Cost Contingency Strategies in Building Construction: Evaluating Project Risk Influence
DOI:
https://doi.org/10.70609/gtech.v8i4.5115Keywords:
Cost Contingency, Regression, RiskAbstract
Contingency costs are an important part of construction to achieve successful project management. In determining contingency costs, practitioners have used a very subjective approach. This study discussed the determination of the contingency cost of high-rise buildings in six research object projects, based on the results of risk evaluation. The risk evaluation used in this paper is based on the risks in the construction phase. The method used to know the relationship between risk and contingency costs is simple linear regression with tools. The results of this study indicate that the greater the level of risk, the greater the contingency costs incurred by the project. the risk level contributed 71.6% to the contingency cost, while the rest was influenced by other factors. The equation formed is, that if the risk increases by 1 unit, the total contingency cost will increase by 0.0916 units.
References
Abd El-Karim, M. S. B. A., Mosa El Nawawy, O. A., & Abdel-Alim, A. M. (2017). Identification and assessment of risk factors affecting construction projects. HBRC Journal, 13(2), 202–216. https://doi.org/10.1016/j.hbrcj.2015.05.001
Adi, T. J., & Yunwanti, S. (2014). Risk Based Contingency Cost Estimation Modeling For Engineering-Procurement-Construction Project. Prosiding Seminar Nasional Manajemen Teknologi XXI.
Affes, H., & Ayadi, F. (2014). Contextual factors impact on the use of new management accounting practices: An empirical analysis in the Tunisian context. Journal of Research in International Business and Management, 4(3), 45–55.
Ammar, T., Abdel-Monem, M., & El-Dash, K. (2023). Appropriate budget contingency determination for construction projects: State-of-the-art. Alexandria Engineering Journal, 78(November 2022), 88–103. https://doi.org/10.1016/j.aej.2023.07.035
Capone, C., & Narbaev, T. (2022). Estimation of Risk Contingency Budget in Projects using Machine Learning. IFAC-PapersOnLine, 55(10), 3238–3243. https://doi.org/10.1016/j.ifacol.2022.10.140
Diab, M. F., Varma, A., & Panthi, K. (2017). Modeling the Construction Risk Ratings to Estimate the Contingency in Highway Projects. Journal of Construction Engineering and Management, 143(8). https://doi.org/10.1061/(asce)co.1943-7862.0001334
El-Touny, A. S., Ibrahim, A. H., & Amer, M. I. (2014). Estimating cost contingency for highway construction projects using analytic hierarchy process. International Journal of Computer Science Issues (IJCSI), 11(6), 73.
Eldosouky, I. A., Ibrahim, A. H., & Mohammed, H. E. D. (2014). Management of construction cost contingency covering upside and downside risks. Alexandria Engineering Journal, 53(4), 863–881. https://doi.org/10.1016/j.aej.2014.09.008
Fateminia, S. H., & Fayek, A. R. (2023). Hybrid fuzzy arithmetic-based model for determining contingency reserve. Automation in Construction, 151, 104858. https://doi.org/10.1016/j.autcon.2023.104858
Islam, M. S., Nepal, M. P., Skitmore, M., & Drogemuller, R. (2021). Risk induced contingency cost modeling for power plant projects. Automation in Construction, 123(February 2020). https://doi.org/10.1016/j.autcon.2020.103519
Lhee, S. C., Flood, I., & Issa, R. R. A. (2014). Development of a two-step neural network-based model to predict construction cost contingency. Journal of Information Technology in Construction, 19(September), 399–411.
Mawariza, P. S. W. I. (2021). Construction Risk Evaluation With Fuzzy Weighted Analysis. INTERNATIONAL CONFERENCE ON MANAGEMENT OF TECHNOLOGY, INNOVATION, AND PROJECT, 528.
Peginusa, S. S., Willar, D., & Manoppo, F. J. (2020). Risk-based contingency cost estimation model for river normalization projects in urban areas. Jurnal Ilmiah Media Eng, 10(1), 35–46.
Project Management Institute. (2021). Chapter 3.10 Optimize Risk Responses. In The Standard for Project Management and A Guide to The Project Management Body of Knowledge (PMBOK guide 7th edition). (Issue July).
Salah, A., & Moselhi, O. (2015). Contingency modelling for construction projects using fuzzy-set theory. Engineering, Construction and Architectural Management, 22(2), 214–241.
Shrestha, K. K., & Shrestha, P. P. (2016). A Contingency Cost Estimation System for Road Maintenance Contracts. Procedia Engineering, 145, 128–135. https://doi.org/10.1016/j.proeng.2016.04.030
Downloads
Published
Issue
Section
License
Copyright (c) 2024 Putri Suci Mawariza, Michella Beatrix
This work is licensed under a Creative Commons Attribution 4.0 International License.
