Improving Cost Estimates of Construction Projects Using Phased Cost Factors

Abstract

Central to cost-based competition is the capability to accurately predict the cost of delivering a project. Most literature on cost estimation focuses on specific estimation methods as generic techniques and little attention has been paid to the unique requirements at each project stage. This note attempts to identify the critical factors for effective estimation at various stages of typical construction projects. Drawing from organization control theory and cost estimating literature, this note develops a theoretical framework that identifies the critical factors for effective cost estimation during each project phase of a conventional construction project. The underlying logic is that as a cost estimating effort progresses, both task programmability and output measurability improve. As a result, control effort will shift from input-oriented control to a combination of output and behavior control.