Cost Overrun Issue in Construction Management and Construction Industry

Cost Overrun 1
COST OVERRUN ISSUE IN CONSTRUCTION MANAGEMENT AND CONSTRUCTION
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Cost Overrun 2
Introduction
Cost overrun
Cost overrun is quite a common issue in construction management and construction
industry especially in the implementation of large and complex projects. Preparing cost
estimation in much earlier than the time the project need to be implemented causes serious
anomalies in the quotation. This happens because the quantity surveyor in most cases to not take
care of the contingencies (Gwaiz, et al., 2006). In general, there are a number of factors that may
lead to cost override in the implementation of a project. One of the most common problems
experienced in construction site are delays in completing certain stages of construction caused by
issues such as late delivery of materials in a construction site. Another factor may be lack of all
the construction details and specification which may either be incomplete or inadequate. This
inefficiencies in the construction blueprint causes project managers to seek for help form the
relevant experts such as the architect, structural engineer or civil engineers which ultimately
waste a lot of time (Ahady, et al., 2017). In worst case scenario, the construction project can
come to a standstill when the project manager does not immediately or fail to address these
problems.
The issue of cost override can be addressed by constantly doing a thorough market
research to ascertain the right prices of materials and equipment to be used in construction to
ensure that the budget estimate are up to date with the current market prices to avoid any
surprises during implementation (Alghonamy & Abdulaziz, 2015). Even though, this move
might not give us the actual prime cost of the project, it will still reduce the gap of the
provisional sum of the expenses and if the budget will be higher, then it will not be as much.

Cost Overrun 3
Contractors and project managers should ensure that thy understand project brief when acquiring
the plans including the specifications of the project to avoid any misinterpretation that may lead
to compromising the quality of the project and delays which ends up affecting the cost
(Belachew, et al., 2017). Hence, getting expert assistance in such circumstances is very important
in order to save on cost and the time taken to complete the project. Experience also plays a role
in this, suppliers of materials should learn from their past experiences to make the next project
more effective and successful. For this reason, project managers will have to rely on reliable
suppliers to avoid any extra cost that may be caused by delays in delivering materials to the
construction site (Decoster & Claypool, 2004).
However, there are other factors that can cause cost overrun but cannot be easily solved
by project managers as the other mentioned issues regardless of how effective they coordinate
the project requirements and manage the whole system in an effective manner (Enshassi, et al.,
2003). This factors include the uncertainties in the market prices of equipment and materials
required in construction, unpredictable human resource issues, in accurate cost estimation
compared to the actual construction cost.