Time and Cost Overrun Analysis and Mitigation Procedures in Construction Projects

Upon the completion of large national construction projects, their cost and time deviations are often reported. These deviations from the projected values are a result of complications in the time and cost management of such projects. Controlling the cost and time overrun of projects is important for successful implementation and efficient project management. However, few studies have attempted to measure the project cost and time management efficiency in civil engineering projects. In this research, sixty-three large construction projects, which were financially supported by Asian Development Bank (ADB) and government of origin countries that had cost and time difficulties were carefully investigated and configured as Decision Making Units (DMUs) in a Data Envelopment Analysis (DEA) method. Meanwhile a list of associated causes leading to cost and time deviations and percentage of cost and time overrun for each DMU were extracted and provided. The management efficiency of DMU’s was calculated by DEA method and outputs were ordered. The identified results demonstrate that “delay in mobilization by contractor”, “design changes”, “poor project management and supervision” and “severe weather condition” are the four important frequent causes that critically influence the time management performance of projects. Meanwhile “fluctuations and escalations in the prices of material, equipment and labor”, “change in exchange rate”, “underestimated and inaccurate appraisals” and “increase in the land acquisition price and compensation” have the most influence on cost management efficiency score respectively. Moreover “additional works”, “inaccurate initial project scope”, “increase or change in the scope of the project”, and “design changes” are four iv common critical causes that strongly impact both time and cost management efficiency. Furthermore, a sensitivity analysis with the aim of study the importance of frequent causes of time and cost overrun that influence time and cost management performance was performed. According to the results of sensitivity analysis, “design changes”, “delay in mobilization by contractor” and “poor project management, construction management and supervision” have greater influence on time management efficiency. Likewise, results showed that, “underestimated and inaccurate appraisals”, “changes in the exchange rate” and “increase in quantity of works” are the critical causes that cost management performance is more sensitive to them. The first objective of this research is to compare efficiency of different DMU’s regarding to different causes resulting time and cost overrun and mark the causes which critically reduce the management efficiency of large construction projects regarding time and cost aspects. The Second aim is to provide a guide for policy and decision makers in ADB, construction related ministries of governments, contract related units, project managers and contractor companies to pay more attention to the probable problems that may arise and affect the efficiency gaps of those types of projects. This guide is provided through identification roots of each adverse cause, its consequences and recommendations about how to prevent and in which way consequences might be mitigated. Another objective of this dissertation, is developing a website as a knowledge dissemination tool based on the provided data in previous sections for the use of construction practitioners as a decision support system. Keywords: Delay, Time overrun, Cost overrun, Data Envelopment Analysis, Mitigation Measures