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FACTORS AFFECTING COST AND TIME CONTROL IN CONSTRUCTION PROJECTS

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 FACTORS AFFECTING COST AND TIME
CONTROL IN CONSTRUCTION PROJECTS
OLAJIDE FAREMI1, OLABODE OGUNSANMI1, INIOBONG JOHN1
1
Department of Building, Faculty of Environmental Sciences, University of Lagos, Akoka,
Lagos, Nigeria

Abstract

The quest of construction project stakeholders is effective control of cost and time.
Accomplishing this quest however remains a difficult task. This study examines factors
affecting cost and time control of construction projects with a view to proposing
recommendations that could assist stakeholders to achieve enhanced cost and time performance
of construction projects. A survey of professionals managing construction projects in Lagos,
Nigeria was conducted. Structured questionnaire was developed and administered to eighty (80)
managers of construction projects who were randomly selected from a sample frame of One-
hundred (100) construction project contractors. A total of fifty-two (52) questionnaires were
retrieved representing 62% response rate. Using Statistical Package for Social Sciences, version
20.0, descriptive and inferential statistical tools including, bar chart, mean, minimum and
maximum values, frequency tables, T-test and Analysis of Variance (ANOVA) were employed
to analyse collected data. The results of the analysis revealed that the top three significant
factors affecting cost and time control of construction projects are; design and documentation
issues, poor labour productivity and financial resource management. This study recommends the
avoidance of poor work quality in construction activities. Also, project and construction
managers should focus on project tripod constraints of cost, quality and time while workers
hired and deployed on construction projects should be adequately skilled in order to achieve
desired cost and time performance.

Keywords: Factors, Cost, Time, Control, Construction project, Lagos-Nigeria.

1 INTRODUCTION

Cost and time control refers to the process of controlling costs and time associated with
an activity. It involves the process of managing and controlling factors that change or
affect the budget and time of a given activity or sets of activities (Owens & Krynovich,
2007). Construction projects represent a unique set of activities that must take place to
produce a unique product. Construction projects comprise of new buildings and
structures, additions, alterations, conversions, expansions, reconstruction, renovations,
major replacements, mechanical and electrical installations among others. The need to
control cost and time in construction industry is essentially to ensure that projects are
completed within budget and on time or as scheduled (Rahman, Memon, Nagapan,
Latif, & Azis, 2012).

Globally, the success of a construction project is determined by the ability of the

project to meet the criteria of cost, time, safety, resource allocation, and quality as
determined by the client. Kagioglou, Cooper, and Aouad (2001) affirm that a
successful project is the one which has accomplished its technical performance,
maintained its schedule, and remained within budgetary costs. Rahman et al. (2012)

1
buttress the position that time and cost performance is the fundamental criteria for
success in any construction project.

Despite the establishment of these performance metrics, ever reoccurring is the

challenge of completing construction projects within the scheduled time and budgeted
cost. Olawale and Sun (2010) argued that the generality of construction industry has
been regarded as industry facing poor performance leading to failure in achieving
effective time and cost performance. Consequently, most construction projects face
huge amount of time and cost overrun. Ameh, Soyingbe, and Odusami (2010) concur
that the history of the construction industry worldwide is full of projects that were
completed with significant time and cost overruns. The authors recount that of 8,000
construction projects surveyed in 1994, only 16% could satisfy the three famous
performance criteria of been completed within scheduled time, within the budgeted cost
and maintaining a high standard of quality.

The inability of construction project managers to keep cost and time of construction
projects within scheduled limits often results in severe consequences. Azis, Memon,
Rahman, & Karim, (2013) opine that construction project cost which is out of control
adds to investment pressure, increases construction cost, and affects investment
decision-making. Shanmugapriya and Subramanian (2013) add that from the national
economic perspective, time and cost overruns reduce the productivity of available
economic resources, edge the development potential and diminish the effectiveness of
the economy.

