Examining the effects of early cost drivers on contingencies

Xiong, Bo & Xia, Bo (2014) Examining the effects of early cost drivers on contingencies. In Castro-Lacouture, Daniel , Irizarry, Javier, & Ashuri, Baabak (Eds.) Construction Research Congress 2014, American Society of Civil Engineers (ASCE), Atlanta, Georgia, USA, pp. 1518-1527.

View at publisher


The accuracy of early cost estimates is critical to the success of construction projects. The selected tender price (clients' building cost) is usually seen in previous research as a holistic dependent variable when examining early stage estimates. Unlike other components of construction cost, the amount of contingencies is decided by clients/consultants with consideration of early project information. Cost drivers of contingencies estimates are associated with uncertainty and complexity, and include project size, schedule, ground condition, construction site access, market condition and so on.

A path analysis of 133 UK school building contracts was conducted to identify impacts of nine major cost drivers on the determination of contingencies by different clients/cost estimators. This research finds that gross floor area (GFA), schedule and requirement of air conditioning have statistically significant impacts on the contingency determination. The mediating role of schedule between gross floor area and contingencies (GFA→Schedule→Contingencies) was confirmed with the Soble test. The total effects of the three variables on contingencies estimates were obtained with the consideration of this indirect effect. The squared multiple correlation (SMC) of contingencies (=0.624) indicates the identified three variables can explain 62.4% variance of contingencies, and it is comparatively satisfactory considering the heterogeneity among different estimators, unknown estimating techniques and different projects

Impact and interest:

Citation counts are sourced monthly from Scopus and Web of Science® citation databases.

These databases contain citations from different subsets of available publications and different time periods and thus the citation count from each is usually different. Some works are not in either database and no count is displayed. Scopus includes citations from articles published in 1996 onwards, and Web of Science® generally from 1980 onwards.

Citations counts from the Google Scholar™ indexing service can be viewed at the linked Google Scholar™ search.

ID Code: 71855
Item Type: Conference Paper
Refereed: Yes
Keywords: Cost overrun, Contingencies, Cost drivers, Path analysis
DOI: 10.1061/9780784413517.155
ISBN: 9780784413517
Subjects: Australian and New Zealand Standard Research Classification > ENGINEERING (090000) > CIVIL ENGINEERING (090500) > Construction Engineering (090502)
Australian and New Zealand Standard Research Classification > BUILT ENVIRONMENT AND DESIGN (120000) > BUILDING (120200)
Divisions: Current > Schools > School of Civil Engineering & Built Environment
Current > QUT Faculties and Divisions > Science & Engineering Faculty
Copyright Owner: Copyright 2014 ASCE
Deposited On: 21 May 2014 01:28
Last Modified: 20 Jun 2014 01:38

Export: EndNote | Dublin Core | BibTeX

Repository Staff Only: item control page