Ruben Ndihokubwayo

An analysis of the impact of rework on project performance: Views from the field

Eric Kwame Simpeh et al. — Fri, 05 Aug 2011 02:48:09 PDT

Field diagnosis of causes and effects of rework in higher education residential facilities

Eric Kwame Simpeh et al. — Fri, 05 Aug 2011 02:40:16 PDT

Eric Kwame Simpeh1, Ruben Ndihokubwayo2, Peter E.D. Love3

1, 2 Department of the Built Environment, Cape Peninsula University of Technology, P. O. Box 1906, Bellville 7535, South Africa 1MTech Student, simpeh78@yahoo.com, Tel No. +27 21 959 6317 2Junior Lecturer, ndihokubwayoR@cput.ac.za, Tel No. +27 21 959 6845

3 Department of Construction Management, School of Built Environment, Curtin University of Technology, GPO Box U1987, Perth, WA 6845, Australia, John Curtin Distinguished Professor, p.love@curtin.edu.au ABSTRACT Purpose: The aim of this paper is to examine the causes and effect of rework occurring in construction projects so that effective containment and reduction strategies can be developed. Methodology: Case studies were conducted on purposive selected construction projects based in Cape Town to establish the causes and effect of rework. Specifically, qualitative data was collected by means of observation of physical works, semi-structured interviews with relevant parties directly involved into site operations including the contractor’s management team, consultants and subcontractors, and site instruction record documents were analysed. Findings: It was revealed that changes initiated by the client and the design team due to errors and omissions, poor coordination and integration among the design team were the major contributing factors to rework. Moreover, constructability problems, lack of skills and emphasis on time and cost aggravated the occurrence of rework on site. It was also established that rework has both direct and indirect consequences such as cost for redesign, cost of demolition, litigation cost, poor morale, de-motivation and loss of market share in construction projects. Limitations: Only two multiple storey educational facilities were analysed and as a result the reported findings cannot be generalized. In addition, causal histories for identified rework events tended to be grounded in the views of the contractors and as result there is a potential for bias to exist. However, the findings reported are akin to what the normative literature has reported. Value: The study suggests that design and construction firms must develop organisational measurement systems to track rework. It is only through its determining its frequency and cost can effective strategies for its containment and reduction can be identified.

Waste reduction through lean and agile thinking - the case of variation orders

Ruben Ndihokubwayo et al. — Wed, 22 Sep 2010 01:23:24 PDT

Ruben Ndihokubwayo1 and Theo Haupt2 1The Department of the Built Environment, Faculty of Engineering, Cape Peninsula University of Technology, P.O. Box 1906, Bellville 7535, South Africa

2Director, Building Construction Science (BCS), College of Architecture, Art and Design, Mississippi State University 899 Collegeview, 140 Giles Hall, P.O. Box AQ, Mississippi State, MS 39762

E-mail: ndihokubwayor@cput.ac.za, thaupt@caad.msstate.edu

ABSTRACT Purpose: This study establishes how waste minimisation arising from variation orders can be achieved through lean and agile thinking. Methodology: A literature review focused on exploring the definitions of lean and agile principles and their merits vis-à-vis the reduction of waste from variation orders. Closed-ended questions were presented to a purposive sample of registered project managers in South Africa. Statistical data were analysed using the SPSS package. Findings: The study identified that lean and agile managerial principles of waste reduction were compromised. Loopholes in applying lean principles included the ambiguous briefing of the scope of works and incomplete contractual documents before construction commenced on site. Hindrances in applying agile principles included slow decision and communication to incorporate variation orders into a schedule of works. Findings suggest that the adoption of lean and agile principles would reduce waste. Research limitations/implications: The convenience sample comprised registered project managers. A stratified sample including other professional competencies in the construction industry would possibly have generated more insight on the subject matter. Practical implications: The study increases the awareness of theoretical waste reduction principles that contribute to the prevention of variation orders and their optimum administration. Originality/value: The study explores lean and agile approaches which if adopted would reduce non-value adding activities and consequently the reduction of overall construction delivery costs.

