Quantity Surveying and Construction Procurement: Time and cost overruns: are we using the right techniques to estimate time and cost?

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Assalamualaikum and dear all,

This blog compliments teaching and learning for courses that I facilitate at the International Islamic University Malaysia (IIUM). The contents serve to further 'connect' students to the 'real world' (quantity surveying, construction procurement and others). In trying to provide current information to students, I will be quoting or reproducing works of others and for this I am grateful. I will indicate clearly the source(s). I hope I will not offend anyone; and many will frequent this blog and benefit from its contents.

Thank you and wassalam.

Prof. Sr. Dr. Khairuddin Abdul Rashid

Sunday, November 22, 2009

Time and cost overruns: are we using the right techniques to estimate time and cost?

Salam and dear all, The 2008 Auditor General's report pointed out several areas related to public sector construction procurement that are not quite right. Included in the list are time and cost overruns of projects. In fact, time and cost overruns of public sector projects have been highlighted by the Auditor General in many past reports. Those interested may read the report at http://www.audit.gov.my. In this posting I would like to call for a discussion, to seek views from research students and practitioners studying time and cost overruns on the methodology or methodologies used to estimate time and cost of projects. The key question I have is this: in the context of the public sector construction procurement in Malaysia is the methodology (or are the methodologies) used to estimate time and cost of projects current, appropriate and scientific? Perhaps final year and graduate students may consider the above mentioned question as a potential to be developed into a research topic for the final year project paper or dissertation. Wassalam.

1 comment:

ProjMan said...: I have great interest in your topic question as I have been a practitioner of time & cost for over 20 years and run a project controls consultancy in Kuching Sarawak (PCSS Consultancy Sdn Bhd). In my experience with government projects no standardised methodology is used for time or cost monitoring. Usually schedule variance is measured based on duration percent complete of activities of work (if 5 days of a 10 day activity has elapsed then it is 50%) or actual percent complete (if an activity of work has expended RM500 out of RM1000 budget it is 50%). Neither of these take into consideration the value of the work acheived as defined in Earned Value Management (EVM). Where the physical percent complete of an activity of work is estimated then it is usually a subjective guess rather than being based on appropriate construction metrics.

Another aspect of progress monitoring that is poorly executed is the forecast to completion which highlights when the project will complete and whether it will be over or under budget. The main focus of many project managers and auditors is on the percent complete without regard to forecasting which can be easily obtained through EVM.

This is, in my opinion, one of the main reasons why many projects fall into the 'sick' category as there is no objective visibility as to the projects health.; November 30, 2009 at 12:19 PM