Purpose
Cost estimating process is an
important element within the project life cycle. Comprehensive information,
expanded knowledge, considerable expertise, and continuous improvement are
needed to obtain accurate cost estimation. The purpose of this paper is to
identify the critical factors that affect accuracy of cost estimation and
evaluate the degree to which these factors are important from contractors’ and
consultants’ viewpoints.
Design/methodology/approach
Qualitative and quantitative
research approaches were adopted in collecting and analyzing the data, and
testing the hypotheses. Based on the literature review, a questionnaire was
prepared and then was modified according to the results of face-to-face
open-ended interviews conducted with 11 project managers. The final version of
the questionnaire was distributed to a random sample of 265 respondents. For
analyzing the collected data Kendall’s and Mann-Whitney tests were conducted.
Findings
The analysis revealed that there is
a strong agreement between contractors and consultants in the ranking of the
factors related to consultant, contractor, design parameters, and information.
A slightly weak agreement between contractors and consultants was noted
regarding the factors related to market conditions (external factors) and
factors related to project characteristics. Furthermore, the results show that
the top ten factors affecting the accuracy of cost estimate are clear and
detail drawings and specification, pricing experience of construction projects,
perception of estimation importance, equipment (cost/availability/performance),
project complexity, clear scope definition, accuracy and reliability of cost
information, site constraints (access, storage, services), material
availability, financial capabilities of the client, and availability of
database of bids on similar project (historical data).
Originality/value
Offers an original view of the
concept of accuracy of cost estimates as it relates to the efficiency of the
project relying on both literature review and empirical evidence.