The Impact of Quantities Accuracy on the Final Costs of ...

186

Journal of Engineering Sciences

Assiut University

Faculty of Engineering

Vol. 48

No. 2

March 2020

PP. 186–198

THE IMPACT OF QUANTITIES ACCURACY ON THE FINAL

COSTS OF GOVERNMENTAL PROJECTS IN SAUDI ARABIA

Sultan Mushabbab R. AlAssiry *, Nik Mustapha

King Faisal Specialist Hospital and Research Center

Nottingham Trent University

Received 1 April 2019; Accepted 4 September 2019

ABSTRACT

Saudi Arabia is currently experiencing several cases of many stalled and unfinished government

projects. Some of the projects have stalled for quite some years now with no likely definite dates for

their completion. Although these projects have already consumed large sum of taxpayers’ money,

they are of no value in their unfinished state. Several reasons are being put forward to explain why

the projects have been deserted by the contractors before completion, and inaccuracies in the initial

estimation of cost and quantities for those projects has been listed as the main cause. This paper is,

therefore, a study that was carried out to show how the accuracy of quantities affects the final costs

of government projects in Saudi Arabia. Although similar studies have been carried before, none

has been done for Saudi Arabia. The main objective of the study was to show how the impact of

how the accuracy of quantities affects the final costs of government projects in Saudi Arabia.

The method used in the study was a case study recently completed projects in Saudi Arabia and

structured questionnaires that was used to gather information from experts in the field of

construction. Statistical analysis techniques were used to analyze the project data and they

comprised of the mean of the projects sums, standard deviation, regression analysis, and two-tail t-

test. A total of 350 respondents were each given a questionnaire. However, only 230 of the

respondents completed and submitted their questionnaires. The mean for the initial and final costs

for the sum total of each project were found to be 7734982.428 and 10128233.8 respectively, and a

standard deviation was 1196625.686. For the regression analysis the R square, F significance, and

the regression coefficients were found to be 66%, 0.096 and 0.63 respectively, indicating a lack of

statistical significance in the relationship of initial and final account quantities. The t-test hypothesis

also had the value of t Stat (-0.5102) to be less than t critical two-tail (2.306), leading to the

validation of the null hypothesis that “The accuracy of the quantities affects the estimation of

project costs and cost plans of the entire projects.”

The study concluded that the accuracy of the quantities greatly affects the final account of projects

in Saudi Arabia. Besides, many of the deserted projects were as a result of cost overruns whose main

cause is the inaccurate estimates and underestimation during the bidding stage. The responses from the

questionnaire, though, showed that the main cause of deviation in the final cost is largely attributed to

a lack of standard method or rather a unified method, of measurement in Saudi Arabia. Additionally, it

is revealed that the lack of sufficient project management planning and control measures in

construction projects is for the cause of the deviations in the final cost. As a result, it is recommended

that appropriate control measures are put in place to monitor construction projects in Saudi Arabia and

that programs for continuous professional development for contractors be established in the country.

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Sultan Mushabbab R. AlAssiry, Nik Mustapha, The impact of quantities accuracy on the ………

Keywords: Quantity estimates; final account; initial estimates; cost overruns; bill of quantities

(BOQ); front loading; contract sum; standard of measurement

1. Introduction

Estimation of quantities of materials and cost is an important activity in a construction

project process. The level of accuracy in the estimation works determines to a large extent

the success of a project, especially, when the project involves a competitive bidding.

Inaccurate estimations, particularly, lower estimation of the quantities and subsequent cost

automatically leads to cost overruns and inability of the contractors to effectively finish

project [1]. Determining the quantity of materials that are required for a construction project

to create a built environment is a role of a quantity surveyor. A quantity surveyor (QS) is the

cost estimator of a construction project’s materials and labor requirements of the project.

Therefore, quantity surveying is defined as the process of estimating the amount of materials

required for the completion of a project [2]. The main of role of a QS in cost management

currently entails cost planning, estimating the costs, value management, feasibility studies,

life-cycle costing, cost-benefit analysis (CBA), tendering, and valuation. The estimates of the

quantities of resources and materials needed are directly related to the budgeting and cost of

most projects [3]. The QS is, therefore, tasked with the role of determining the cost of

individual materials that the project will require as well as the entire project's cost.

