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

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.