Identifying the Impact of Preconstruction Elements on Project Budget

Abstract

Minimizing budget variances is one of the prime objectives during the preconstruction phase. Failing to control budget variances leads to poor project outcomes such as low project quality, deficiencies in design, inaccurate financing, a longer decision-making process, and instabilities in the project timeline. To minimize budget variances and ensure a productive decision-making process, project owners should be familiar with critical elements in a project that cause variances in the budget during the preconstruction phase. In this study, the impact of 10 critical preconstruction elements on budget variances is discussed. These 10 elements are identified to be critical with the criteria of either significantly impacting budget variances during the preconstruction phase or believed to be critical from the previous studies. However, the results showed no significant impact on the budget variances. In most previous studies focusing on the critical elements impacting project budgets, data were collected by surveying construction professionals. In this study, objective data related to project preconstruction budgets and analysis rooted in objective, quantitative data as opposed to self-reported data were used. Using the results of this study, project owners will be able to prioritize the most significant elements and give lower priority to noncritical elements in order to focus on more important decisions as they make decisions related to the project.