assessment of cost control techniques on tertiary institutions project

Description

ABSTRACT

Despite the availability of various cost control techniques and assessment of the effect on Tertiary Institutions Project techniques many construction projects still do not achieve their cost and time objectives. Research in this area so far has main been devoted to identifying causes of cost and time overruns. There is limited research geared at studying factors inhibiting the ability of practitioners to effectively control their projects. To fill this gap, a survey was conducted on construction project organizations, which was followed by face-to-face interviews with experienced practitioners from 15 of these organizations. The common factors that inhibit both time and cost control during construction projects were firstly identified. Subsequently 90 mitigating measures have been developed for the top five leading inhibiting factors-design changes, risks/uncertainties, inaccurate evaluation of project time/duration, complexities and non-performance of subcontractors were recommended. These mitigating measures were classified as: preventive, predictive, corrective and organizational measures. They can be used as a checklist of good practice and help project managers to improve the effectiveness of control of their projects.

TABLE OF CONTENTS

COVER PAGE

TITLE PAGE

APPROVAL PAGE

DEDICATION

ACKNOWLEDGEMENT

ABSTRACT

CHAPTER ONE

INTRODUCTION

• Background Of The Project
• Statement of the Research Problem
• Aim And Objectives Of The Study
• Research Question
• Scope And Limitation Of The Study
• Justification Of The Study
• Significance Of The Study
• Definition Of Terms

CHAPTER TWO

LITERATURE REVIEW

• Tertiary educational building projects (TEBP) in developing countries
• The Evolving Roles of Professional Quantity Surveyor in tertiary institutions project Construction
• Risk factors in construction projects
• Cost Management
  • Definition

2.4.2  Cost planning

2.4.3  Cost estimating

2.4.4  Cost control and monitoring

2.4.5  Cost Control Techniques

2.5.1  Earn value management (EVM)

2.5.2  The evolving of EVM

2.5.3  Programme evaluation and review techniques (PERT)

2.5.4  Critical path method (CPM)

2.5.5  To-complete performance index (TCPI)

2.5.6  Risk analysis

2.5.7  Cost value reconciliation (CVR)

2.5.8  Budgetary control

2.5.9  Cash flow analysis

2.5.10                         Material management

• Components of school Construction Project Delivery
• Challenges of Cost Control Techniques

2.7.1  Lack of reliability in cost management by project managers/project quantity surveyor

2.7.2  Inadequate acquaintance on the utilisation of available tools and technology

2.7.3  Relinquishment of complicated approaches

2.7.4  Using outdated approaches and perceptions

2.7.5  Deficiency of financial dedication in projects

2.7.6  Deficient PCC procedures and framework appropriate to the enterprise

2.8          Other Challenges

CHAPTER THREE

METHODOLOGY

• Research Design
• Research Population
• Sampling Frame

3.3.1        Sampling technique

• Method of Data Collection
• Method of Data Presentation and Analysis

CHAPTER FOUR

4.0       RESULTS AND DISCUSSIONS

• Data Presentation
• Demographic Information
• Cost Control Technique(s) Used in tertiary institutions project
• Challenges of the Cost Control Techniques Used in tertiary institutions project
• Effectiveness of Cost Control Technique Used in tertiary institutions project
• Relationship Between Cost Control Techniques and School Construction Project Delivery

4.6.1        Correlations between cash flow analysis (CFA) and valuation of work in progress (VWP)

• Correlations between cost value reconciliation (CVR) and material management (MM)

4..6.3 Correlations between budgetary control (BC) and cost planning (CP)

• Summary of the Pearson Correlation Results
• Summary of Findings

CHAPTER FIVE

• Conclusion
• Recommendation

CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY

In construction almost all clients are interested in obtaining fully functional facilities completed in time, cost, quality and scope. A builder who so able to construct within the estimated time and budget, to the right standards and scope is an excellent builder. Cost control is a process where the construction cost of the project is managed through the best methods and techniques so that the construction suffer losses when carrying out the activities of the project. One of the aim of cost control is to construct at the cheapest possible costs consistent with the project objectives. Ultimately the decision of the manager that something should be done differently and the translation of that decision into practice are the actions to achieve control (Harris and McCaffer 2022).