Keywords: Agile, lean, non value-adding, variation orders, waste

Improving Workmanship in the Low-Cost Housing Sector by Reintroducing the Artisan/Skilled Workers Trade Test of Yesteryear

Ruben Ndihokubwayo et al. — Mon, 26 Jul 2010 03:05:50 PDT

Purpose: This research study investigates the problems arising from poor workmanship in construction phases of low-cost housing projects, proposing solutions which can address and reduce these problems. Methodology: A literature study was done but, confined to factors influencing quality of workmanship including factors as time and cost in the low-cost housing sector. In addition to this a questionnaire survey was conducted on purposive Further Education Training (FET) Colleges, construction companies and a professional in the Built Environment based in the Western Cape regions. The respondents were chosen due to their continuous involvement in the low-cost housing sector. Findings: It was revealed that there are limited skilled workers in the construction industry (low-cost housing) at present. Consequently time, cost and ultimately quality related goals are difficult to achieve. Findings suggest the necessity of trade test of yesteryear for skilled workers. Research Limitations: The survey was completed on three FET Colleges and two construction/housing companies and a professional of the Built Environment. However, there were time and logistical constraints, for example meeting each role player at a certain time and certain place was not always possible. This played a huge role in completing two of the surveys. Practical Implications: The research study brings fourth to the low-cost housing sector as well as the construction industry as a whole, that by increasing the percentage of skilled workers, goals such as time, cost and quality could be easily met. Value: The study illustrates that by implementing the trade test of yesteryear many problems experienced with poor workmanship in the low-cost housing sector, such as continued remedial works due to unskilled (makeshift) artisans will be eliminated thereby enhancing time, cost and quality goals.

Keywords: Cost, Low-cost housing, Time, Trade Test, Workmanship.

Information and Communication Technology Uptake and Utilization in the Zambian Construction Industry

Ruben Ndihokubwayo et al. — Mon, 26 Jul 2010 02:46:37 PDT

Purpose: This study is aimed at investigating the level of Information Communication Technology (ICT) uptake in the Zambian Construction Industry and make recommendations on possible interventions. Methodology: A relevant literature on studies done in other countries and in Zambia as well was reviewed. Investigations were done through a questionnaire to purposively selected clients, consultants and contractors registered with the National Council for Construction (NCC) in Zambia. Findings: Preliminary findings indicate that Zambia has not fully appreciated the value of ICT and the impact of its use on the productivity Value Chain management. The delay in ICT uptake in Zambia is limiting advances in construction quality, cost efficiencies and competitiveness of local firms. Among others, suggested interventions included to lobby for increase in Government funding for training; to increase opportunities for more private trainers to participate in ICT training and credentialing; and to engage in more regional collaboration for information exchange on competitive bidding processes and sustainable local contractor development programs. Research Limitations: The survey through the questionnaire had limitations as it relates to industry best practice in the International Arena because of varying applications of construction techniques and methodologies which depend on National ICT policies and nature of ICT infrastructure in Countries where such studies have been conducted. Furthermore, the survey was relatively small compared to the target group of over 2000 industry players accredited to the NCC. This was mainly due to lack of funding for the research. Practical Implications: The study establishes a baseline for future construction sector ICT studies and further registered the sectoral ICT competitiveness of the Zambian Construction Industry. Originality: This is a pilot study regarding construction sector ICT uptake and utilization in Zambia.

