Title A Study on General Contractors’ Control Measures for Construction Cost Overrun
Authors Park, Jee Young ; Kim, Hyeon Jin ; Kim, Han Soo
DOI https://dx.doi.org/10.6106/KJCEM.2024.25.3.027
Page pp.27-36
ISSN 2005-6095
Keywords Cost Management; Control Measures for Construction Cost Overrun; General Contractors; Profitability; IPA Analysis
Abstract The effective control of cost overrun is a crucial issue for construction companies to secure profitability. Especially in situations where cost pressures are significant due to factors such as rising raw material prices and increased financial costs due to high-interest rate policies, cost overruns resulting from project failures have a highly detrimental impact on the profitability of construction firms. The objective of this study is to analyze the current status of cost overrun control measures adopted by construction companies using the IPA technique and provide key characteristics and implications. The IPA analysis results showed that practitioners in general contractors exhibit a high level of interest and effort regarding cost overrun while the performance level is relatively low. Nevertheless, the measures considered important to control cost overruns generally show a high tendency for execution as well. Cost overrun control measures that show high importance but low execution are primarily related to collaboration and communication sectors. To effectively control cost overruns, enhancing collaboration and communication with construction supervisors/CM, headquarters, and regulatory authorities emerged as the most urgent need. Through this study, the current status and areas for improvement regarding cost overrun control measures in general contractors can be identified. This can be valuable for deriving directions and enhancements for future cost overrun control strategy development.