Raina (2019) observes that it is of little use after a process has been completed to discover that its cost was actually too much. Most project managers and contractors in Nigeria find difficulty in controlling costs on their constructions sites due to a number of problems which include poor project preparation, lapse in management and control, over budgeting, poor materials, labour shortages, increased cost of materials, delays in deliveries, wastage of materials, unexpected whether changes, loss of materials, insecurity and poor communication. This results into cost and time overruns, conflicts, and sometimes abandoning projects.

The cost control principles are also expected to act as telltale or offer early warning system, notifications of possible budget difficulties at predetermined periods for corrective measures to be decided to solve the cost variances. Opatunji (2018) establish the cost control techniques used among construction Practitioners such as Budgetary control, Cash flow analysis, Earned value management, Cost reduction on site, Material management, Risk analysis, Cost planning, Work programmes, Valuation of work in progress few among others. In the opinion of Adjei et al. (2017) and Khamidi et al. (2011) the project Quantity Surveyor or the Cost Engineer needs to apply the cost control techniques to develop a series of options for the other project members to consider and select one of the best options that fit within the approved budget limit. There exist high numbers of projects that fail to meet critical success factors like cost, quality and time over the years (Hamed et al., 2015). Both private and public sectors in the construction industry have lost substantial amounts of money as a result of failed projects in cost, quality and time.

In the construction industry, very little study has been conducted on the challenges of cost control in any of construction organisation. Researchers such as Adjei et al. (2017); identified challenges of Cost Control Practice in the construction organisation with exceptionally limited literature review and Kirun and Varghese (2015); a literature review was carried out to identify major problems, the techniques used for identify the problem is Delphi techniques. In request to address this problem, this study is intended to assess the effect of cost control techniques used in road construction projects.

This study was therefore carried out to identify the cost control techniques used in Nigeria and propose effective ones to building construction parties. It specially worked at problems faced by the contractors in controlling the cost on site, studied the cost control techniques commonly used by the contractors during the construction stage and proposed remedies to be used by contractors on sites control their costs.

1.2          Statement of the Research Problem

Probably no business needs an effective cost control techniques more than road construction industry. Because road construction companies operate on such a small profit margin due to winning contracts have undoubtedly become fiercer; cost control cannot be overemphasized. On this note, cost management of road construction involves the application of engineering, financial and management practices to optimize the level of service outcome in return for the most cost-effective financial input (Malkoc, 2017). Opatunji (2018) carried out evaluation cost control techniques used in Nigeria but this research was emphasis on construction of building and the data collected was limited to Quantity Surveyors in Oyo state. Ahmad et al. (2012) conducted a research on assessment of practices in Malaysia, the research identified the cost control methods and procedures that construction practitioners in Malaysia are utilized.

Cooray et al. (2018) also evaluate the cost control techniques used on building construction projects in Sri Lanka, the research analyzed the effect of cost control techniques identified with project delivery regarding the s building construction industry in Maldives. Adjei et al. (2017) the challenges of cost control practice in the construction sector, the research identified current challenges of project cost control practice in the construction firm. According to Anyanwu (2013) on project cost control in the Nigerian construction firm; the overall purpose of cost control and the management is to make sure that scant resources are used to the optimum advantages of the main parties to a construction contract.

It is born out of deficiencies in appropriate prediction of cost control techniques used in road construction project. The complexities and foreseen of most element of works in road construction project cannot overemphasized. This study therefore used the idea that, cost control techniques have become a predominant factor to be considered in the road construction projects because of ineffective cost and time control during the execution stage. The research would therefore, increase awareness amongst the construction firm.

 1.3       Aim And Objectives Of The Study

This study aimed at assessing the effect of cost control techniques used in tertiary institutions project with a view to improve project delivery.

Considering the aim, the study addresses the following objectives:

1. To identify cost control techniques used in Tertiary Institutions Projects.
2. To examine the challenges of cost control techniques used in Tertiary Institutions Project

• To measure the effectiveness of cost control technique, used in Tertiary Institutions Projects.