Studies existing in literature (Olawale & Sun, 2010; Ameh & Osegbo, 2011; Memon,
Rahman, Asmi, & Azis, 2011; Ibrahim, 2012; Azis et al., 2013; Hashim, 2013;
Shanmugapriya & Subramanian, 2013; Muhwezi, Acai, & Otim, 2014; Ballhysa &
Blloku, 2014; Idiake, Shittu, & Oke, 2015) are limited to the identification of the
influencing factors, but did not progress onto finding ways of mitigating the identified
challenges. These observations underlie the rationale for this study as it aims to identify
the factors affecting cost and time control of construction projects with a view to assist
construction project managers achieve improved control of cost and time on
construction projects.

In order to achieve the aim of this study, the following objectives are defined:
1. To assess the factors affecting cost and time control of construction
projects in Lagos State, Nigeria.
2. To examine measures for achieving improved cost and time control of
construction projects in Lagos State.

The study also seeks to test the null hypothesis that:

HO: There is no significant difference in the perception of construction professionals on
factors influencing cost and time control of construction projects in Lagos State.

2 LITERATURE REVIEW

Cost and time control is defined as a process by which construction cost and time of a
project is managed through best methods and techniques (Otim, Nakacwa, & Kyakula,
2012) so that project stakeholder(s) do not suffer losses as the activities of the project
are carried out. Koh (2005) concurs that project cost and time control refers to the
process by which the cost of a project is kept within the agreed cost limits and the
duration kept within agreed schedule limits respectively.

Furthermore, Raut, Pimplikar and Sawant (2013) opine that construction cost and time
control consists of simply monitoring actual cost and time performance of a project
against the cost and time estimates earlier designed or stipulated for the project and
identifying variances. The authors explain that the aim of cost and time control process
is to monitor actual cost and time performance of projects and identify improvement
opportunities, which must be dealt with by corrective actions.

Idiake et al. (2015) buttress that time, cost and quality are three major variables that are
of primary concern to the main parties involved in procurement of building projects.
The management of these variables is usually a complex task for project managers in
practice. Ameh and Osegbo (2011) opined that the challenge of controlling project
schedule is of global concern. Ineffective controls of time in line with project schedule
usually results in the extension of time beyond planned completion dates. Similarly,
ineffective control of construction project cost would usually result in a difference
between actual cost of a project and its cost limit (Ballhysa & Blloku, 2014). When this
difference occur it is referred to as cost overrun. Cost overrun on projects thus occurs
when the resultant cost target of a project exceed its cost limits. Cost limit of a project
refers to the maximum expenditure that the client is prepared to incur on a completed
building project while cost target refers to the recommended expenditure for each
element of a project.

When construction cost is out of control, it adds to investment pressure, increases

construction cost, affects investment decision making and wastes the national finance
might result in corruption or offence (Rahman et al., 2012). Most construction project
are being completed at costs much higher than initial estimate which indicate that
initial cost estimates on construction projects can hardly be relies upon by clients
(Olawale & Sun, 2010). The problem of poor cost and time management and its
respective overruns in project cost and time are serious issues in both developed and
developing countries. This needs serious attention for improving the construction cost
and time performance as rarely projects are completed within budget and schedule.
This study would survey opinions of its sample on the challenges of cost and time
control of construction projects within the study area by adopting articulated challenges
discussed in this section of the study.

Rahman et al. (2012) opine that time and cost performance of construction projects are
affected by factors such as design and documentation issues, financial resource
management, project management and contract administration, contractors’ site
management, information and communication technology, material and machinery
resource, labour (human) resource and external factors.

Memon et al. (2010) presented twenty-four factors influencing the effective control of
cost on construction projects. The authors opined that the factors include the practice of
assigning contract to lowest bidder, contractor's poor site management and supervision,
cash flow and financial difficulties faced by contractors, incorrect planning and
scheduling by contractors, inadequate contractor experience, shortage of site workers,
and delay in Material procurement. other factors identified include incompetent project

3
team (designers and contractors), fluctuation in prices of materials, underestimate
project duration resulting schedule delay, shortages of materials, mistakes during
construction, lack of communication among parties, labor productivity, low speed of
decisions making, change in the scope of the project, poor technical performance,
frequent design changes, and slow payment of completed works. ,Also identified are
unforeseen ground conditions, equipment availability and failure, necessary variations
of works, owner interference and social and cultural impacts. All identified factors in
literature cited in this study were adopted for use in the course of collecting data for
this study.