The cost of different construction activities and construction materials are quite different

and vary with time and location. It is, therefore, essential that emphasis is placed on accurately

estimating the quantity in order to minimize unforeseen errors and their impacts on the final

cost of construction [4]. These variations contribute to a wide level of discrepancies between

project estimates and the final project cost. To avoid a high level of differences in costing and

establishing accurate quantities of materials used in construction projects, governments and

organizations are currently shifting their focus to developing good QS in infrastructure and

other engineering projects [5]. As a result, the aim of this research paper is to investigate the

impact of quantities accuracy on the final costs of government’s projects in Saudi Arabia.

Although every country has a method of awarding and monitoring project contracts, it

is not unusual for contract failures to lead to the inability of contractors to finish the

projects [6]. In the event of such failures, the government is normally obliged to provide

answers to questions surrounding the problems of contract failures in order to prove

accountability of project budgets. Therefore, this study also includes recommendations for

institutional checks and balances that the Saudi Arabia government might apply to

estimating construction costs. This study focuses on projects undertaken by the Saudi

Arabia government as a case study since it is one of the many governments that have

suffered problems with accurately estimating its project costs and accounting methods.

1.1. Background

Managing the cost of construction projects is an integral part of project management.

This phase of cost control in construction projects begins when the quantities of the

construction project are first established. Therefore, the level of accuracy achieved in

establishing the quantities of materials that will be used in a project is directly related to

the accuracy of the cost projected for the project. For instance, if, during the taking-off of

quantities, there is an omission of essential materials, the initial cost estimates of the

project will differ significantly from the final cost of completing the project.

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JES ،Assiut University, Faculty of Engineering, Vol. 48, No. 2, March 2020, pp. 186–198

The quantities of materials estimated as necessary for different projects have often been

below their actual costs. Studies have shown that cost overruns have been widespread for

huge projects within the public sector for a long period of time. One of the main reasons for

this is the inaccuracy of materials quantities estimates during the initial stages of the project.

Since this problem may not be solved, even if all projects were to be awarded to private

companies, one of the solutions is to investigate the impact of accuracy of material estimates

and how they affect the accounts of the government projects. Some governments have tried

to solve this problem through privatization; however, the approach has still remained

inadequate. A closer look at the root cause of these incomplete projects has revealed one

major trend: the estimates of quantities of materials needed have not been accurate.

Therefore, lesser and inadequate amounts of money were allocated for those projects.

Accurate estimates of material quantities are an important aspect of project management, and

governments should consider various methods of obtaining estimates to avoid unforeseen costs

and errors that could result in project completion difficulties due to inadequate financing.

1.2. Statement of problem

Saudi Arabia is currently experiencing several cases of many stalled and unfinished

government projects. Some of the projects have stalled for quite some years now with no

likely definite dates for their completion [6]. Although these projects have already

consumed large sum of taxpayers’ money, they are of no value in their unfinished state [6].

Several reasons are being put forward to explain why the projects have been deserted by

the contractors before completion, and inaccuracies in the initial estimation of cost and

quantities for those projects has been listed as the main cause.

The level of accuracy in estimating the quantities of materials in a construction project

has a significant impact on the final cost of projects. Inaccurate estimation of quantities leads

to either over budgeting and cost inefficiencies or project delays. For instance, if the

estimated quantities are more than the required quantities for a project, then there will be

“wastage” and consequently cost overruns [7]. On the other hand, if the estimated quantities

are less than the required quantities for the project, the result will be a delay in completing

the project. The delays are due to interruptions caused when the project is out of materials to

sustain the construction process. It is of utmost importance that the estimation of quantities is

done with greatest level of accuracies to alleviate the aforementioned problems.

1.3. Significance of the problem

A number of researches have been carried on the impact of inaccuracy in estimations of

quantities on the final account of projects in different countries. However, no case of such

study has been conducted in Saudi Arabia. This makes this study of great importance not

only in Saudi; but also, in other nations that have similar economic characteristics and

governance as Saudi Arabia. Besides the approach of the study is unique as it incorporates

questionnaire that were used to get the real information from the experts in the

construction sector as well practically comparing with a case study of a resent construction

project in Saudi Arabia. The findings are, therefore, combined outcomes of mathematical

analysis, observations from the respondents and assessment from cases study.