1. To analyse relationship between cost control techniques and tertiary institutions project

1.4          Research Question

1. What are the cost control techniques utilised in tertiary institutions project?
2. What are the challenges of cost control techniques utilised in tertiary institutions project?

• What is the effectiveness of cost control technique, utilised in tertiary institutions project?

1. What is the relationship between cost control techniques and tertiary institutions project delivery?

1.5       Scope And Limitation Of The Study

The research concentrated on Quantity Surveyors/Cost Engineers/Civil Engineers working with construction firms. This study excludes the cost control techniques practised by contractors in the pre-construction, construction and post construction stage. It also excluded cost control procedures related to the accounting and financial management of the company. The project parties studied was civil engineering contractor involve in construction.

The project parties examined was construction firms. involve in road construction. The research addressed road construction projects in Abuja-FCT only, Nigeria. The study used construction firms that are registered with the Corporate Affairs Commission and the Federation of Construction Industry in Nigeria, also involved in road construction works. Perversely only contractors of category “A” and “B” under the classification of contractors by The Bureau of Public Procurement (BPP) form the sampling frame, as only larger companies are financially capable of using any effective cost control techniques and also only highway road type was focused in which includes any public roads.

1.6       Justification Of The Study

In order to justify the gap of this study, the contributions of the following researchers cannot be overemphasised. Ahmad et al. (2012) identified the cost control methods and procedures utilised by the construction practitioners in Nigeria. Cooray et al. (2018) considered analysis of cost control techniques used on building construction projects and the research analysed the impact of cost control methods related to project delivery with respect to the building construction industry in Nigeria. In another study, Adjei et al. (2017) noted the challenges of cost control practice in the construction industry, and identified the current challenges of project cost control practice in the construction industry. Anyanwu (2013) researched on the project cost control in the Nigerian construction industry, the overall aim of cost control and management is to make sure that scarce resources are utilized to the optimum benefits of the main parties to a construction contract. In another study, Opatunji (2018) evaluated cost control techniques used in Nigeria but the research focused on construction of building and the data collected was limited to Quantity Surveyors in Oyo state. In another investigation, Ayodele and Alabi (2014) explored on the impact of cost control on building projects delivery in Nigeria. Kirun and Varghese (2015) researched the issue of project cost control in building projects and to comprehend the purposes for cost overrun; the utilization of Delphi method is to recognize the issues in controlling the project cost, recommend solutions for overcome these problems, and identifies lessons learned.

None of the previous researchers had evaluated and analysed the cost control techniques including the effect on road construction project delivery. Most of the literatures have documented failures in construction projects (Building). Thus, cost control techniques have become a dominant factor to be considered in the road construction projects due to unsuccessful cost and time control during the implementation stage. This study will however fill the gap by assessment of cost control techniques on Tertiary institution project delivery. The outcome of this research work would therefore, be beneficial to construction firm as their main aim is to minimize cost..

1.7       Significance Of The Study

This research work will be useful for both professionals in the building industry and their clients but principally is will be more useful for students in tertiary institutions and there are lots of other benefits which cannot be measured.

However, it states vividly the cost implications of wrong device of building materials on construction project. Meanwhile it is pertinent for client to consult the professionals in the field of construction such as Architect, Civil Engineer, Quantity Surveyor, Builder, etc. so as to meet the required taste in accordance to building standards.

This project also facilitates estimation of construction project and other professional services.

More so, it helps building owners and bring into reality and assisting prospective project owners in selecting standard prospective project owners in selecting standard building materials for construction project.

1.8       Definition Of Terms

1. TECHNIQUES: Is procedure used accomplished a specific activity or task
2. COST: An amount that has to be paid or given up in order to get something
3. CONTROL: Is the power to influence or direct people’s behaviour or the

course of event

1. DEVELOPER: Person or a firm that improves raw land with labour and

capital, and arranges for utilities.

1. BUDGET: An estimate of costs revenues, and resources over a specified

period. reflecting a reading of future.