3 RESEARCH METHODS

This study is geographically delimited to Lagos State, the economic nerve center of
Nigeria. A total sample frame of 100 construction companies having operations in Lagos
state was developed for this study. The sample frame comprises of eighty eight (88)
construction companies that are registered with Lagos state tender board and twelve
construction companies scooped from the list of construction companies on Vconnet data
base. Adopting the Taro Yamane (1967) equation for determining sample size as
explained by Israel (2013) that:

………………… equation 1

Where:
n is the sample size
N is the population size
e is the level of precision
A sample size of eighty (80) was obtained. Consequently, eighty (80) data collection
instrument was designed and administered. Out of the administered questionnaires, a
total of fifty-two questionnaires were retrieved representing 65% response rate.

4 RESULTS AND DISCUSSION OF FINDINGS

4.1 Demographic Data of Respondents

The statistics of the characteristics of the respondents for this study was analysed and
the results presented in figure 1 below:
Figure 1: Respondents’ demographic data

Figure 1 above shows the characteristics of respondents for this study across four areas
of respondents’ designation, academic qualification, academic background and the
years of experience on construction projects of those that responded to the survey. The
analysis revealed that the designations of majority of the respondents were project
managers and construction managers account for about 70% and 29% of the responses
respectively. This implies that the respondents are core professionals equipped to
handle building construction projects, thus their responses would be of immense value
to this study. Also about 47% of the respondents have Higher National Diploma (HND)
certificates or Bachelor of Science Certificate (B.Sc) while about 51% possessed post
graduate qualifications. It implies the generality of the respondents have acquired
significant level of formal education and would therefore be able to provide appropriate
responses to the various formulated research questions.

4.2 Factors Affecting Cost and Time Control of Construction Projects

Based on extensive review of literature as discussed in previous chapter of this study,

prevailing factors affecting cost and time control of construction projects were
presented to surveyed respondents and they were asked to assess the level of
significance of each of the articulated factors on a 5 point Likert scale ranging from not
significance to highly significance. A total of forty-nine (49) factors were assessed, the
resulting analyses are shown in table 1 below:

Table 1: Factors affecting cost and time control of construction projects

Factors N Mean Rank
Design and Documentation issues 47 4.57 1
Poor labor productivity 49 4.53 2
Financial Resources Management 51 4.51 3
Change in the scope of the project 48 4.48 4

5
Factors N Mean Rank
The practice of assigning contract to lowest bidder 49 4.45 5
Poor technical performance 50 4.44 6
Shortage of site workers 51 4.43 7
Unforeseen ground conditions 48 4.42 8
Incompetent project team (designers and contractors) 51 4.41 9
Human Resources 49 4.41 10
Project Management and Contract Administration 50 4.40 11
Inadequate contractor experience 48 4.40 12
Delay in Material procurement 51 4.39 13
Frequent design changes 49 4.39 14
Owner interference and social and cultural impacts 49 4.39 15
Lack of communication among parties 48 4.38 16
Material and Machinery Resource 51 4.37 17
Necessary variations of works 49 4.37 18
Incorrect planning and scheduling by contractors 49 4.37 19
Shortages of materials 50 4.36 20
Low speed of decisions making 48 4.35 21
Inadequate fund for the project 50 4.34 22
Contractors Site Management Techniques 50 4.34 23
Obtaining building permits and approvals 49 4.33 24
Slow payment of completed works 50 4.32 25
Mistakes during construction 50 4.30 26
Contractor's poor site management and supervision 49 4.29 27
Fluctuation in prices of materials 51 4.27 28
Cash flow and financial difficulties faced by 51 4.27 29
contractors
Equipment availability and failure 49 4.27 30
Design changes during project execution 50 4.26 31
Subcontractor incompetency 51 4.25 32
Information and Communication Technology 50 4.24 33
Delay in delivery of materials 51 4.24 34
Underestimate project duration resulting schedule 48 4.23 35
delay
Incompleteness of technical documentation 51 4.16 36
Inadequate planning of project before 51 4.16 37
commencement
Variations 50 4.14 38
External Factors 47 4.13 39
Unexpected subsoil/ground condition 48 4.10 40
Inadequate tools and equipment 51 4.08 41
Accidents 48 4.02 42
Political instability or change in government policies 48 4.02 43
Delay in response to decision taking 50 4.02 44
Labour dispute in form of strike or lock-out 48 3.98 45
 Factors N Mean Rank
Delay in inspection and testing of completed work 50 3.96 46
Temporary work stoppages due to adverse weather 46 3.96 47
Unclear or inadequate instructions to operators 48 3.90 48
Community issues 49 3.86 49

