Johnson Adafin

Why do the design stage elemental cost plan and final tender sum differ in New Zealand

Purpose – The aim of this study is to investigate the reasons for disparity between design stage elemental cost plan and final tender sum (contract sum) in building procurement. A number of risk factors responsible for such variation were identified through case study projects from which data were extracted. Design/methodology/approach – Literature review determined the risk factors inherent in the preparation of design stage elemental cost plan. Interviews and thematic analysis identified the risk factors responsible for the disparity between design stage elemental cost plans and final tender sums. Analysis of documents obtained from the archives of study participants (consultant quantity surveyors) complemented responses from the interviews. Findings – The review revealed a number of inherent risks in the design stage elemental cost plan development. The interviews further indicated that risks have an impact on and are responsible for the deviations experienced. The assessment of these risk elements cou...

Determining significant risks in the variability between design-stage elemental cost plan and final tender sum

AbstractSeveral researches have indicated that pre-tender estimating inaccuracies are significantly influenced by the level of risk information available to estimators. This study first identifies risk factors that influence variability between design-stage elemental cost plan and final tender sum (contract sum) in traditionally procured commercial building projects. It further evaluates the identified risk factors through risk measurement to determine the most significant ones during design development. Project data from New Zealand were obtained through online questionnaire and interview surveys to determine the construction consultants’ perspectives. Responses to the survey were analyzed by using descriptive statistics, risk mean analysis (RMA), degree of risk, coefficient of variation, and Kendall’s coefficient of concordance. A ranking of mean scores of the survey responses enabled the most significant risk factors to be determined. Interviews were analyzed by using thematic and documentary methods t...

Risk impact assessments in project budget development: architects’ perspectives

ABSTRACT Knowledge of how risks combine to impact variability between design stage elemental cost plans and final tender sums, in traditionally procured commercial building projects, from the architects’ perspectives in NZ is yet to be investigated. This study therefore evaluates identified risk factors through risk measurement, in order to determine the most significant. Data for the study were collected through an online questionnaire survey of 82 practising architects in NZ. Responses to the survey were analysed using descriptive statistics, risk mean analysis, degree of risk and Spearmans correlation. A ranking of the mean and degree of risk values enabled the most significant risk factors during design development to be determined. The findings revealed the top 10 risk factors impacting the variability observed. Armed with this information, architects may be better able to provide information on the influence of design- and construction-related risks on building project performance and, consequently the clients cash flow position. Moreover, as risk elements are inherent in construction projects globally, these findings have ramifications for commercial projects by expanding existing knowledge on what is needed for reasonable budgetary performance and successful delivery of construction projects.

Accuracy in Design Stage Cost Estimating through Risk-contingency Analysis: A Theoretical Exploration

Risk-contingencies can strongly influence cost certainty if properly evaluated and managed. Accuracy of early cost estimates is a major concern for construction industry practitioners in New Zealand, especially quantity surveyors. Several researchers have long expressed their concern about cost estimating inaccuracies by recognizing that the accuracy achieved in cost estimating has been less than desirable. The essence of having an accurate design stage cost estimate as a reliable budgetary tool is defeated if risk estimates are not incorporated or not properly evaluated if incorporated. Hence, project objectives regarding cost, time, and quality targets are threatened as contingency is proportional to the risk present in a construction project. Therefore, the aim of this study is to signify the design stage cost estimating as a function of risk-contingency reserve. This study is a literature-based theoretical exploration and part of an ongoing doctoral research on the budgetary reliability of a design stage elemental cost plan. As a first step, a detailed review of related literature was made to establish the risk elements inherent in preparing the design stage cost estimate. Secondly, various factors affecting design stage cost estimating accuracy in construction practice were identified by demonstrating the theoretical context. The insights gained from the foregoing steps then helped in devising theoretical concepts for securing the design stage cost estimate as a reliable budgetary tool that guarantees cost certainty for building projects through risk-contingency analysis.

Risk impact assessments in project budget development: quantity surveyors’ perspectives

Abstract One aspect of construction project budgeting requiring attention is the inaccuracy of early estimates during design development. Accuracy of estimates is important to project owners and their financiers. However, inconsistent risk information makes this difficult to achieve. Proper risk analysis could offer a partial solution by reducing the variance between design-stage elemental cost plans (ECPs) and final tender sums (FTS) of construction projects. This study first identifies risk factors that influence variability between ECPs and FTS. It further evaluates the identified risk factors through risk measurement to determine the most significant during design development. Data for the study were sourced from 62 practicing quantity surveyors (QS) through an online questionnaire survey. Survey responses were analysed by using descriptive statistics, risk mean analysis (RMA), degree of risk measure and Spearmans correlation. The Statistical Package for the Social Sciences (SPSS) software facilitated the analysis, and top ten risk factors were found important for practicing quantity surveyors in New Zealand (NZ). The identified risk factors were responsible for the variability observed. The values obtained from the analysis would enable greater accuracy in the forecast of FTS by quantity surveyors. As a main contribution, the study creates awareness of the risk factors that should be given considerable attention by consultants at project outset, to guard against wide variation between the design-stage ECPs and FTS. This knowledge could assist quantity surveyors to pro-actively manage their clients fund. In addition, these findings can assist in the development of a predictive model that construction industry practitioners in NZ could use for reliable estimation of FTS from the design-stage ECP.