Keywords: Construction Industry, global competitiveness, Information and communication technology

IDENTIFICATION OF THE CAUSES OF NON-VALUE-ADDING ACTIVITIES DURING THE CLIENT BRIEFING PROCESS

Ruben Ndihokubwayo et al. — Mon, 26 Jul 2010 02:41:27 PDT

Purpose of this study - This study endeavours to identify the causes of non value-adding activities during the construction client briefing process in order to minimise the occurrence of them in design process. Methodology - A literature review focusing on the identification of the causes of non-value adding activities during the client briefing phase was conducted. Close-ended questionnaires were distributed and interviews were conducted with purposively sampled registered architects, structural designers, project managers, contractors and quantity surveyors in the Central Business District of the City of Cape Town. Findings - The study reports that the construction client briefing process fails to identify and minimise the causes which give rise to activities that do not add value to the design process. It was revealed that an inadequate design brief resulted from the failure on accurate interpretation of building services, inadequate scope of work resulted to changes in drawing specifications, unnecessary redesign drawings arose due to failure in accurate interpretation of the building services and design briefs that did not take complete consideration of client’s requirements resulted in changes in design drawings, hence the existence of non-value adding activities. Practical implications - The study increases the knowledge and understanding of the causes of non-value adding activities during client briefing process. This potentially will reduce the occurrence of non-value adding activities during the design process which will subsequently reduce waste during construction stage. Originality/value - The identification of the causes of non-value adding activities during the construction client briefing process provides a step forward towards the reduction of the non-value adding activities in design process.

Keywords: Causes, client briefing process, non-value adding activities, design process

Identification of The Causes of Non-Value-Adding Activities during the Design Stage

Xolani Nghona et al. — Thu, 08 Oct 2009 03:28:46 PDT

Purpose – This study endeavors to identify the causes of non value-adding activities during the construction design process in order to minimise them. Problem statement – A lack of identification and categorization of major causes and consequences of the non-value adding activities gives rise to unnecessary hidden costs during the design process of the construction projects. Methodological approach - A literature review focusing on the identification of the existence of non-value adding during the design phase was conducted. Close-ended questionnaires were distributed and interviews were conducted to purposive sampled registered architects, structural designers, project managers, contractors and quantity surveyors in the Central Business District of the City of Cape Town. Findings – The study reports that the construction design stage fails to identify and minimize the causes which give rise to activities that do not add value to the project. It was revealed that an inadequate design brief resulted in poor design drawings; poor design management resulted in changes in the design schedule and separated management of design activities influenced the occurrence of ineffective information transfer, hence the existence of non-value adding activities. Conclusion – By paying attention to the causes which give rise to non-value adding activities during the design stage waste reduction will be enhanced.

A preliminary review of the impact of prefabrication on construction health and safety

Luviwe Bikitsha et al. — Thu, 08 Oct 2009 03:10:11 PDT

Purpose – This paper investigates the views of clients and designers relative to the impact of prefabrication on South African construction health and safety. Problem statement –The preoccupation of clients and designers with time, cost, quality and labour based techniques results in resistance to adopting alternative construction methods such as prefabrication which potentially improve construction health and safety. Methodological approach – The literature on government policies, labour based techniques and prefabrication construction methods with regards to health and safety were reviewed. A combination of open-ended and closed-ended questions in a self-administered questionnaire was used to establish the views of clients and designers involved with public sector projects on the use of prefabrication on those projects. Closed-ended responses were captured using SPSS and subsequently analyzed. Responses to open-ended questions were summarized in quantitative form. Findings – It was found that labour based construction methods were widely used in South Africa and the focus on time, cost and quality resulted in construction health and safety being ignored. It was revealed that there was a resistance by clients and designers to use the prefabrication. The lack of understanding of prefabricated construction procedures by the designers reduced the likelihood of the adopting prefabrication. Conclusion –It is imperative that construction stakeholders consider the importance of alternative construction methods such as prefabrication with reference to its improvement of health and safety in the construction industry.

