Evaluation of Cost Growth Factors in Design-Build Highway Projects Using Structural Equation Modeling

Abstract

Design-build (DB) project delivery is often used to overcome limitations of the traditional design-bid-build delivery method. Identification of project performance influencing factors is important for selecting a project delivery method. The measurement of project performance is typically attributed to the cost, schedule, and quality dimensions, where the cost growth typically plays a substantial role. The cost growth in a project is influenced by multiple project characteristics, including project size, project complexity, project type, delivery risks, and other variables. This study identifies multiple directly or indirectly related determinants and their effects on the cost growth of a DB project. A total of 118 DB highway projects across the US were examined. An empirical investigation was conducted using structural equation modeling (SEM) to examine the effect of project complexity, delivery risk, project types, and facility types on project cost growth. An exploratory factor analysis was initially conducted to identify the critical risk factors related to DB construction projects. Results of the SEM analysis indicated that project complexity had a statistically significant direct effect on the cost growth of a DB project. Other factors, including delivery risks, facility type, and project type, demonstrated an indirect effect on the project cost growth. The findings contribute to the project delivery body of knowledge by identifying both direct and indirect factors affecting cost growth of DB highway projects. The results of this study may help practitioners create more accurate estimates and better manage risk for DB projects by identifying the critical risk factors and including the required contingency funds for the project.