Preprint Article Version 1 Preserved in Portico This version is not peer-reviewed

Cost Modelling from the Contractor Perspective: Application to Residential and Office Buildings

Version 1 : Received: 12 October 2021 / Approved: 13 October 2021 / Online: 13 October 2021 (12:48:56 CEST)

How to cite: Monteiro, F.P.; Sousa, V.; Meireles, I.; Oliveira Cruz, C. Cost Modelling from the Contractor Perspective: Application to Residential and Office Buildings. Preprints 2021, 2021100201 (doi: 10.20944/preprints202110.0201.v1). Monteiro, F.P.; Sousa, V.; Meireles, I.; Oliveira Cruz, C. Cost Modelling from the Contractor Perspective: Application to Residential and Office Buildings. Preprints 2021, 2021100201 (doi: 10.20944/preprints202110.0201.v1).

Abstract

For the majority of the contractual arrangements used in construction projects, the owner is not responsible for the cost deviations due to the variability of labor productivity or material price, amongst many other aspects. Consequently, the cost performance of a project may be entirely distinct for the owner and the contractor. Since the majority of the quantitative research on cost estimation and deviation found in the literature adopts the owners’ perspective, this research provides a contribution towards modelling costs and cost deviation from a contractors’ perspective. From an initial sample of 13 residential building and 10 office building projects, it was possible to develop models for cost estimation at the early stage of development including both endogenous and exogenous variables. Although the sample is relatively small, the authors were able to fully analyze all the cost data, using no secondary sources of data (very frequent in cost modelling studies). The statistically significant variables in the cost estimation models were the areas above and below ground and the years following the 2008 financial crisis, including the international bailout (2011-2014) period. For estimating the unit cost, a nonlinear model was obtained with the number of underground and total floor, the floor ratio and the years following the 2008 financial crisis, including the international bailout (2011-2014) period as predictors. For the office buildings, it was also found a statistically significant correlation between the cost deviation and the number of underground floors.

Keywords

cost estimation; cost deviation; financial crisis; promotor-contractor; statistical modelling

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