It is somewhat of a standard fact that cost overruns in construction projects are one of the main challenges. We have been building things for a very long time, but still run into this obstacle on a regular basis. We would like to summarize some of the most important factors that lead to cost overruns.

 

 

Administrative Errors

 

Administrative errors vary in size, but even the smallest errors could cascade into absolute nightmares. The causes for administrative errors are plentiful, but one of the most prevalent errors is miscommunication. Miscommunication can cripple a project especially when they occur at the admin level. Many may suggest to increase the size of the admin team to better focus and improve project communication. However, a larger team does not necessarily mean a better work force.  

 

Administrative errors can be mitigated by providing your admins with better tools to communicate and track progress. Every investment made to facilitate communication will pay off greatly in the long run. Other solutions exist such as project management tools and automated processes.

 

Change Orders

 

Change orders are a very common cause of cost overruns. A change order occurs when the project owner realizes that the original design doesn’t work, or simply wants to change the specs to something other than what was agreed upon during the design phase. These changes can greatly affect project costs and delivery deadlines.

 

 

Project Estimates 

 

The eagerness to start a project could sometimes lead to inaccurate project estimations. These false estimates will overrun your costs from day one. Correct planning, designing and quantity surveying are essential to accurate estimations. A solid planning phase before groundbreaking ensures that you will have a better process of documentation, less confusion between administrators, and a solid project schedule, all helping to reduce future expenses.

 

Design Errors

 

Last on our list, but certainly not least are design errors. Design deficiencies are an incomplete, inaccurate, and poorly designed plans. Deficiencies can greatly overrun costs. A study from Engineers Daily estimated that design errors accounted for 38% of construction disputes. 

 

Avoiding deficiencies can be done with the assistance of specialized software. Contractors can identify errors before they occur and quickly mend the issue before they affect the budget. Also, defining the scope of work and performance duties can add an extra layer of security to avoid design deficiencies.