Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction
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...
| Main Authors: | , , , , |
|---|---|
| Format: | Journal Article |
| Published: |
Taylor & Francis
2018
|
| Online Access: | http://purl.org/au-research/grants/arc/DP160102882 http://hdl.handle.net/20.500.11937/74311 |
| _version_ | 1848763238947225600 |
|---|---|
| author | Love, Peter Ika, L. Ahiaga-Dagbui, D. Locatelli, G. Sing, M. |
| author_facet | Love, Peter Ika, L. Ahiaga-Dagbui, D. Locatelli, G. Sing, M. |
| author_sort | Love, Peter |
| building | Curtin Institutional Repository |
| collection | Online Access |
| 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. |
| first_indexed | 2025-11-14T11:00:18Z |
| format | Journal Article |
| id | curtin-20.500.11937-74311 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:00:18Z |
| publishDate | 2018 |
| publisher | Taylor & Francis |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-743112022-11-24T07:46:29Z Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction Love, Peter Ika, L. Ahiaga-Dagbui, D. Locatelli, G. Sing, M. 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. 2018 Journal Article http://hdl.handle.net/20.500.11937/74311 10.1080/09537287.2018.1535675 http://purl.org/au-research/grants/arc/DP160102882 Taylor & Francis fulltext |
| spellingShingle | Love, Peter Ika, L. Ahiaga-Dagbui, D. Locatelli, G. Sing, M. Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction |
| title | Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction |
| title_full | Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction |
| title_fullStr | Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction |
| title_full_unstemmed | Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction |
| title_short | Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction |
| title_sort | make-or-break during production: shedding light on change-orders, rework and contractors margin in construction |
| url | http://purl.org/au-research/grants/arc/DP160102882 http://hdl.handle.net/20.500.11937/74311 |