Reduction of Non value-adding Activities associated with Variation Orders through Lean and Agile Thinking

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 03:01:39 PDT

Purpose: This study is a pilot one investigating the existence of waste arising from variation orders and its reduction by means of lean and agile concepts. Design/methodology/approach: A literature review focused on exploring the conceptual definitions of lean and agile concepts and their merits as well. Closed-ended and open-ended questions were posed and sent to purposive sampled registered nationwide project managers. Statistical data outputs were generated using SPSS and subsequently analysed. Findings: It was revealed that by embracing lean concepts relating to preventive measures of work interruptions, among others unambiguous briefing of scope of works and complete contractual documents before construction would reduce the occurrence of variation orders. By adopting agile concepts consisting of flexibility in incorporating a variation order in a schedule of works would achieve optimum use of resources. Research limitations/implications: The survey was conveniently done on registered project managers. Stratified sample including other professional construction industry stakeholders would have generated more insight on the subject matter. Practical implications: The study increases the awareness of theoretical waste reduction concepts that contribute to prevention of the occurrence of variation orders and optimum administration of variation orders. Originality/value: The study explores lean and agile approaches which if embraced will reduce non-value adding activities; hence the reduction of the overall construction delivery costs.

Theories and Concepts for an Increased Cost Adjustment (ICA©) Formula for Optimum Cost Escalation Recovery

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 02:52:54 PDT

Purpose – Rising construction input costs have an adverse impact with regard to optimum cost reimbursement to contractors where contracts allow for increased cost adjustments on some basis. This paper has a two-fold aim, namely to establish the shortcomings of increased cost adjustment methods and to introduce an alternative method. Methodology/Scope – The literature on the shortcomings of existing increased cost adjustment methods was reviewed. The ICA formula was developed based upon a set of assumptions derived from a comprehensive breakdown of contract costs. Findings – After the development of the ICA formula, an illustrative case study comparing the ICA formula over other methods was done. The adjusted amount using the ICA formula was between the amounts obtained using the traditional method and the Haylett formula, hence the optimality of the ICA formula with regard to cost recovery. Research limitations – Given that this paper solely establishes theoretical concepts of the ICA formula. No field work was done, only an illustrative case study was done. Practical implications - The study recommends the use of ICA formula as an alternative method for valuation of fluctuating contracts given its suitability within the current macroeconomic situation. Value/Originality - The study contributes to the existing body of knowledge of both practitioners and academia. It is a scientific demonstration that theoretically and practically recognises the uniqueness of each construction contract with regards to increased cost adjustment. It is anticipated that the adoption of the ICA formula as an alternative method for price adjustment will result in balanced cost recovery/reimbursement between the client and the contractor.

Variation Orders on Construction Projects: Value-adding or Waste?

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 02:47:59 PDT

Purpose – This paper establishes the nature and impact of variation orders on the overall project performance in order to take proactive measures to reduce them. Methodology/Scope – Literature was reviewed on waste associated with variation orders, their origin agents and adverse impact. Quantitative and qualitative methods were adopted consisting of closed-ended and open-ended questions respectively and case studies on construction projects. Case studies consisted of the scrutiny of site instructions in order to discover those that contributed to waste. Findings – Generally it was found that a clause permitting variation orders was an essential feature of any construction project. The client was found to be the most predominant origin agent of variation orders as a result of unclear briefing and changing requirements. Inter alia, problems encountered when dealing with variation orders included time and cost determination which often could be sources of disputes between the contractual parties. The scrutiny of site instructions revealed apparent associated waste especially those involving alterations to completed work by having complete designs before work commenced on site variation orders could be reduced. Research limitations - The analysis of site instructions was done on a limited number of construction projects under construction. Practical implications - The study stimulates the debate over building activities that give rise to non value-adding costs or waste due to the occurrence of variation orders. Value - The findings of the study will increase the awareness of the impact of variation orders on overall construction project performance and will enable the development of proactive measures to reduce them.

Origin-Cause Matrix: A Practical Approach for Identification of Waste Associated with Variation Orders