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1.4. Objectives

The main objective of this research paper is to investigate the impact of quantities accuracy

on the final costs of government projects in Saudi Arabia. To achieve its main objective, the

research included a number of specific objectives. These specific objectives include:

1. To collect information using structured questionnaires from people in the construction

sector about the initial and final costs of government projects in Saudi Arabia

2. To carry out a case study of the King Faisal Specialist Hospital and Research Centre

to establish how estimation of the quantities affected the final cost of the project

3. Using statistical analysis methods to analyzing the relationship between the final costs

and the front-loading elements; and the specific objectives for this paper were developed

by formulating research questions that guided the methodological approach of the study.

As such, four research questions for the paper were formulated, as follows:

1. What is the view of the people working in the construction sector regarding the effectiveness

of quantity estimation and its associated impact on the final cost of the government projects?

2. How much is the effect of the quantity estimates on a real project whose initial

quantity estimates is known and the final cost also known - the King Faisal

Specialist Hospital and Research Centre Project?

3. What is the mathematical and statistical explanation of the findings in explaining the

effect of quantity estimations on the final cost of government projects?

1.5. Scope of the research

The scope of this research study is limited to investigating some recently completed

infrastructure developments in Saudi Arabia. The study will review literature related to the

topic of this research and the objectives stated in this paper; the review of the literature will not

be limited to literature about Saudi Arabia government projects but will include all the relevant

materials about project management, quantity surveying, project costing and project planning.

1.6. Rationale for selecting King Faisal specialist hospital and research centre project

The King Faisal Specialist Hospital and Research Centre Project is chosen because it is

a current project in Saudi Arabia. The project is also known to many people, besides being

a government funded project and can easily, thus, making it relevant to research.

2. Literature review

Estimating the quantities of materials to be used in a construction project is one of the

major challenges in a construction process. Accurate estimation quantities are very essential

in ensuring a successful construction process [8]. If the estimation of quantities is not

properly carried out, the project is bound to experience problem. For instance, the contractor

may be unable to finish the project in time due to running out of funds for the project when

the agreement is based on the initial estimates. Additionally, the government may also be

forced to pay extra fee for project whose quantities overestimated, hence making the

construction project to be unnecessarily expensive [9]. In a nutshell, accurate quantity

surveying practice is one of the most important determinants of a project’s success or failure.

This is because the process of determining the correct quantities and project cost estimate

falls under the docket of a project’s quantity surveyor. This section, thus, provides a critical

discussion and analysis of previous literature materials on the subject of quantity estimation,

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the effect of accuracy of estimation on construction project, construction project and

estimation of quantities, and all other literatures relevant to the objectives of the study.

2.1. Initial estimated cost and pre-design costing

Deviations between the final cost and the preliminary tender estimates are a major

source of worry to experts in the construction sector. In the preliminary stages, the

estimated capital cost and the duration of the project are normally established and form the

proposal document from the contractor(s) to the client. The estimation of cost and duration

are based on careful considerations of all the forecasted conditions during the construction

process [10]. It is at these initial stages that the cost estimators consider all the time and

cost factors that will guarantee the success of the project.

According to [4], the main objective of the preliminary cost approximations is to

exhibit the probable construction expenditure. The initial cost estimate for the project is an

important factor in the client determining whether to continue with the project, and if so

the best funding technique for the project. Thus, it is very important that some level of

precision in the preliminary cost estimation is achieved without over- estimating or

underestimating the project expenditures [11].

Preliminary estimates are always stated before a detailed project design is carried out.

According to [12], the preliminary cost approximations are just meant to predict the project

cost before the detailed design and contract are prepared. This way, the client is

enlightened as to the possible expenditure commitments they should expect for the project.

The preliminary estimates should be as close as possible to the final cost of the project.

