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  • Faculty of Design and Creative Technologies (Te Ara Auaha)
  • School of Engineering, Computer and Mathematical Sciences - Te Kura Mātai Pūhanga, Rorohiko, Pāngarau
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Evaluating the budgetary reliability of design stage elemental cost plan in building procurement: a New Zealand study

Adafin, J; Wilkinson, SJ; Rotimi, JOB; Odeyinka, HA
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2016 cidb JA.pdf (854.9Kb)
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http://hdl.handle.net/10292/9566
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Abstract
Accurate prediction of final tender sums (contract sums) of building projects depends on

reliable projections of baseline cost plans developed at the design development stage.

However, no matter how much care and effort is put into the preparation of design stage

elemental cost plans, deviations are usually observed between these cost plans and the final

tender sum. This makes accurate predictions challenging for construction practitioners in

New Zealand. The major attributable factors for the observed variability are inherent risks

in the design stage elemental cost plan development. Whilst this is recognised, this study

evaluates the reliability of elemental cost plans in traditional building procurement. The

study seeks to answer the question: is elemental cost plan a reliable budgetary tool for

construction projects? The study was undertaken based on 20 completed building projects

from which secondary data were collected within the New Zealand construction industry.

Data analysis was carried out using document analysis and percentage deviation of final

tender sums from the cost plans. Further analyses were carried out using root mean square

and relative mean absolute deviation methods of analyses. The results showed that the

budgetary reliability of elemental cost plans varied depending on project types. Whilst a

deviation of -3.67% and +3.95% was obtained on the residential projects analysed, the

deviation on educational projects was between -3.98% and +12.15%. Commercial projects

attracted -14.22% and +16.33% while in the case of refurbishment projects, a deviation of

-10.07% and +30.14% was obtained. These findings suggest that the larger or more

complex a project is, the less reliable it is to use elemental cost plans to guarantee cost

certainty.
Keywords
Elemental cost plan; Final tender sum; New Zealand; Reliability; Traditional building procurement
Date
2016
Source
9th cidb Postgraduate Conference held at Cape Town, South Africa, 2016-02-02 to 2016-02-04
Item Type
Conference Contribution
Publisher
Department of Construction Economics and Management University of Cape Town, Cape Town, South Africa
Publisher's Version
http://www.cidb-pg-conf.uct.ac.za/conference-programme
Rights Statement
© The copyright for papers in this publication belongs to authors of the papers.

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