4.5 Article

Determining the Probability of Project Cost Overruns

Journal

JOURNAL OF CONSTRUCTION ENGINEERING AND MANAGEMENT
Volume 139, Issue 3, Pages 321-330

Publisher

ASCE-AMER SOC CIVIL ENGINEERS
DOI: 10.1061/(ASCE)CO.1943-7862.0000575

Keywords

Australia; Cost overrun; Distribution fitting; Probability; Probability distribution

Ask authors/readers for more resources

The statistical characteristics of cost overruns experienced from contract award in 276 Australian construction and engineering projects were analyzed. The skewness and kurtosis values of the cost overruns are computed to determine if the empirical distribution of the data follows a normal distribution. The Kolmogorov-Smirnov, Anderson-Darling, and chi-squared nonparametric tests are used to determine the goodness of fit of the selected probability distributions. A three-parameter Frechet probability function is found to describe the behavior of cost overruns and provide the best overall distribution fit. The Frechet distribution is then used to calculate the probability of a cost overrun being experienced. The statistical characteristics of contract size and cost overruns were also analyzed. The Cauchy (

Authors

I am an author on this paper
Click your name to claim this paper and add it to your profile.

Reviews

Primary Rating

4.5
Not enough ratings

Secondary Ratings

Novelty
-
Significance
-
Scientific rigor
-
Rate this paper

Recommended

Article Engineering, Industrial

From Quality-I to Quality-II: cultivating an error culture to support lean thinking and rework mitigation in infrastructure projects

Peter E. D. Love, Jane Matthews, Lavagnon A. Ika, Pauline Teo, Weili Fang, John Morrison

Summary: This paper suggests the need for construction organizations to establish an error management culture to reduce rework and support lean thinking. It emphasizes the importance of leadership, psychological safety, and coaching in cultivating a culture that accepts errors and focuses on mitigating their consequences. The contributions of this paper include a new theoretical foundation grounded in Quality-II and practical suggestions based on real experiences to monitor and anticipate rework in construction.

PRODUCTION PLANNING & CONTROL (2023)

Article Engineering, Industrial

Named entity recognition for Chinese construction documents based on conditional random field

Qiqi Zhang, Cong Xue, Xing Su, Peng Zhou, Xiangyu Wang, Jiansong Zhang

Summary: Named Entity Recognition (NER) plays a crucial role in construction management. This study introduces a NER method for Chinese construction documents based on Conditional Random Field (CRF). By utilizing a corpus design pipeline and a CRF model, this method successfully identifies named entities and improves construction management efficiency.

FRONTIERS OF ENGINEERING MANAGEMENT (2023)

Article Computer Science, Artificial Intelligence

Detecting anomalies and de-noising monitoring data from sensors: A smart data approach

Weili Fang, Yixiao Shao, Peter E. D. Love, Timo Hartmann, Wenli Liu

Summary: When monitoring safety levels in deep pit foundations using sensors, the extracted time series data often contain anomalies and noise, which hinders the assessment of risks. In this research, we propose a hybrid smart data approach that combines Extended Isolation Forest and Variational Mode Decomposition models to detect anomalies and de-noise the data effectively. Our approach is validated using real-life sensor data from a deep pit foundation project and achieves a root mean square error of 0.0389 and a signal-to-noise ratio of 24.09 for anomaly detection. Overall, our smart data approach enables improved decision-making and management of safety risks.

ADVANCED ENGINEERING INFORMATICS (2023)

Article Business

Collusion Detection in Infrastructure Procurement: A Modified Order Statistic Method for Uncapped Auctions

Regis Signor, Pablo Ballesteros-Perez, Peter E. D. Love

Summary: This article presents an improved method for detecting collusion, which has been validated using data from the Brazilian Federal Police. The method can be combined with other detection methods to enhance accuracy and is valuable for public and private sector procurement authorities as well as law enforcement agencies.

IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT (2023)

Article Business

The Duality and Paradoxical Tensions of Quality and Safety: Managing Error in Construction Projects

Peter E. D. Love, Lavagnon A. Ika, Jane Matthews, Weili Fang, Brad Carey

Summary: This article examines the paradoxical tensions between quality and safety in construction organizations and projects, proposing a dualistic approach to balance these competing demands. Managers are advised to adopt ambidexterity in order to optimize both quality and safety, while managing the tensions of error prevention and error management.

IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT (2023)

Article Construction & Building Technology

Hold-Ups and Failures in Negotiated Order: Unearthing the Nuances of Rework Causation in Construction

Peter E. D. Love, Jane Matthews

Summary: Despite extensive research, construction organizations still struggle to reduce rework. This paper presents a longitudinal study that examines rework causation in a transport megaproject using a sense-making lens. The study finds that rework often arises from hold-ups caused by misunderstandings, misinterpretations, role ambiguity, and breakdowns in communications and interactions between project participants. The research provides a nuanced understanding of errors and rework, offering a new theoretical framing for understanding rework causation in construction.

JOURNAL OF CONSTRUCTION ENGINEERING AND MANAGEMENT (2023)

Article Engineering, Industrial

Generating value in program alliances: the value of dialogue in large-scale infrastructure projects

Derek H. T. Walker, Peter E. D. Love, Jane Matthews

Summary: Collaboration is crucial in program alliances, and the 'pain-gain share' regime serves as an incentive for teamwork and trust. However, the value and maintenance of dialogue for superior project outcomes in program alliances is not well understood. In this paper, we use a sense-making lens to explore the value of effective dialogue in two infrastructure projects. Our findings show that effective dialogue mitigated issues like rework, as participants shared a common purpose. This paper contributes by providing new value principles for dialogue in program alliances and empirical evidence for practitioners in a alliance delivery strategy.

