Factors Affecting Schedule Delay, Cost Overrun, and Quality Level in Public Construction Projectsby Jesper Kranker Larsen, Geoffrey Qiping Shen, Søren Munch Lindhard, Thomas Ditlev Brunoe

Journal of Management in Engineering

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Year
2015
DOI
10.1061/(ASCE)ME.1943-5479.0000391
Subject
Management Science and Operations Research / Engineering (all) / Strategy and Management / Industrial relations

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Factors Affecting Schedule Delay, Cost Overrun, and

Quality Level in Public Construction Projects

Jesper Kranker Larsen1; Geoffrey Qiping Shen2; Søren Munch Lindhard3; and Thomas Ditlev Brunoe4

Abstract:As a result of the loss of financial resources and the need to optimize projects, academics, politicians, and the construction industry have become increasingly aware of the challenges presented by the frequent time and cost overruns and reduced quality of construction projects. The purpose of this study was to analyze the factors that project managers experience as having the greatest effect on time, cost, and quality, and to discover whether the effects of these factors are significantly different from each other. A questionnaire with 26 factors identified from interviews was sent to the full population of publicly employed project managers. Factors were ranked using the relative importance index and tested for significant differences using Friedman’s test. Wilcoxon’s test was used in a post-hoc analysis. From the findings it was determined that the most influential factor for time is unsettled or lack of project funding; for cost, errors or omissions in consultant material; and for quality, errors or omissions in construction work. The main conclusion of this research is that project schedule, budget, and quality level are affected in significantly different ways. Therefore, a project manager cannot handle such critical issues by focusing only on schedule or budget complications; nor can he or she assume that time, cost, and quality are equally affected.

DOI: 10.1061/(ASCE)ME.1943-5479.0000391. © 2015 American Society of Civil Engineers.

Author keywords: Construction management; Cost overrun; Denmark; Quality level; Schedule delay.

Introduction

Delays in construction projects, cost overruns, and low quality have long been common problems in the construction and engineering sector. In particular, time and cost increases in large public construction projects seem to be a global phenomenon, with no reduction in the last 70 years and an average cost overrun of 28% (Flyvbjerg et al. 2002, 2003). Optimistic expectations of time and budget have, as a consequence, been found to decrease quality and productivity during construction and in the final product (Park et al. 2010).

To reduce such overruns, the existing body of knowledge tends to focus on critical success factors associated with time and cost as individual concepts of different project types and geographical regions, with little frame of reference. Aibinu and Odeyinka (2006),

Al-Kharashi and Skitmore (2009), and Kazaz et al. (2012) studied the causes of schedule delays and their effects on the time concept.

Iyer and Jha (2005) and Shane et al. (2009) studied cost escalation factors in construction projects as they affect the cost-related concept. Finally, Kaliba et al. (2009), Koushki et al. (2005), and

Olawale and Sun (2010) studied cost and time concepts as interrelated, which fits Hancher and Rowings’s (1981) definition of a successful project as one that meets both budget and deadline according to the contract. The current study introduces quality to the debate over time and cost, seeing quality, time, and cost as interrelated concepts because all three have been central in the construction literature. Together, they are known as the “iron triangle.”

Comprehensive studies focusing on time, cost, and quality as interrelated are essential for demonstrating significant differences between the three elements of the “iron triangle” and for extending the existing body of knowledge.

A potential solution to the problem of determining the effects of critical success factors on construction projects is increased preproject planning (Yang et al. 2012). The benefits of preproject planning include increased profit, reduced risk, and higher quality (Barker et al. 2004; González et al. 2008; Hanna and Skiffington 2010;

Hwang and Ho 2011). The effort spent in this early project stage affects the level of success during start-up and in the detailed design and construction stages (Chang et al. 2010; Yang and Wei 2010).

This finding is supported by Thomas and Ellis (2007), who used simple preproject planning methods to reduce preliminary construction duration by up to 30%. Hanna and Skiffington (2010) argued that increased construction planning allows the contractor to be more proactive than reactive regarding critical factors that affect a project. According to Gibson et al. (2006), the positive effects of realistic planning for cost and time before design, as well as during the construction stage, are improved project outcome, greater user satisfaction, and reduced project cost and duration. For these reasons, identifying and testing for significant differences in the impacts of the critical success factors on time, cost, and quality are vital in dealing with these factors in preproject planning as a way to secure the best project outcome.

The threefold aim of this paper is thus • To present the factors that have the most negative effect on time, cost, and quality; 1Ph.D. Fellow, Dept. of Mechanical and Manufacturing Engineering,

Aalborg Univ., Aalborg East, 9220, Denmark (corresponding author).

E-mail: jkl@m-tech.aau.dk 2Professor, Dept. of Building and Real Estate, Hong Kong Polytechnic

Univ., Hung Hom Kowloon, Hong Kong. E-mail: bsqpshen@polyu.edu.hk 3Assistant Professor, Dept. of Mechanical and Manufacturing Engineering, Aalborg Univ., Aalborg East, 9220, Denmark. E-mail: lindhard@ m-tech.aau.dk 4Associate Professor, Dept. of Mechanical and Manufacturing

Engineering, Aalborg Univ., Aalborg East, 9220, Denmark. E-mail: tdp@ m-tech.aau.dk

Note. This manuscript was submitted on October 2, 2014; approved on

April 9, 2015; published online on June 8, 2015. Discussion period open until November 8, 2015; separate discussions must be submitted for individual papers. This paper is part of the Journal of Management in Engineering, © ASCE, ISSN 0742-597X/04015032(10)/$25.00. © ASCE 04015032-1 J. Manage. Eng.