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Chan, A P C, Lai, M K, Tam, C M and Akintoye, A (2001) Analysis of construction cost variation factors. Journal of Financial Management of Property and Construction, 6(01), 51–60.
- Type: Journal Article
- Keywords: contract cost variations; regression analysis; influential factors
- ISBN/ISSN: 1366-4387
- URL: http://www.emeraldinsight.com/journals.htm?issn=1366-4387
Cost variation of construction constitutes a major problem in construction project procurement. It is not uncommon particularly in complex projects for cost of construction to exceed its budget by a wide margin. This paper presents a regression analysis for mitigating contract variations in building projects, the objective being to identify the most influential factors for mitigating contract cost variations. Through a stepwise multiple regression analysis involving respondents from the Hong Kong construction industry, it is found that reduction of cost variations can be achieved through a clearer and more thorough detailing of design, better communication and co-operation between team members, simple and traditional procurement arrangement, and the appointment of an independent cost manager for cost control.