Assessment of the Factors Mitigating the Effective Preparation of Cost Estimate at the Design Stage
Chapter One
Aim and Objectives of the Study
Aim
This research aims to assess the factors that mitigate the effective preparation of cost estimates at the design stage.
Objectives
To achieve the above stated aim the following specific objectives shall be pursued:
- To identify the factors that mitigates the effective preparation of cost estimate at the design stage.
- To determine the appropriate method of cost estimating at the design stage
- To access the factors that mitigates the effective preparation of cost estimate at the design stage.
CHAPTER TWO
LITERATURE REVIEW
Introduction
This chapter looks at a review of relevant literatures that give a background of the Nigerian construction industry, the challenge of high construction cost, the factors affecting construction cost and the solutions on how to minimize construction cost.
The Nigerian Construction Industry
In Nigeria, like most developing countries, the construction industry plays a dominant role in the economic activities of the country. According to Olowo – Okere (1988) the construction industry accounts for about 60 percent of the Nation’s capital investment and 30 percent of the Gross Domestic Product (G.D.P)
Furthermore, the construction industry is said to have contributed about half of the total stock of fixed capital investment in the Nigeria economy (Olaloku, 1987).The industry also generates employment opportunities which place it second to the Government in the employment of labour (Husseini, 1991).
When the construction industry was booming in the 1970’s, the country’s economy experienced similar effects during that period. However, from early to mid 1980’s, the industry experienced a jolt and its effect was felt in all spheres of national life (Isiadinso, 1988).
Buhari (1991) reported that the lull in construction of early 80’s was not limited to Nigeria alone. The lull also occurred in Western Europe and America. But the parent companies of these big timers in our midst were not only able to stay afloat the stormy ocean but were able to expand their sales. They were able to do this by initiative, creativity and research.
Consequently, the Federal and State governments resorted to taking foreign loans as a quick solution to the problem. However, some of the measures taken by Government in order to revitalize the economy have further aggravated the situation.
One obvious implication of this development is that the cost of imported raw materials and subsequently of the finished products has substantially increased (Husseini, 1991).
These substantial increases as reported by Mbachu and Nkado (2004) have obvious negative implications for the major players and the industry; undermining the viability and sustainability of the industry.
The Roles of Construction Actors in Construction cost
There are diverse interests in the construction industry. The principal interest or actors in the construction industry are:
The Client
The Consultant
The Contractor
The Client
The Client is, by far, the single most important member of the construction team. He is the initiator and financier of all the projects.Omole (1986) noted that the major contribution the client can make to the successful operations of the construction industry lies in his skill in specifying his needs prior to the preparation of the design. It is also important for the client to set cost limits of the project at the briefing .He should also ensure that adequate financial provisions are made prior to the commencement of any project.
The Consultant
Cost considerations are among the most important and basic considerations that Consultants must deal with. It is essential to see that projects are contained within the client’s budget and cost forecasts. Cost has the final control over virtually every project. Accurate cost analysis and control is one of the necessary services the client requires from the consultants (Omole, 1986).
The Contractor
Omole (1986) further reveals that the major task of Contractors is to assemble and allocate the resources of labour, equipment and materials to the project in order to achieve completion at maximum efficiency in terms of time, quality and cost.
Construction Cost Factors
A review of literature reveals that there are several factors affecting construction costs for large buildings.
In a study of the Nigerian Construction Industry, Omoregie and Radfort (2005) sampled the opinions of Contractors, Consultants and Clients and they discovered 15 factors responsible for project delays and construction cost escalation in Nigeria. Their survey revealed price fluctuation as the most severe cause of project cost escalation which is attributed to the limitation in exchange rate which in turn affects construction material prices and general price level.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitute of individuals or elements that are homogeneous in description.
This study was carried out for an assessment of the factors mitigating the effective preparation of cost estimate at the design stage. Selected contractors, clients and consultant firms in Abuja form the population of the study.
SAMPLE SIZE DETERMINATION
A study sample is simply a systematic selected part of a population that infers its result on the population. In essence, it is that part of a whole that represents the whole and its members share characteristics in like similitude (Udoyen, 2019). In this study, the researcher adopted the convenient sampling method to determine the sample size.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of Eight-four (84) questionnaires were administered to respondents of which 80 were returned. The analysis of this study is based on the number returned.
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS:
Introduction
This chapter summarizes the findings on the assessment of the factors mitigating the effective preparation of cost estimate at the design stage, Abuja as case study. The chapter consists of summary of the study, conclusions, and recommendations.
Summary of the Study
In this study, our focus was on the assessment of the factors mitigating the effective preparation of cost estimate at the design stage, Abuja as case study. The study is was specifically focused on identifying the factors that mitigates the effective preparation of cost estimate at the design stage; determining the appropriate method of cost estimating at the design stage and accessing the factors that mitigates the effective preparation of cost estimate at the design stage.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 100 responses were validated from the enrolled participants where all respondent are contractors, clients and consultant firms in Abuja.
Conclusions
With respect to the analysis and the findings of this study, the following conclusions emerged;
The study found out that a statistically significant relationship existed between the clients, consultants, and contractor on the essential factors affecting accuracy of pre-tender cost estimate. It was concluded that: Experience and skill level of the consultants ranked with overall Ru of 0.9, project teams experience on the construction type 0.87, clear and detail drawings and specification, completeness of cost information, accuracy and reliability of cost information are the most significant factors affecting accuracy of pre-tender cost estimate were other paramount factors. The most appropriate cost estimating method at the design stage according to the respondents ranking is subjective estimating with Ru of 0.78 and parametric estimating 0.46 and synthetic estimating 0.52. It was recommended that Clients should always engage the services of skilled quantity surveyors to undertake the consultancy services in cost estimating process.
Recommendation
Based on the findings the researcher recommends that;
- Much focus should be placed on the major factors affecting construction cost in order to reduce the cost of construction cost, enhance construction performance and generate confidence within the construction industry.
- Quantity Surveyors should become more alive to their responsibilities as cost experts ensuring that they make use of correct estimation methods.
- There should be thorough crosschecking of estimates based on updated price information in order to avoid any wrong estimation.
- Clients should clearly identify their requirements and needs, whether they are able to achieve them with their financial capability in order to reduce payment problems.
- There should be proper coordination and communication among various parties working on the project in order to improve management, control problems and reduce any avoidable delay.
- Contractors should come up with a clear plan and strategy before starting a project. Early project planning and scheduling of labour, equipment and cash, combined with a good bidding strategy, will help to obtain efficient work at a proper price.
REFERENCES
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- Buhari I.B. (1991) Inflation and the Nigerian economy. The Nigerian Quantity Surveyor. 8-9
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