The results in table 1 reveal that design and documentation issues ranked first among
factors affecting cost and time control of control projects. This is followed by the
productivity level of labour resources on construction projects, financial resource
management, change in the scope of projects and the practice of assigning contracts to
lowest bidders respectively. This result implies that significant time is spent on
resolving request for changes in design by key project stakeholders. Also cost and time
spent on obtaining required development permits for building construction projects
from relevant government agencies within the study area are relatively difficult to
estimate because in most cases such approval periods are prolonged due to the
bureaucratic nature of obtaining such permits and approvals, this consequently alters
project managers and construction managers cost and time schedule.

This result concurs with the findings of Memon, Rahman, and Azis (2012) that design
and documentation issues are very dominant in construction, they opined that design
and documentation issues have significant impact on cost and time performance of
construction projects as frequent design changes are common practice on construction
projects. Factors ranked to be least significance include; strike actions as a result of
labour dispute, delay in inspection and testing of completed work, temporary work
stoppages due to adverse weather, unclear or inadequate instructions to operators and
community issues. Unlike this study that ranked labour productivity as the second most
significant factor affecting cost and time control of construction projects, Memon et al.
(2012) ranked financial resource management as the second most significant factor
affecting cost and time control of construction projects. They explained that delay in
payment to the contractor for completed works by the client results in cash flow
challenges which usually slow down the pace of contractors. The differences in the
findings of this study and that of Memon et al. (2012) on factors that influences the
control of cost and time of construction projects may be as a result of differences in
geographical location, culture and prevailing construction practices in the respective
locations where the studies were conducted.

4.3 Measures for Achieving Improved Cost and Time Control of Construction
Projects

This study seek to assess measures for achieving improved cost and time control of
construction projects hence respondents were presented with hypothesized measures
that could improve control of cost and time of construction projects as elicited from
literature. The respondents were asked to rate their level of agreement or otherwise
with each of the potential measures using a 5 point Likert scale ranging from strongly
disagree to strongly agree. Table 2 below shows the resulting analysis:

Table 2: Measures for improved cost and time control of construction projects

7
Measures for improved cost and time control N Mean Std. Deviation

Avoid poor quality of work 48 4.65 .526

Focus on the quality cost and delivery of the project 50 4.62 .490

Hire skilled workers to achieve good progress 49 4.59 .497

Committed leadership and management 48 4.56 .542

Proper work planning 48 4.56 .542

Training and development of all participant to 50 4.54 .646

support delivery process

More rectification and double handling, close 50 4.54 .613

monitoring

Adoption of tools and techniques i.e.: value 50 4.52 .580

management, lean thinking, total quality
management, etc

Effective site management and supervision 50 4.50 .580

Use new construction technologies (IBS-Industrialize 50 4.48 .677

Building System)

Effective strategic planning 50 4.46 .542

Send a clear and complete message to worker to 50 4.46 .579

ensure effective communication

Proper project planning and scheduling 50 4.44 .644

Fully utilize the construction team 49 4.43 .707

Use of appropriate construction methods 48 4.40 .765

Measure performance against other projects 48 4.35 .699

Provide knowledge/training to unskilled workers 50 4.30 .839

based on their scope of work

Clear information and communication channels 47 4.30 .720

Frequent progress meeting 49 4.29 .764

Focus on client’s need 50 4.28 .640

Use of experienced subcontractors and suppliers 52 4.27 .660

Frequent coordination between the parties 47 4.23 .729

 Measures for improved cost and time control N Mean Std. Deviation

Perform a preconstruction planning of project tasks 48 4.23 .692

and resources needs

Systematic control mechanism 47 4.19 .680

Comprehensive contract administration 47 4.17 .732

Use up to date technology utilization 47 4.15 .908

Improving contract award procedure by giving less 46 4.09 .812

weight to prices and more weight to the capabilities
and past performance of contractors