Ruben Ndihokubwayo — Thu, 08 Oct 2009 02:34:10 PDT

This article has a two-fold aim, namely of reviewing the literature pertaining to waste associated with variation orders and providing a tool for identification of waste zones arising from a variation order. Literature was reviewed about the administration and waste associated with variation orders. Two case studies for the purpose of the study consisted of completed apartment complexes in Cape Town. Variation orders on the respective projects were grouped by number and value in an origin-cause table. The literature review confirmed the likelihood of waste of resources following the occurrence of variation orders. Arguably, the excessive occurrence of variation orders was among factors that contributed to overall higher construction delivery costs and time overruns. By auditing each variation order in terms of the value, origin agent and the cause, it was possible to identify some project aspects that yielded waste of resources. Typically, these were the cost of errors originating from the consultant and the client. The origin-cause matrix could be a tool to provide a breakdown of the probable magnitude of waste associated with variation orders. The study was confined to a limited number of apartment-type construction projects to provide insight into the potential impact of variation orders on project performance. The origin- cause matrix could be a practical tool used to track construction project activities that yield waste. The topic discusses issues that have not been widely covered by previous research studies. The origin-cause matrix was designed as a tool for identification of waste based on a theory of waste formation.

Factors Influencing the Occurrence of Variation Orders and their Impact on Project Performance

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 02:24:30 PDT

Purpose – This paper identifies the factors that influence the occurrence of variation orders with respect to their value-addedness as a proactive measure to reduce them. Methodology/Scope – Relevant literature was reviewed. Both qualitative and quantitative methods were used, consisting of closed and open-ended questions, together with case studies on construction projects. Questions sought the perceptions of practitioners involved in the administration of variation orders about the occurrence of variation orders and their impact on construction projects. Case studies consisted of the scrutiny of site instructions. Findings - A total number of 23 participants from architectural, contracting and cost consultant companies participated in the questionnaire survey. The complexity of works was the most frequent factor influencing the occurrence of variation orders. Cost and time overruns were the most predominant outcomes of variation orders that adversely impacted the project performance; hence the potentiality to yielding non value-adding costs. A total number of 660 site instructions, issued on 3 construction projects, was analysed. It was revealed that 63% of site instructions resulted in additional works, suggesting a need to refocus on the design stage with regards to the reduction of the occurrence of variation orders. It was revealed that 14% of all site instructions had apparent waste associated with them, especially those involving alterations to work already completed. Research limitations - Site instructions from a limited number of construction projects under construction were analysed. Practical implications - The study stimulates debate over building activities that give rise to non value-adding costs due to the occurrence of variation orders. Value - The study aims to increase the awareness of the impact of variation orders on overall construction project performance and will enable the development of proactive measures to reduce them.

An Increased Cost Adjustment Formula (ICA) for Optimum Cost Escalation Recovery for Construction Projects in South Africa

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 02:18:07 PDT

Purpose – Rising construction input costs in South Africa have an adverse impact with regard to optimum cost reimbursement to contractors where contracts allow for increased cost adjustments on some basis. This paper has a two-fold aim, namely to establish the shortcomings of increased cost adjustment methods currently used in South Africa, and to introduce an alternative method. Methodology/Scope – The literature on the shortcomings of existing increased cost adjustment methods was reviewed. The ICA formula was developed based on the breakdown of contract costs. The increase cost of construction materials for a period of 20 years was analysed. A quantitative survey method consisting of closed-ended questions was used to investigate the current increased cost adjustment methods used in South Africa with regard to cost recovery. Findings – After the development of the ICA formula, an illustrative case study comparing the ICA formula over other methods was done. The adjusted amount using the ICA formula was between the amounts obtained using the traditional method and the Haylett formula, hence the optimality of ICA formula with regard to cost recovery. It was revealed that prices for major construction input items such as diesel, petrol, cement, bricks, steel and wood products have risen considerably in South Africa. This suggests that increased cost adjustment methods will be challenging with respect to cost recovery. The survey involved the participation of 8 knowledgeable respondents from contracting and consultant companies. While at least two-third respondents believed the traditional method for increased cost adjustment achieved the optimum cost recovery, several respondents doubted whether the calculated amount using the Haylett formula tallied with the real incurred losses. Research limitations – Given that the study was exploratory, only a limited number of quantitative questions were designed and posed. Future investigations would need to include a qualitative method to gain deeper insight of the situation. Practical implications - The study recommends the use of an alternative method for valuation of fluctuating contracts given its suitability within the current macroeconomic situation. Value/Originality - The study contributes to the existing body of knowledge of both practitioners and academia. It is a scientific demonstration that theoretically and practically recognises the uniqueness of each construction contract with regards to increased cost adjustment. It is anticipated that the adoption of the ICA formula as an alternative method for price adjustment will result in balanced cost recovery/reimbursement between the client and the contractor.

