TY - JOUR
T1 - Cost performance of public infrastructure projects
T2 - The nemesis and nirvana of change-orders
AU - Love, Peter E D
AU - Irani, Zahir
AU - Smith, Jim
AU - Regan, Michael
AU - Liu, Junxiao
PY - 2017/10/3
Y1 - 2017/10/3
N2 - The cost performance of a wide range of public sector infrastructure projects completed by a contractor are analysed and discussed. Change-orders after a contract to construct an asset was signed were, on average, 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 were 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 digitisation, 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 re-consider the processes that are used to deliver their infrastructure assets so as to reduce the propensity for cost overruns and enable future-proofing to occur.
AB - The cost performance of a wide range of public sector infrastructure projects completed by a contractor are analysed and discussed. Change-orders after a contract to construct an asset was signed were, on average, 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 were 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 digitisation, 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 re-consider the processes that are used to deliver their infrastructure assets so as to reduce the propensity for cost overruns and enable future-proofing to occur.
UR - http://www.scopus.com/inward/record.url?scp=85019757746&partnerID=8YFLogxK
U2 - 10.1080/09537287.2017.1333647
DO - 10.1080/09537287.2017.1333647
M3 - Article
AN - SCOPUS:85019757746
SN - 0953-7287
VL - 28
SP - 1081
EP - 1092
JO - Production Planning and Control
JF - Production Planning and Control
IS - 13
ER -