Cost overruns in public infrastructure projects: Re-evaluating procurement in an era of digititization

Peter E D Love, Jim Smith, Michael Regan

Research output: Contribution to conferencePaperResearchpeer-review

Abstract

A case study is used to examine the cost performance of 67 public sector infrastructure projects delivered by a contractor. Change orders were found to contribute to a 23.75% increase in project costs. A positive association between an increase in change orders and the contractor's margin was identified. Taxpayers pay for this additional cost, while those charged with constructing assets are rewarded with an increase in their margins. As the public sector embraces an era of digitization, there is a need to improve the integration of design and construction activities and engender collaboration to ensure assets can be delivered cost effectively and future-proofed. The research paper provides empirical evidence for the public sector to reconsider the processes that are used to deliver their infrastructure assets, in order to reduce the propensity for cost overruns and enable future-proofing to occur.
Original languageEnglish
Publication statusPublished - 2017
EventCanadian Society for Civil Engineering Annual Conference: Leadership in Sustainable Infrastructure - Vancouver, Canada
Duration: 31 May 20173 Jun 2017
http://csce2017.ca/

Conference

ConferenceCanadian Society for Civil Engineering Annual Conference
Abbreviated titleCSCE
CountryCanada
CityVancouver
Period31/05/173/06/17
Internet address

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Cite this

Love, P. E. D., Smith, J., & Regan, M. (2017). Cost overruns in public infrastructure projects: Re-evaluating procurement in an era of digititization. Paper presented at Canadian Society for Civil Engineering Annual Conference, Vancouver, Canada.
Love, Peter E D ; Smith, Jim ; Regan, Michael. / Cost overruns in public infrastructure projects : Re-evaluating procurement in an era of digititization. Paper presented at Canadian Society for Civil Engineering Annual Conference, Vancouver, Canada.
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Love, PED, Smith, J & Regan, M 2017, 'Cost overruns in public infrastructure projects: Re-evaluating procurement in an era of digititization' Paper presented at Canadian Society for Civil Engineering Annual Conference, Vancouver, Canada, 31/05/17 - 3/06/17, .

Cost overruns in public infrastructure projects : Re-evaluating procurement in an era of digititization. / Love, Peter E D; Smith, Jim ; Regan, Michael.

2017. Paper presented at Canadian Society for Civil Engineering Annual Conference, Vancouver, Canada.

Research output: Contribution to conferencePaperResearchpeer-review

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AU - Smith, Jim

AU - Regan, Michael

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AB - A case study is used to examine the cost performance of 67 public sector infrastructure projects delivered by a contractor. Change orders were found to contribute to a 23.75% increase in project costs. A positive association between an increase in change orders and the contractor's margin was identified. Taxpayers pay for this additional cost, while those charged with constructing assets are rewarded with an increase in their margins. As the public sector embraces an era of digitization, there is a need to improve the integration of design and construction activities and engender collaboration to ensure assets can be delivered cost effectively and future-proofed. The research paper provides empirical evidence for the public sector to reconsider the processes that are used to deliver their infrastructure assets, in order to reduce the propensity for cost overruns and enable future-proofing to occur.

M3 - Paper

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Love PED, Smith J, Regan M. Cost overruns in public infrastructure projects: Re-evaluating procurement in an era of digititization. 2017. Paper presented at Canadian Society for Civil Engineering Annual Conference, Vancouver, Canada.