Subsequently, the pre-design costing based on establishment of quantities is critical in

helping to design the best planning and control system by the project managers. According

to [13], it is at the pre-design costing stage that the project management team should be

very careful in accurately establishing accurate cost estimates and quantities of materials.

The project management team should use their intuition and judgement to establish the

best cost control tools for the project [13]. The pre-design cost estimates form the basis for

the project contract; thus, accurate estimates are paramount in a construction project.

2.2. Saudi Arabia project measurement

Construction measurement methods vary from country to country. Although unified

units of measurement do exist. In construction, the guiding principles for construction

measurement’s major role are to cub errors in cost approximation [14]. These guiding

principles are the rudiments for the development of successful projects.

By 2016, Saudi Arabia had many ongoing infrastructure projects, but the emphasis was

on the development of a proper and unified method of cost estimation. The main aim of

the unified measuring methods was to reduce the errors associated with improper ways of

estimating the total budget of a project [15]. As a matter of fact, the total amount of money

that was allocated to these projects was estimated to be approximately $629 billion with an

estimated $500 billion set aside for the development of the economy over the following 30

years. The mismanagement of the funds led to a dwindling economy and a loss of revenue.

The new rules of measurement focus on three functions. The first is to ensure that a

clear understanding exists between the various project stakeholders and to reduce the gap

in information sharing. The second function is to ensure that anyone involved in the project

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is very conversant with the applicable practices of their work and what is required of

him/her. Finally, the third function is to ensure consistency across the whole project’s

lifetime [16]. The introduction of these new rules ensures that there is more consistency in

the results of cost estimation as well as the budgetary allocations [17]. These three new

rules also introduced a focus on the whole lifecycle of projects.

The final part of the new rules of measurement is rule three. This rule provides tables that

describe the works likely to be associated with a project and the necessary materials that may

be required for the procurement purpose. It also includes detailed rules on the development

of the bill of quantities and the rules that govern the type of information to be tabulated [19].

Moreover, it provides rules that may be used in governing special works and, as such, is

fundamental for the development of major projects in Saudi Arabia.

2.3. Front-loading and final costs

The origin of the front-loading concept is due to losses that lead to imbalances in the final

cost; this refers to the earned value management system, which indicates cost overruns as

well as the budgetary allocations of both the critical and the float activities [2]. Project

managers who have the necessary project management skills understand the signs that can be

observed during the initial stages of the project, but other managers may not have the

necessary skills to understand this [2]. As a matter of fact, the latter may give an indication of

the need to cancel the project. Through front-loading it is possible to rectify the early signs of

construction costing problems, thereby allowing an expert to put in place corrective measures

that will stop future losses [2]. A skilled project manager may opt for variances early in the

project's life, but this may not sit well with the other stakeholders.

The organization's performance in the early part of the project is usually excellent

because of the allocation of both the resources and the manpower for the completion of the

initial project tasks [6]. The other reason for offloading may be because there is more

confidence in the tasks that are likely to be performed in the near future than there is in

tasks that are to be performed in the distant future [18]. Failure to correctly price the work

during the contract negotiation stages usually results in front-loading. An increase in the

prices without a corresponding

The measurement of front-loading on a project is normally done using a cost performance

index (CPI). The CPI measures the efficiency of the project in terms of the works completed

and the costs incurred [6]. It is used only for projects that employ the earned value

management system and is based on the outputs and inputs to the system [19]. The

calculation is therefore based on the budgeted cost for work to be performed and the actual

work performed. The former is usually the output while the latter is the input.

Regardless of the CPI, it is important to establish the effect of front-loading on the

actual cost. Front-loading of elements usually results in a change in the accounts, mainly in

terms of the cash, and this is necessary for measuring the likelihood of a project's success

or failure [18]. An improperly managed project is likely to offload too much, and this may

result in losses in the final cost details.

Therefore, front-loading may result in an imbalance of the final accounts. The bids and

tenders used by the contractors are the main causes of an imbalance. The amount of money

that may be requested by the contractor may supersede the amount that was to be allocated

to the project [19]. On the other hand, front-loading of the budget or schedule may result in

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incomplete work. Front-loading prioritizes the initial work, which may mean that there

may not be sufficient funds or resources for work to be executed later on. Therefore, it is

important to establish the project requirements before the actual front-loading is done.