1. INSPECTION: Is most generally, an organized examination or formal

evaluation exercise. In engineering activities.

1. PAUCITY: Is the present of something only in small or insufficient quantities

or amount; scarcity.

CONSTRUCTION

Isic (UN 1968) defined construction as a process by which building and civil engineering works are procured, altered, repaired, maintained and demolished.

1. PROJECT

OwunSonye (2005) defined project as a structure which are erected in accordance with idea of the designer.

1. FLUCTUATION

Olateru (1982) defined fluctuation as change in price of building materials in upward or downward movement.

1. BUILDING MATERIALS

Researcher defined building mate arils as the materials used in construction of building project.

1. LABOUR

Researcher defined labour as a manual or mechanical effort of men used in execution of a project.

1. MARKET SURVEYING

Onwusonye (2002) defined market survey as the process of visiting market in other to know the current price of building materials.

1. MARKET SCHEDULE

The researcher defined market schedule as the result of price of building materials investigated after market survey.

CHAPTER FIVE

• CONCLUSION AND RECOMMENDATIONS

5.1              Conclusion

From the study, the cost control techniques investigated, only 6(six) out of 19(nineteen) are used on average in the tertiary institutions project in Abuja, Nigeria. Few Quantity Surveyors (Cost Managers) are engaged with the critical cost management of tertiary institutions project unlike building projects. The research also reveals that cost control techniques have strong impact on tertiary institutions project delivery. It was strongly agreed that Cash Flow Analysis was the most effective cost control technique used in tertiary institutions project. Next were Cost Value Reconciliation and Valuation of Work in Progress which were ranked second and third as the effective cost control techniques used in tertiary institutions project.

The research shows that Inadequate acquaintance on the utilisation of available tools and technology affect the practice of cost control techniques.

5.2              Recommendations

The point of convergence of this research was to examine cost control techniques utilised in tertiary institutions project and the effect they have on project delivery. These techniques, if properly implemented and more construction cost manager (Quantity Surveyors) are involved, these will bring about tangible reduction in the costs of a tertiary institutions project.

In light of the study, the accompanying proposals are being made:

1. Quantity surveyors should involve in tertiary institutions project construction due to the area of their discipline as cost expertise which they have better attitude towards using these
2. The cost manager, (for example the quantity surveyor trained explicitly for the purpose) should also exhibit the foresight in predicting and arresting those constraints that are related with road projects which may either impede the progress of work or extend the predetermined project period, along these lines increasing project cost.

• Construction firms should endeavour to send their employees to attend workshops, seminars and other training programs that will enlighten them on how to use the other

1. This will refresh and widen the necessary knowledge for controlling cost of their

5.3              Contribution to Knowledge

4. This research work has been able to assessed and identify the cost control techniques used in tertiary institutions project and their effectiveness of those techniques with a mean of 4.68 that Cash Flow Analysis (CFA) was the most effective cost control technique used in tertiary institutions project and thus ranked first (1^st). Next were Cost Value Reconciliation (CVR) and Valuation of Work in Progress (VWP) which were ranked second (2^nd) and third (3^rd) as the effective cost control techniques used in tertiary institutions project with a mean score of 4.20 and 3.96 individually.
5. Also, this research work examined the various challenges of cost control techniques and analysis the effect of techniques on the tertiary institutions project Challenges such as inadequate acquaintance on the utilisation of available tools and technology, deficiency in financial dedication in projects and fluctuation in prices of raw materials were ranked first (1^st), second (2^nd) and third (3^rd) with mean score of 4.36, 4.24 and 4.20 respectively.

• The outcome of this research work will be beneficial to quantity surveyors and project managers as their main aim is to minimize cost. It will also create a path for further researches in this area.

5.4              Areas for Further Studies

Findings of the study give conceivable direction to further research in following areas;

1. The research was restricted to construction participants in Abuja metropolis, further studies can be conducted in other states of the
2. Further researches can be done on mitigating solutions to the identified challenges of cost control techniques.

• Other techniques can be implemented and also analyzed which can serve as an area for further research.