Effect of Project Duration Decision at the Bidding Process on Cost Overruns of Sri-Lankan Building Projects

Abstract

Cost overruns are a significant issue in the construction industry, particularly from the standpoint of clients. Many studies have been interested in the unpredictable situations that lead to cost overruns, with the primary goal of pinpointing the precise causative factors. There is a knowledge gap about whether cost overruns could be prevented through effective decision-making at a project’s earliest phases. Therefore, the aim of this research was to critically review if the impact of the project duration decision taken at the bidding process could lead to cost overruns of Sri Lankan building projects, and to provide recommendations of preventive measures to be taken. Deductive research approach and qualitative analysis was used to achieve the four main objectives set for this study. The literature review was able to identify the significant causative factors for cost overrun in the construction industry. The analysis of data collected through questionnaire survey and semi-structured interviews revealed that there are several causative factors for cost overrun, that stem from the project duration being excessive or inadequate : Claims and disputes, inadequate planning and scheduling, unrealistic work schedule, expense due to completion delay and extension of time, and difficulty in predicting the future. This study was able to identify that there is a relationship between project duration decision and cost overrun, where if the project duration decided at the bidding process is excessive or inadequate, it will be causative of cost overruns. Finally, this study has provided preventive measures to avoid cost overrun at the bidding process when deciding the project duration.