2.4. Deviations in the contract sum and the final cost

The final cost of a project is comprised of the summary of all the financial statements of a

project established after the alteration of the primary expenditure and the interim sum of the

items, remeasurement of interim quantities, measurement of differences, assessment of

variations, and ascertainment of claims. For instance, [23] examined a cost presentation of

water drilling and showed that 38 of the total 47 cases studied experienced cost overruns while

the remaining 25% were accomplished within the budget. They ascribed the cost overruns to

deprived contractor administration, uneven monthly imbursement, problems from the financing

agencies, poor material procurement and administration systems, deprived technical routines

on the part of contractors and consultants, and the increase of materials bills. From the study,

[23] made a number of suggestions: that proper capital levels should always be stated at the

preparation stage of the project so that steady reimbursement could be made to contractors for

work done; that in order to advance contractors’ administrative services it is essential to have

continuous professional training programs for staff in the engineering sector to apprise their

skills and be conversant with project management procedures and methods; that operative and

competent materials procurement and administration structures ought to be put in place within

projects, as substantial procurement mishandling leads to the possibility of major interruptions

to construction projects due to otherwise undeserved cost overruns; and that there should be a

satisfactory contingency stipend in order to cover the upsurge in material costs due to inflation

2.5. Reducing errors in the bill of quantities

A bill of quantity is based on qualitative and quantitative analysis, so improper management

and analysis is likely to cause errors in the final document [20]. A number of options are

available that can ensure a reduction in the errors likely to be accumulated in either the

qualitative or quantitative aspects of a project. These strategies are aimed at ensuring that the

overall cost of the project is kept to a minimum and that there is no redundancy in the

estimation procedure [25]. The first approach is a comparative analysis of the items priced in

the bill of quantities with the prices and quantities derived from other traditional as well as

advanced technologies [25]. Software is used to estimate the total cost of the materials and the

quantities to be used, and this may provide insight into the likelihood of an error. Computer-

aided design may be used to determine the total quantities of materials to be used; this may

help when estimating the total cost of a project. The comparison acts as a check to ensure that

there is no double counting or overpricing.

Using the bill of quantities as a design quality management tool is a method that may be

used to minimize the error in final measurement [21]. It is used alongside other pre-

contract and post-contract documents to ensure that there are fewer errors. The pre-contract

document indicates the total price of the project while the post-contract documents show

the actual cost of the project. Therefore, all these documents need to be based on the costs

that are described in the bill of qualities.

Regarding the overall success of the project, the most important determinants are the

management of project activities and the input and output factors in the project [25]. These

determine the various factors to be included in the BOQ; as such, a proper framework has

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to be developed to ensure that there is very little chance of error in the final documents.

Nevertheless, project success is determined by the iron triangle of time, cost and money.

An investment analysis is used as a reporting tool concerning the project’s success or failure.

It is based on the performance of the management throughout the whole project's lifecycle. This

tool is also be used to determine the rate of return for the whole project by determining the

activities to be undertaken during the pre-planning phase, the planning phase, design phase, and

the other project phases [22]. As with the return on investment, the investment analysis is useful

in determining the baseline for the whole project, which will be useful for determining the actual

rates of return through the various project phases. This tool can, therefore, be used to determine

some of the contractor’s financial factors such as overhead and profits, among others.

Benchmarking is the final methodology that may be employed to reduce errors in the

bill of quantities. The basis of benchmarking is comparisons; the project is compared to

other similar projects that have been successfully undertaken [23]. However, it is based on

comparative analysis through interviews and questionnaires regarding various aspects of

the project. This may provide significant insight regarding the quantities likely to be

needed and therefore reduce the margin of error on the actual project.

3. Methodology, findings, and discussion

3.1. Selection of project samples

The research involved sampling through the use of a questionnaire and the sampling of

five recently completed projects in Saudi Arabia. Sampling of the projects was done using

the BOQs from the initial tendering stage and the projects' final accounts after completion.