Proper emphasis on past experience 50 4.08 .752

Developing human resources in the construction 46 4.04 .815

industry

The analysis in table 2 shows that respondents strongly agree that avoidance of poor
quality of work with a mean of 4.65 is the most significant measure for achieving
improved cost and time control of construction work. The second most significant
measure agreed by the respondents is that construction project managers should focus
on project quality, project cost and project delivery as inseparable entity. The results
infers that quality work orientation and avoidance of poor quality of work would
reduce defective work and rework in the course of construction activities which would
in turn impact cost and time performance of construction projects positively. This
support the position of Abdullah et al. (2010) and Memon et al. (2011) that the success
of a project is defined by the extent to which the project conforms to defined quality
standards i.e., specification and performance. Also, low quality materials increases
material waste on site which eventually results in higher construction cost than
expected.

4.4 Research Hypothesis

Ho: There is no significant difference in the perception of construction professionals

on factors affecting cost and time control of construction projects within the
study area.
H1: There is significant difference in the perception of construction professionals on
factors affecting cost and time control of construction projects within the study
area.

To test the hypothesis, Analysis of Variance (ANOVA) method was used. From the
computation for the hypothesis, the overall average significance value for the Analysis
of Variance test was found to be 0.437 at a significant level of 0.05. Although a case by
case significance test shows that there are significant differences in the perception of
the respondents on four (4) of the factors therefore the individual null hypotheses for
them were rejected. The affected factors include mistakes during construction
(p=0.033, p<0.05), lack of communication among parties (p=0.030, p<0.05), low speed

9
of decision making (p=0.016, p<0.05) and frequent design changes (p=0.024, p<0.05).
The average statistics value (p=0.437, p>0.05) however supports the null hypothesis
that there is no significant difference in the perception of construction professionals on
factors affecting cost and time control of construction projects.

5.0 CONCLUSION

This research concludes that five of the forty-nine hypothesized factors examined in the
course of this study are the predominant factors affecting cost and time control of
construction projects in Lagos state, Nigeria. These are design and documentation
issues, labour productivity, financial resources management, changes in the scope of
the project and the practice of awarding contracts to the lowest bidder. This findings
supports the position of Rahman et al. (2012) that design and documentation as well as
financial resource management are the two most important factors for improving cost
performance of construction projects. Azis et al. (2013) further emphasize that design
is the road map and systematic guide in leading to the objective of any project while
documentation plays an important role in tracking and monitoring the progress of the
project.

In addition, other top factors that project stakeholders should give attention in the quest
for effective cost and time control in construction projects include labour productivity
issues (i.e. poor productivity of workers on construction projects). Shanmugapriya and
Subramanian (2013) affirm that poor labour productivity is one of the seven (7) most
significant factors affecting cost performance of construction projects in Indonesia.
Others factors affecting cost and time control of construction projects in Lagos state are
incessant changes in the scope of construction projects and the practice of assigning the
contracts of construction projects to lowest bidders. These set of factors complement
design and documentation issues and financial resources management as most
significant factors affecting cost and time control of construction projects.

This study recommends that construction project stakeholders especially project and
construction managers should ensure that poor workmanship are avoided when
carrying out construction activities. This would minimize the need for rework and
consequently enhance the optimization of both financial and time resources. Also,
project and construction managers should constantly and consistently focus on
construction project tripod of cost, quality and time. Such focus should encompass the
development of skills and competence that would enhance their ability to effectively
discharge duties in this regard. Construction project stakeholders should make effort at
hiring only workers that are adequately skilled as the project or work/activity demands.
This would result in accelerated progress of work and consequently good construction
project time performance.

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