- Title
- Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction
- Creator
- Love, Peter E. D.; Ika, Lavagnon A.; Ahiaga-Dagbui, Dominic D.; Locatelli, Giorgio; Sing, Michael C. P.
- Relation
- ARC.DP160102882 http://purl.org/au-research/grants/arc/DP160102882
- Relation
- Production Planning & Control Vol. 30, Issue 4, p. 285-298
- Publisher Link
- http://dx.doi.org/10.1080/09537287.2018.1535675
- Publisher
- Taylor & Francis
- Resource Type
- journal article
- Date
- 2019
- Description
- A considerable amount of research has examined the cost performance of construction projects, yet there has been a paucity of studies that have examined the impact that client initiated change-orders and rework have on contractors. This paper seeks to add further clarity to this issue by replicating previous empirically-based research to establish the validity and reliability of the key issues influencing a contractor's cost performance. A total of 98 projects were used to examine the value of rework and change-orders and their influence on a contractor's margin. Only 65% of projects experienced a cost increase, though a mean rework cost of 0.39% of the contracted value was incurred. The difference between approved client change-orders and those by the contractor for subcontractors was 0.5% of the total costs incurred, which adversely impacted the organisation's profit. Margin losses may well have been higher as rework is seldom formally documented and reported.
- Subject
- construction; change-orders; contractor's margin; rework
- Identifier
- http://hdl.handle.net/1959.13/1437349
- Identifier
- uon:40325
- Identifier
- ISSN:0953-7287
- Language
- eng
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