The projects sampled and analyzed included:

Project A: Upgrading the clean steam generators, heat exchangers and air in the

King Faisal Specialist Hospital and Research Centre;

Project B: Rehabilitation of two diesel tanks' fire suppression systems in the King

Faisal Specialist Hospital and Research Centre;

Project C: Upgrading the chilled water system in the King Faisal Specialist Hospital

and Research Centre;

Project D: Replacement/upgrading of fire protection system in the C-complex of the

King Faisal Specialist Hospital and Research Centre; and

Project E: Upgrading of Hita and the disaster recovery building power system to the

tier-III level in the King Faisal Specialist Hospital and Research Centre.

The population used for the questionnaire sampling for this researched included

contractors, consultants and project managers from the Saudi Arabia construction sector,

government departments and ministries. With regards to Saudi Arabia's major construction

projects, the government is the main client in most projects and is always represented by

various ministries. Thus, the responses obtained from the various ministries also

represented the client's (government's) responses to the questionnaires.

The sample size was established using the formula of [24]

𝑛 =N

1 + 𝑁 (𝑒)2′

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where n is the sample size, N is the population size, and e is the precision level (+5).

Thus, the total error is 0.1 at a confidence level of 95%.

The data set used in this section for analysis has been obtained from the questionnaires;

three hundred and fifty questionnaires were distributed to various ministries and

departments that deal with construction projects. of the 350 questionnaires, only 230

respondents completed and submitted the questionnaires to the researcher. The

questionnaires were distributed online and completed online. The responses to the

questionnaires are as shown in the appendix.

3.2. Analysis of data

3.2.1. Analysis of project data

Mean

The mean for the sum total of the selected projects' initial and final accounts were

determined as shown in the table below, using the formula of arithmetic mean:

x̅ =∑xi

n .

Table 1.

Means of the initial and final accounts of the projects

The mean for the final accounts of the sampled project budget is greater than that of the

initial BOQs. This points out a variation between the initial and the final accounts.

However, the analysis on the final cost is based on the assumption that the final cost is

directly related to the quantities of the materials used.

The comparison of the initial account and the final account of BOQ is as shown in

figure 1 below. Project B and D shows no variation while the remaining projects shows an

increase in the final account.

Fig. 1. Graph showing comparison between initial and final account BOQ

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Standard Deviation

Standard deviation for the project data was calculated using the formula

σ = √Σ(xi − x̅)2

n

Mean:

x̅ =7734982.428 + 10128233.8

2= 8931608.114

and the sandard deviation is calculated according to this formula:

σ = √(7734982.428−8931608.114)2+(10128233.8−8931608.114)2

2= 1196625.686.

Regression Analysis

In this study, a regression analysis was performed to show the trend between the initial

BOQs of the selected projects and their respective final accounts. The regression summary

output as produced from the Excel program is as follows:

Table 2.

Regression analysis summary output

From the Excel output, R-squared shows that 66% of the variance in the initial BOQ accounts'

returns is attributable to the final accounts' returns of the project. The statistical significance of the

relationship is 0.096, much lower than the standard 0.5 threshold. Thus, the relationship is not

considered statistically significant [25]. The coefficient of 0.63 for the final account indicates that

for the data set analysed, for an increase in the initial BOQ account by 1%, the changes impacted

on the final account by 0.63%. This also shows that the amount of the quantities is not of much

significance to the final acost of major construction projects in Saudi Arabia.

T-test (Hypothesis Test)

A two-tail test was conducted on the sample project BOQs and the results were

analysed using the Excel software. The hypotheses for the T-test are as stated below:

H1: Null Hypothesis: The accuracy of the quantities affects the estimation of

project costs and cost plans of the entire project.

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t-Test: Two-Sample Assuming Unequal Variances

Variable 1 Variable 2

Mean 7734982.428 10128233.8

Variance 4.17763E+13 6.82338E+13

Observations 5 5

Hypothesized Mean Difference 0

df 8

t Stat -0.510219518

P(T<=t) one-tail 0.311836822

t Critical one-tail 1.859548038

P(T<=t) two-tail 0.623673644

t Critical two-tail 2.306004135

H2: The final cost of government projects is affected by the cost control

measures put in place by the government.

H3: The final cost of a government project is affected by the project management

strategies and techniques…

The results of the tests as obtained from the Excel tables are as shown below:

Table 3.

