Assessing risk impacts on the variability between tender sum and final account.

Henry Odeyinka, Keren Larkin, Gervase Cunningham, Robert Weatherup, Mark McKane

Research output: Chapter in Book/Report/Conference proceedingConference contribution

3 Citations (Scopus)

Abstract

In a previous study, the budgetary reliability of the Bills of Quantities (BOQ) in procuring building projects was investigated using secondary data from completed building projects in UK. The study concluded that in procurement methods where bills of quantities were used, deviations between the tender sum in the BOQ and final account figures were observable. In the case of housing projects, the percentage deviation was found to be within an acceptable margin. However in the case of educational buildings, commercial projects and refurbishment projects, the percentage deviation was found to be significantly high in each case. This suggests that the more complex the nature of a construction project, the more likely is the tendency of deviation between the tender sum and final account. This present study therefore seeks to use the risk theory to uncover the explanatory risk variables thought to impact the construction phase with attendant impact on the out turn cost of construction projects. In addition, the study seeks to assess the impacts of the identified risk factors on the observed variability between tender sum and final account. It is a first step in an ongoing programme of research which seeks to model risk impacts on the variability between tender sum and final account.
LanguageEnglish
Title of host publicationUnknown Host Publication
Number of pages16
Publication statusPublished - 3 Sep 2010
EventCOBRA 2010 - Dauphine University, Paris
Duration: 3 Sep 2010 → …

Conference

ConferenceCOBRA 2010
Period3/09/10 → …

Fingerprint

housing project
refurbishment
risk factor
project
cost
method
programme

Keywords

  • construction project
  • risk variables
  • risk impacts
  • tender sum
  • final account.

Cite this

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title = "Assessing risk impacts on the variability between tender sum and final account.",
abstract = "In a previous study, the budgetary reliability of the Bills of Quantities (BOQ) in procuring building projects was investigated using secondary data from completed building projects in UK. The study concluded that in procurement methods where bills of quantities were used, deviations between the tender sum in the BOQ and final account figures were observable. In the case of housing projects, the percentage deviation was found to be within an acceptable margin. However in the case of educational buildings, commercial projects and refurbishment projects, the percentage deviation was found to be significantly high in each case. This suggests that the more complex the nature of a construction project, the more likely is the tendency of deviation between the tender sum and final account. This present study therefore seeks to use the risk theory to uncover the explanatory risk variables thought to impact the construction phase with attendant impact on the out turn cost of construction projects. In addition, the study seeks to assess the impacts of the identified risk factors on the observed variability between tender sum and final account. It is a first step in an ongoing programme of research which seeks to model risk impacts on the variability between tender sum and final account.",
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author = "Henry Odeyinka and Keren Larkin and Gervase Cunningham and Robert Weatherup and Mark McKane",
note = "Contact e-mail: h.odeyinka@ulster.ac.uk Reference text: Akintoye, A. and MacLeod, M. (1997) Risk analysis and management in construction, International Journal of Project Management, Vol. 15, No. 1, pp. 31-38 Asworth, A. (1994) Cost Studies of Buildings. Essex. Longman Group Limited. Baloi, B and Price, A. (2001) Modelling global risk factors affecting construction cost performance, International Journal of Project Management, Vol. 21, Issue 4, pp 261–269 Barnes, M (1990) Financial Control, Engineering Management Series. Thomas Telford. Bennet, F.R. (2003) The Management of Construction: A Project Life Cycle Approach. Butterworth Heinemann. Chapman, R (2001) The controlling influences on effective risk identification and assessment for construction design management, International Journal of Project Management Vol. 19, pp 147-160 Cooke, B and Williams, P. (2009). Construction Planning, Programming and Control. Third Edition. Wiley –Blackwell. Flanagan, R. and Norman, G. (1993) Risk Management and Construction. Blackwell Science, London. Flanagan, R. and Tate, B. (1997): Cost Control in Building Design. Oxford, Blackwell Science Ltd. Harris, F, McCaffer, R. And Edum-Fotwe, F. (2006). Modern Construction Management. Sixth Edition. Blackwell Publishing Ltd. Harper, W.M. (1976) Management Accounting. M and E Handboooks, McDonald and Evans. Heale, J R. (1982) 'Contingency funds evaluation' Transaction of American Association of Cost Engineers B3.1-B3.4 Mason, G. (1973) A Quantitative Risk Management Approach to the Selection of a Construction Contract Provisions. Ph.D. Thesis, Department of Civil Engineering, Stanford University. Morris PWG, Hough GH. (1991). The anatomy of major projects: a study of the reality of project management. Chichester, UK: Wiley. Moavenzadeh, F and Rossow, J. (1976) 'Risks and risk analysis in construction management' Proceedings of the C1B W65, Symposium on Organisation and Management of Construction, US National Academy of Science, Washington DC, USA, 19-20 Oberlender, G.D. (1993) Project Management for Engineering and Construction. McGraw-Hill. Odeyinka, H.A. (2000) An evaluation of the use of insurance in managing construction risks. Construction Management and Economics. Vol. 18, pp 519-524. Odeyinka, H.A. (2007) Modelling risk impacts on the budgeted cost of traditionally procured building projects. Proceedings of The 23rd Annual ARCOM Conference Belfast, pp 755-763 Odeyinka, H.A., Kelly, S. and Perera S. (2009). An Evaluation of the Budgetary Reliability of Bills of Quantities in Building Procurement. The construction and building research conference of the Royal Institution of Chartered Surveyors held at the University of Cape Town, pp 435-446 Pilcher, R. (1992) Project Cost Control in Construction Projects, Second Edition. Oxford. Blackwell Scientific Publications. Porter, C E. (1981) Risk Allowance in Construction Contracts M.Sc. Thesis, University of Manchester, UMIST Potts, K. (2008) Construction Cost Management, learning from case studies. Taylor & Francis Smith, N.J. (1999) Managing Risk in Construction Projects. Blackwell Science Wideman R.M. (1986) Risk Management. Project Management Journal, Vol. 17, no. 4, pp 20-6. Winch G.M. (2002) Managing Construction Projects, Oxford, Blackwell Publishing.",
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Assessing risk impacts on the variability between tender sum and final account. / Odeyinka, Henry; Larkin, Keren; Cunningham, Gervase; Weatherup, Robert; McKane, Mark.

Unknown Host Publication. 2010.

Research output: Chapter in Book/Report/Conference proceedingConference contribution

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N2 - In a previous study, the budgetary reliability of the Bills of Quantities (BOQ) in procuring building projects was investigated using secondary data from completed building projects in UK. The study concluded that in procurement methods where bills of quantities were used, deviations between the tender sum in the BOQ and final account figures were observable. In the case of housing projects, the percentage deviation was found to be within an acceptable margin. However in the case of educational buildings, commercial projects and refurbishment projects, the percentage deviation was found to be significantly high in each case. This suggests that the more complex the nature of a construction project, the more likely is the tendency of deviation between the tender sum and final account. This present study therefore seeks to use the risk theory to uncover the explanatory risk variables thought to impact the construction phase with attendant impact on the out turn cost of construction projects. In addition, the study seeks to assess the impacts of the identified risk factors on the observed variability between tender sum and final account. It is a first step in an ongoing programme of research which seeks to model risk impacts on the variability between tender sum and final account.

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