Determining and monitoring of project contingency sum for building developments in Ghana. (A case Study in Ashanti and Greater Accra Regions)
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Date
2008-08-08
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Abstract
Risk management is a major concern to players in the construction industry.
Poor management of risk has resulted in delay in completion of projects, and in some cases leading to litigation. Several management strategies have been adopted for managing risk. Amongst such strategies is the use of Contingency Sum in construction projects. This study was to identify existing methods and factors influencing determination, monitoring Contingency Sum and propose guidelines for determining and monitoring Contingency Sum. Random sampling technique (stratified) was used for determining sample size for selected building professionals (Quantity Surveyors, Architects and Civil Engineers), using the Kish formula. 250 questionnaires were administered to professionals in the building industry and 133(53.2%) were returned.
Data collected were analysed using the relative important index (4 - most important factor and 1 – least important ranking). Kendall’s co-efficient of concordance was used to measure the degree of agreement among the selected professionals. The study identified that Deterministic approach (percentage method) was the most widely used method. Unexpected ground conditions (substructure works), design consideration and inflation were identified as the most influencing factors. Contingency Sums were mainly monitored by Project Managers. The study concludes by proposing a method for determining contingency sum and suggests the use of a more scientific approach such as Estimating Using Risk Analysis or the Monte Carlo Simulation. Further, an over site body should be established to monitor the management of Contingency Sum.
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A project report presented in partial fulfillment of the requirements for a degree of Master of Science in Construction Management.