T-test summary output

From the table above, t Stat > -t Critical two-tail while t Stat, thus the null hypothesis

for the t-test is not rejected. For that reason, it can be stated that “The accuracy of the

quantities affects the estimation of project costs and the cost plans of the entire project.”

3.2.2. Questionnaire data analysis The main aim of the questionnaires was to obtain the views, on the ground, of the

expert in the construction sector rather than relying entirely on literature materials. The

information from the questioned formed the basis for real time observations of what was

going on in the constructions sector with regards to the objectives of this study.

Appropriately structured questionnaires were distributed to various people working in the

construction industry. The largest occupational group of the respondents was people

holding a managerial position, with a representation of 34.8% of the total sample. The

responses received came from 15 cities within Saudi Arabia, as shown in the results from

the questionnaire. Of the organizations interviewed, 95.7% had an on-going project. This is

very important because their responses reflect real-time situations on the ground.

Although a number of costing methods exist in Saudi Arabia, according to the

responses the bill of quantities method is still the most popular at 73.9%, followed by the

square meter cost method. Other methods of construction costing as listed in the

questionnaires include the Auto-CAD and Excel method, contracts based on fixed unit

price a lump sum method of project costing. Moreover, 56.5% of the respondents

confirmed their awareness of the existence of unified rules of measurement for

construction projects in Saudi Arabia. However, only 9.5% percent of the respondents

confirmed a complete understanding of the other method(s); and 52.4% only have a basic

understanding of the unified rules of measurements whereas 38.1% do not completely

understand it. Interestingly, 60.9% of the respondents are unsure whether the construction

experts in Saudi Arabia even understand what the unified rule of measurement in

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construction is. The remaining percentage (39.1%) confidently believes that the experts in

the Saudi Arabia construction sector do not understand the unified rules of measurement.

The unified rule of measurement in construction is an important tool that forms the basis

for effective construction costing and consequently eliminates high cost overruns in projects.

The respondents gave their opinions about what to do about the issue of unified rules of

measurement in construction. Other than those who believed that there are no unified rules of

measurement in construction within Saudi Arabia, the suggestions included: need be

contributed within all sectors websites using measurements to have more knowledge and to

aware all workers who uses measurements; need to be managed by central organization to

get more benefits, and establishing a special institute for training, among others.

From the responses, it was clear that both government and private construction projects

lack experienced cost estimators. The responses show that a meager 8.7% of the

respondents are of a contrary opinion to the aforementioned statement. Even the

government projects for tenders are not effectively assessed to evaluate the correctness of

the BOQ; according to the survey, only 34.8% of the respondents confirm that government

projects indeed undergo rigorous costing evaluations.

The general feeling of the people in the construction sector as reflected by the survey is

that the construction projects in Saudi Arabia have inefficiencies when it comes to estimating

project costs. Although there it is always a priority to consider cost overruns in construction

projects, not much is being done as far as putting in place measures to minimize construction

cost overruns. From the questionnaire responses it is also clear that the government has not

been pro-active in regulating or putting in place construction cost control tools.

4. Conclusion

The statistical analysis performed shows that variations exist between the initial cost

estimates and the final accounts of the construction projects sampled. From the regression

analysis it can be concluded that there is no statistical significance in the variations

between the initial estimate and the final accounts. From the analysis it is also concluded

that the null hypothesis for the two-tail t-test holds, which shows that the accuracy of the

quantities affects the estimation of project costs and cost plans of the entire projects. The

results of the statistical analysis show that the establishment of quantities has no major

impact on the final costs of the construction projects in Saudi Arabia.

However, from the questionnaire responses it can be concluded that in Saudi Arabia there

is no clear standard for construction costing. The government has no measure in place to

achieve the standardization of construction costing. It is also clear from the survey responses

that construction project costing in Saudi Arabia is marred by inefficiencies and inaccuracies.

The reason for these inefficiencies and inaccuracies is due to the lack of standardized

methods of costing of construction projects. There is also lack of clear understanding in the

construction sector regarding the unified rule of measurement in construction. And, since

there are no standard principles or control system, the contractors are at liberty to use any

method they wish regardless of its impact on project costs. Another reason for

inefficiencies and inaccuracies is the lack of a minimum qualification standard for

contractors and/or individuals undertaking construction projects.

