An investigation into cost variations in fit-out construction projects

Construction projects are always complicated and complex by the reason that they are a combination of technical subjects based on science and management subjects based on humanities The existence of many participants and various factors composes the complex and inconsistent network. Lifestyle and demands of the end-users' expose the construction projects to changes during the execution phase. The factors for evaluation of the success of the project are various however the completion of the project in the expected budget is an important criteria for all of the project participants. As for the achivement of the success of the project in terms of cost are related to accuracy of the estimated cost preapared by design and tender documents and other factors that affecting the cost. The estimated cost which are affected by these factors become actual factors at the closing phase. The differences between the estimated cost and the actual cost are defined as cost variaitons. Awareness about the importance of the cost variaitons and determining the causes of the cost variations are considerablely important to accept the project is successful. These causes are listed various times among the different possibilities and determined project groups by researchers. On the other hand, the studies over the "fit-out" projects that are spread out by the popularity of the lately life styles are fewer. As the prevalence of the fitout projects are enhanced the researches in this area become important. Completion and commissioning of the shell and the structure of the specific building is called "shell and core", completion and operation of the rest of each seperated part by their users' is called "fit-out" projects. Therefore the extent of the fit-out projects are narrower due to the similartiy of the work items. Nevertheless, cost variations in fit-out project are seen widespread. Determination of the cost variations in which areas and in which work items are important to make provision for these areas and to mitigate the cost variations. Determination of the most effective work items in cost for the fit-out projects and to take cognizance of these work items may be a solution for the mitigation of the cost variations. Presented research remarks the causes of the cost variations and their consequences. The main aim of this research is to identify the significant work items having cost variations in the fit-out projects. Number of methods are used to gather the data while the work items are identified. As a result of the searches by the previous studies are used to determine the causes of the cost variations. These causes are invastigated under four categories following: changes during the construction process, contractual issues, the efficiency of the project management and the accuracy of the estimated cost. After the literature investigation, 10 fit-out projects of a company are used as case studies to list the most effective work items on cost. The results of the case studies are discussed with the authorized persons in the projects to establish the causes of the detected cost variations. The authorized persons who was choosen are selected from different departmants to include the different perspectives. The relations between all data obtained are discussed to achieve the conclusion. Gathered cost variation factors from literature survey, quantitative data from case studies and causes of the cast variaitons in the case studies are explained in the conclusion section in detail. The results are summurazied under two subtitle: the most effective work items on cost variations and common causes of cost variations in fit-out projects. 8 work items are listed when the mean of 80% of actual costs are calculated, these work items are Finishes, Furnitures, Openings, Metals, Existing Conditions, Electrical works and Concrete works based on the impact on actual cost. The mean percentage of the accured cost work items are 35,20% for Finishings, 22,63% for Furnitures, 15,32 for Openings. The mean cost variation and change order values are established through 80% of actual costs. The information gathered from the inteviews summarize that the common causes are change orders, delay in decision of the owner, unefficincies during the design and construction and communication problems. The results obtained from this research contains data both for the owners and the contractors to reduce the variations. The contractor can estimate the contingencies and their costs by using the mean of the change orders for the work items during the tender process. The precautions can be set during the execution phase to avoid the mostly occurred changes and factors affecting the cost. Contractors and owners can discuss about the remarkable subjects for the contract and negotiate for changes in contract to reduce the change orders and cost variations. Owners can determine on their budget by the prescience of the variations while they decide the bidding price of contractors. Owners can have information for the important points of the project delivery systems and payment methods. Consequently, the impact of the detected work items and the factors affecting the cost variations on these work items by the regard of this research have an important part on the success of the projects. The consideration of these results during the planning will get closer the projects to the success more.