Valuation of Fluctuating Contracts: Need of Policy Revision and Use of Appropriate Adjustment Formula

Ruben Ndihokubwayo — Thu, 08 Oct 2009 02:11:29 PDT

Variation Orders – Construction Industry Stakeholders’ Views

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 02:07:22 PDT

Purpose: This study discusses the problems caused by variation orders and the reduction of their occurrence. Design/methodology/approach: A literature review focused on the identification and administration of variation orders. A combination of open-ended and closed-ended questions and interviews were used to get perceptions of construction industry stakeholders about the occurrence of variation orders. Purposive sampling was followed to identify participants into the survey. Findings: By carefully examining site instructions, it was possible to categorise them and identify those that constituted variation orders. Additional works were mostly associated with variation orders due to incomplete designs and scope of works. It was suggested that there should be adequate time and experienced human resources to deliver a sound design within the proposed time frames. Problems encountered when negotiating variation orders included difficulties with agreement of the time and costs involved. Contractors were dissatisfied with discrepancies between claimed and certified amounts. Research limitations/implications: While the analysis of various stakeholders was treated homogenously, it is acknowledged that difference in opinions might be prevalent between them. Practical implications: The study increases the awareness of the contribution of variation orders relative to their value-addedness. Originality/value: The study discusses an issue that has not been traditionally perceived as important relative to waste contribution.

Construction cost variability: does it really matter? An exploratory study

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 01:58:24 PDT

Purpose of this paper: This study is an exploratory one aimed at investigating the reasons behind construction cost variability and its adverse impact on project performance. Design/methodology/approach: The literature review provides insight into waste associated with cost variability. The cost variations relative to two completed apartment complexes were extracted from the project files of a cost consultant and compared. In particular, the origins and causes of cost variations were examined with reference to their occurrence and magnitude. Findings: 75 and 118 cost variations averaged in total 8% and 4% of contract sums of residential and shopping apartment complexes respectively. Both projects experienced delays of 33% and 9% over the original planned contract duration. The client and the consultant combined as the origin agent initiated cost variations amounting at 92% and 94% of the total cost variations on the respective projects. Design change related costs as the causes of cost variations ranked highest amounting to 85% and 58% respectively. Design changes were identified as the main reason behind construction cost variability subsequently leading to time overruns. Research limitations/implications: Given the exploratory nature of the study, only a limited number of completed projects in Cape Town were examined. The contractor and the consultant team that were involved into the projects were not available for interview. Practical implications: The findings compel the construction industry stakeholders to investigate the origins and impact of variability of construction costs on project performance in order take proactive measure for their reduction. Originality/value: This study tracks the root causes of cost variability in concrete situations and provides insight into the problem.