198


5. Recommendation

In order for the government of Saudi Arabia to correct this situation it is recommended that:

The government establishes and enforces a clear standard of quantity pricing and

measurement that is applied to all construction projects.

The government should be strict with the established standards such that all the

government projects should be awarded only to contractors that demonstrate

adherence to the set standards.

before any project is approved to be executed, there should be proof of engagement

with licensed professional quantity surveyor of good competence and reputation

a thorough audit is conducted on all the ongoing projects to establish cost overruns;

The government set minimum qualifications for all construction contractors’

personnel, registration and subsequent execution of projects;

the government should enforce strict penalties to projects that involves inaccurate

quantity estimation to ensure attention to details is well checked

The government rolls out programs to sensitize all the stakeholders about the

importance of engaging qualified quantity surveyors in construction projects.

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تأثير الدقة في الكميات على الحساب الختامي

في المشاريع الحكومية بالمملكة العربية السعودية

العربى الملخص

أن قضية التكاليف في مشاريع البناء تشكل اهتمام كبير في المملكة العربية السعودية. القضية مهمة للغاية لدرجة

المشاريع في البلاد. وقد اقترحت عدة أسباب لشرح أسباب تجاوز التكاليف والانحرافات في أنها أدت إلى توقف بعض

التكاليف النهائية للمشاريع. وتشمل هذه الأسباب: عدم الدقة في تحديد كميات المواد اللازمة خلال مرحلة التصميم ؛

ركة الكافية للمساحين ذوي الخبرة في مشاريع عدم وجود طريقة موحدة للقياسات. التقلبات في أسعار المواد. عدم المشا

البناء ، على الرغم من عدم وجود أي دراسات علمية تثبت ان اي من هذه الأسباب هي بالفعل أسباب تجاوز التكاليف .

تعرض هذه الورقة النتائج التي توصل إليها تحقيق حول تأثير الدقة في تحديد كميات المواد كسبب للانحراف في

يف النهائية لمشاريع البناء في المملكة العربية السعودية. الهدف الرئيسي من هذه الدراسة هو إظهار كيف تؤثر دقة التكال

أو عدم دقة الكميات على التكاليف النهائية للمشروعات الحكومية في المملكة العربية السعودية.

مسة مشاريع تم إنجازها مؤخرا في المملكة العربية السعودية شملت الدراسة تحليلا إحصائيا ً للتكاليف الأولية والنهائية لخ

وكذلك المعلومات التي تم جمعها من خلال الاستبيانات. وكذلك المعلومات التي تم جمعها من خلال الاستبيانات. وتم تحليلها

بين للاستبيان. استبيانا مكتمل من المجي 230مشاركا وفقط تم استلام 350احصائيا حيث تم إعطاء ما مجموعه

وقد أدت النتائج إلى ما مفاده أنه على الرغم من أن دقة الكميات تؤثر على التقدير الدقيق لتكاليف المشروع وخطط

التكلفة الخاصة بالمشاريع بأكملها بالإضافة إلى التكلفة النهائية ، فهي ليست السبب الرئيسي لتجاوزات التكلفة والانحرافات

ئية في المشاريع الحكومية في المملكة العربية السعودية. ومع ذلك ، أظهرت نتائج الاستبيان أن السبب في التكلفة النها

الرئيسي للانحراف في التكلفة النهائية يعزى إلى حد كبير إلى عدم وجود طريقة قياسية أو بالأحرى طريقة موحدة للقياس

الكشف عن أن عدم وجود إجراءات كافية للتخطيط وإدارة المشروع في المملكة العربية السعودية. بالإضافة إلى ذلك ، تم

في مشاريع البناء هو سبب الانحرافات في التكلفة النهائية. ونتيجة لذلك ، يوصى باتخاذ تدابير رقابية مناسبة لرصد

المملكة.مشاريع البناء في المملكة العربية السعودية وإنشاء برامج التطويرالمهني المستمر للمقاولين في

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