Cost, Change Order, and Schedule Performance of Highway Projects

Abstract

Costs, change orders, and schedule performances of highway projects built using the design-bid-build (DBB) method by state departments of transportation have been tracked for more than five decades. As technology improves, it is assumed that highway project performance should improve. Therefore, the research hypotheses for this study were developed assuming that construction cost growth, change order growth, and schedule growth will decrease over time. The research hypotheses have also been tested based on project size because research has found that project performance often varies based on project size. This study has collected project costs, change orders, and schedule data from 3,957 highway construction projects built by Texas DOTs from 1987 to 2015. When converted into January 2020 equivalent costs, total project costs were $21.15 billion. These data were analyzed to determine whether there has been cost, change order, or schedule performance improvement over time. The results from statistical tests show that the cost growth of projects completed since 2001 decreased significantly until 2015. When the analysis was done by project size, it was found that the amount of cost growth decrease tends to be higher in large projects (more than $10 million) compared to small projects (less than $10 million). The study shows a decreasing trend of change order growth only for small projects. However, the study did not find any significant schedule growth decrease or increase trends in any types of projects. The major contributions of this study are the findings related to reduction in cost growth over time, irrespective of the size of the projects, and reduction in change order growth over time in large projects. This will be helpful for state DOTs project performance management personnel to learn cost and change order growth reduction strategies and use them to reduce schedule growth on highway projects.