Introduction to an Increased Cost Adjustment (ICA) Formula

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 01:33:12 PDT

Purpose: This paper is aimed at identifying the shortcomings of the existing increased cost adjustment methods in terms of their non-suitability for use in a highly inflationary economic environment and develops the ICA formula as an attempt for a remedial solution. Design/methodology/approach: The literature focused on the shortcomings of the existing increased cost adjustment methods. A formula was developed based on practical and theoretical concepts and the breakdown of the main components of a contract sum. Informal interviews, thirty-three questionnaires were completed by relevant respondents and analysed. A case study on a construction project compared the profitability margin between the traditional method and the proposed ICA formula. Findings: The traditional method for increased cost adjustment was a predominant one used on almost contracts (91%). More than two-third (67%) of the contractors involved into fluctuating contracts were threatened with cash reserve and almost four-fifth (79%) of the contractors were affected in terms of cost recovery owing mainly to the inefficiency of the traditional method. A case study was done on a project where 5% was used as adjustment for increased cost. The contract sum escalated from Z$1,170,000.00 to Z$61,401,000,000.00 in 22 months. ICA formula was tested and displayed more potential for profit recovery than the actual profit the contractor generated using the traditional method. The profit margin of 13.60% calculated through ICA formula was closer to the allowable profit margin of 15% on the contractor's own works while the contractor generated only 3.31%. Research limitations/implications: Contracts adjusted with Consumer Price Index methods were not available for analysis. The case study was conducted on one project under construction before the settlement of the final account. Further studies of the ICA formula would focus on the determination of parameters associated with its application in relation to the allowable percentage mark-ups applicable in different countries. Practical implications: ICA formula can be an alternative method for increased cost adjustment appropriate with high inflationary environments. ICA formula is anticipated to be a consultation tool serving as a guideline to ascertain the margin for adjustment of increased costs where disputes arise in this regard. ICA formula is also pledged to be applicable to other sectors of business to predict the level of mark-up required for cost increase in volatile market conditions. Originality/value: The improvement of increased cost adjustment methods is necessary especially at this time where the inflation and the continuous increase in construction input cost have become a global challenge to the construction industry.

Uncovering the Origins of Variation Orders

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 01:24:19 PDT

Purpose of this paper - This paper attempts to identify the origin of variation orders in order to determine their impact on waste. The study is part of the undergoing research analyzing the impact of variation orders on project performance. Methodology/Scope - Extensive relevant literature review has been provided. A case study was done on two completed apartment complexes in Cape Town. Origin agents of variation orders were identified. Findings - An exploratory study was done on residential and shopping apartment complexes. Both projects incurred delays and time for completion escalated at 33% and 9% over the original completion time on both respective projects A and B. Arguably, numerous changes during the construction stage influenced time overruns. On project A, a contractor incurred a penalty of R923,000 amounting at 3% of the original contract sum R28,315,000. A total number of 75 and 118 variation orders averaging 8% (R2,076,600) and 4% (R 2,032,919) of the contract sum occurred on both projects. On both projects, the client and consultant combined were the predominant origin agents of variation orders. On project A, the client and the consultant combined generated 89% (67 no) of variation orders. In monetary terms these corresponded to 93% (R1,928,741) of the net total sum. On project B, the client and the consultant combined generated variation orders 95% (111 no) of variation orders. In monetary terms these corresponded 92% (R1,865,862) of the net total sum. Research limitations - The study was confined to a limited number of apartment-type construction projects. The predominant origin agent should be further investigated. Practical implications - The findings uncovered the waste associated with variation orders and revealed the predominant source of variation orders as a proactive measure to reduce them. Value - This paper explores the impact of variation orders on project performance.

Origin and Causes of Construction Cost Variations: An Exploratory Study

Ruben Ndihokubwayo et al. — Thu, 08 Oct 2009 01:10:18 PDT

Purpose of this paper: This study is an exploratory one aimed at examining the origin, causes and impact of construction cost variations on project performance as a result of variation orders and failures. Design/methodology/approach: The cost variations relative to two competed apartment complexes were extracted from the project files of a cost consultant and compared. In particular, the origins and causes of cost variations were examined with reference to their occurrence and magnitude. Relevant literature was reviewed. Findings: 75 and 118 cost variations averaging 8% and 4% of the tender sums in residential and shopping apartment complexes respectively were analysed. In both projects most cost variations arose from variation orders especially design changes and 5% was identified as costs of failures due to either design and/or construction error. There was a correlation between the cost variations initiated by the consultant and the design changes: 80% versus 81% on project A and 58% versus 55% on project B. Arguably, the client could be the main origin agent behind such design changes. The client as an origin agent was highest averaging R90,015 per cost variation. Research limitations/implications: Given the exploratory nature of the study, cost variations on only a limited number of completed projects in Cape Town were examined. The contractor and the consultant team that were involved into the projects were not interviewed. Practical implications: The findings of the study highlight the impact of construction cost variations on project performance and compel all parties involved to give more careful consideration of variations.