PRODUCTION PLANNING & CONTROL (2023)

Article Engineering, Industrial

A hybrid data-driven model for geotechnical reliability analysis

Wenli Liu, Ang Li, Weili Fang, Peter E. D. Love, Timo Hartmann, Hanbin Luo

Summary: This study proposes a hybrid data-driven model that effectively and accurately quantifies the risks of tunnel-induced ground settlement under uncertain parameters in complex geological conditions, by considering prior domain knowledge. The model incorporates a deep neural network for ground settlement prediction, physical knowledge, and a Markov-chain-based importance sampling for settlement reliability analysis. Evaluation using the San-yang Road tunnel project in Wuhan, China, demonstrates the model's ability to accurately predict tunnel-induced ground settlement and quantify failure probability for geotechnical reliability under uncertain parameters.

RELIABILITY ENGINEERING & SYSTEM SAFETY (2023)

Article Construction & Building Technology

Fast-and-frugal heuristics for decision-making in uncertain and complex settings in construction

Peter E. D. Love, Lavagnon A. Ika, Jeff K. Pinto

Summary: Fast-and-frugal heuristics play an important role in decision-making, providing better outcomes than statistical models in uncertain and complex settings or with limited samples. However, they have not been adequately studied in the construction literature. This paper aims to raise awareness about the importance of fast-and-frugal heuristics and suggests the need for research to develop an adaptive toolbox of ecologically rational heuristics for decision-making in construction. The paper contributes by challenging reliance on statistical approaches under uncertainty and proposing the use of fast-and-frugal heuristics for decision-making.

DEVELOPMENTS IN THE BUILT ENVIRONMENT (2023)

Article Business

Large-Scale Transport Infrastructure Project Performance: Generating a Narrative of Context and Meaning

Peter E. D. Love, Lavagnon A. Ika, Jane Matthews, Weili Fang

Summary: This article explores the background and significance of understanding cost deviations in large-scale transport projects. By comparing two light rail transit systems and a road project, it examines the impact of procurement approaches and worldviews on project cost performance. The research highlights the uncertainty associated with cost assessment and calls for the use of standardized definitions and terminologies.

IEEE TRANSACTIONS ON ENGINEERING MANAGEMENT (2023)

Article Engineering, Industrial

Smart heuristics for decision-making in the 'wild': Navigating cost uncertainty in the construction of large-scale transport projects

Peter E. D. Love, Lavagnon A. Ika, Jeffrey K. Pinto

Summary: This article introduces a method for estimating cost contingency in large-scale transport projects called smart heuristics. Smart heuristics are simple decision strategies that are superior to statistical reasoning when dealing with uncertainty. The article sets forth a research agenda for building and using smart heuristics and identifies methodological considerations for adapting and discovering new heuristics in the contingency estimation process.

PRODUCTION PLANNING & CONTROL (2023)

Article Construction & Building Technology

Quality II: A new paradigm for construction

Peter E. D. Love, Jane Matthews, Stuart R. Porter, Brad Carey, Weili Fang

Summary: This paper introduces a new paradigm, Quality II, for managing and learning how to handle errors in construction. By incorporating emerging best practices in construction and contemporary safety developments, the Quality II paradigm effectively reduces rework and improves project performance and profitability for construction organizations.

DEVELOPMENTS IN THE BUILT ENVIRONMENT (2023)

Article Business

Detecting bid rigging in public auctions for procuring infrastructure projects: formulating the reference scenario for decision-making

Regis Signor, Peter E. D. Love, Pablo Ballesteros-Perez

Summary: This paper analyzes the key criteria for developing a reference scenario for detecting bid rigging and presents a procedure for composing robust reference scenarios. Using data from Brazil and testing its generalizability in four countries and two auction formats, the research aims to assist public agencies in detecting and avoiding bid rigging.

CONSTRUCTION MANAGEMENT AND ECONOMICS (2023)

Article Engineering, Industrial

Causal discovery and reasoning for geotechnical risk analysis

Wenli Liu, Fenghua Liu, Weili Fang, Peter E. D. Love

Summary: This paper addresses the issue of interpretability and transparency in machine learning models used for evaluating safety risks in tunnel construction. By utilizing the concept of 'eXplainable AI' (XAI) and causal discovery and reasoning, the authors develop a method to analyze and interpret geotechnical risks in tunnel construction. The proposed approach includes a sparse nonparametric and nonlinear directed acyclic diagram (DAG), a multiple linear regression model, and a probability-based reasoning model. The feasibility and effectiveness of the approach are validated through a case study on a tunnel project in Wuhan, China, showing accurate explanation of data-driven risk assessment results.

RELIABILITY ENGINEERING & SYSTEM SAFETY (2024)

Article Engineering, Civil

Reliability-based robust geotechnical design of braced excavations considering multiple failure modes

Li Hong, Xiangyu Wang, Wengang Zhang

Summary: This study presents an advanced reliability-based robust geotechnical design method for braced excavation, which considers multiple failures and uncertainty of statistical information. It demonstrates the effectiveness of the method through the application of two and three-objective optimization models. The study also discusses the performance of optimization algorithms and the application of multiple-objective models.

UNDERGROUND SPACE (2023)

No Data Available