aic-journal/vol46/iss1/5
