Engineering, Technology & Applied Science Research Vol. 14, No.

6, 2024, 18330-18347 18330

Categories and Factors of Cost Overrun in

Construction Projects: A Systematic Review
Omar Afana
Engineering Management Program, University of Sharjah, UAE
U18105558@[Link] (corresponding author)

Radhi Al Zubaidi
Civil Engineering Department, College of Engineering, University of Sharjah, UAE
ralzubaidi@[Link]

Saleh Abu Dabous

Civil Engineering Department, College of Engineering, University of Sharjah, UAE
sabudabous@[Link]

Fakhariya Ibrahim
Sustainable Engineering Asset Management Research Group, University of Sharjah, Sharjah, UAE
U18200664@[Link]
Received: 15 September 2024 | Revised: 9 October 2024 | Accepted: 16 October 2024
Licensed under a CC-BY 4.0 license | Copyright (c) by the authors | DOI: [Link]

ABSTRACT
Cost overruns represent a significant challenge in construction project management and often compromise
project success. This study addresses gaps in previous research, particularly the lack of a unified
classification of cost overrun factors. The aim is to provide a comprehensive, unbiased, and structured
synthesis of existing research on the factors contributing to cost overruns in construction projects. It
involves identifying, evaluating, and categorizing studies to answer predefined research questions related
to cost overruns across various geographical contexts, project types, stakeholder perspectives, and project
lifecycle phases. Through a Systematic Literature Review (SLR), the current study identifies and
categorizes 99 factors into 10 distinct categories: 1) Execution, Resource, and Project Management Factors,
2) Design Factors, 3) Contractor Factors, 4) Consultant Factors, 5) Client Factors, 6) Financial
Management Factors, 7) Bidding and Cost Estimation Factors 8) Contracts, Legal, and Regulatory
Factors, 9) External Risks, Technology, and Sustainability Factors, and 10) Defects Liability Period (DLP)
Operations and Maintenance Factors. Additionally, the present research examines both advanced and
traditional methodologies for mitigating these overruns, emphasizing accurate cost estimation, risk
management, and the use of advanced technologies, like Building Information Modeling (BIM), alongside
strong financial and contract management. This paper synthesizes results from different global contexts to
establish a solid foundation for future academic research and industry practices aimed at alleviating cost
overruns in construction projects. It also promotes the development of customized frameworks that are
specific to a country, a lifecycle phase, or a combination of conditions.

Keywords-cost overruns; construction management; stakeholder collaboration; project lifecycle; systematic

literature review

I. INTRODUCTION stakeholder collaboration, resource management, risk planning,

and financial integration have become vital [2]. In addition to
A construction project is defined by specific objectives, a these internal project complexities, evolving regulations,
set timeframe, and an allocated budget. Despite this seemingly governance requirements, and client expectations for high-
straightforward concept, managing projects effectively quality, sustainable, and timely outcomes further complicate
throughout their lifecycle presents numerous challenges [1]. project delivery. Although the traditional focus on time, cost,
Historically, construction management focused primarily on and quality remains central, new priorities, such as
design, materials, and construction methods. However, with the sustainability, health and safety, ethics, and digital integration,
increasing complexity of modern projects, factors, such as have emerged. Modern construction management must now

[Link] Afana et al.: Categories and Factors of Cost Overrun in Construction Projects: A Systematic Review
 Engineering, Technology & Applied Science Research Vol. 14, No. 6, 2024, 18330-18347 18331

adapt to these dynamics, employing advanced technologies and the existing literature, the study seeks to standardize
management techniques to meet these evolving demands [3]. terminology and classifications, ensuring consistency for both
One of the most significant challenges in modern construction research and practical applications. The final comprehensive
management is controlling project costs. Despite advancements analysis will consider project type, region, lifecycle phase, and
in management practices and technology, cost overruns remain stakeholder perspective, providing valuable insights for
a common and persistent issue across construction projects understanding and mitigating cost overruns.
worldwide. These overruns can arise from various factors,
including inaccurate initial estimates [4] and unforeseen II. RESEARCH METHODOLOGY
complications during execution [5]. Identifying the key factors This study aims to build a conceptual foundation for future
that contribute to cost overruns is critical for developing investigations of cost overruns from perspectives such as
effective mitigation strategies [6]. geographical regions, types of construction projects, lifecycle
A. Problem Definition phases of construction, stakeholders’ engagement, and tool and
method evaluation. To achieve this, an SLR was conducted by
Cost overruns are a persistent challenge in construction integrating the Protocol, Search, Appraisal, Synthesis,
management. The complexity of construction projects often Analysis, and Report (PSALSAR) steps [18] within the
leads to discrepancies between planned budgets and actual guidelines of the Preferred Reporting Items for Systematic
costs, resulting in delays and unexpected expenses. Over the Reviews and Meta-Analyses (PRISMA) [19]. This approach
past 70 years, the average cost overrun in construction projects ensures a comprehensive and rigorous review process,
has been about 28% [7]. While completing projects within enhancing the validity and reliability of the findings. Figure 1
budget is a primary goal, unforeseen cost overruns frequently presents the research methodology adopted in this study.
impose financial strain and compromise project success [8]. A
cost overrun occurs when a project's actual expenses exceed its
initial budget, often due to unexpected circumstances [9]. In the
construction industry, this issue is particularly common, with
overruns ranging from 12% to 70% of the contract value [10].
Given the significant financial impact of these overruns, it is
crucial to understand their root causes in order to develop
effective mitigation strategies. Systematic research is essential
to identify, categorize, and analyze the factors contributing to
cost overruns, providing a foundation for more effective
management practices and mitigation frameworks.
B. Literature Review
Fig. 1. Research methodology flowchart.
Existing research identifies several factors contributing to
cost overruns, such as inaccurate cost estimation, project The initial stage involved delineating the research
delays, and inefficiencies during execution [11]. These factors objectives, formulating the overarching research questions, and
affect various phases of the project lifecycle, from initiation to defining the scope. Following the identification process, a
execution, operation, and maintenance. Many studies have search strategy to identify and retrieve relevant literature,
attempted to categorize these factors. For instance, authors in detailed in Section B, was developed. The authors conducted
[12] classified 119 cost overrun factors in Jordanian meticulous screening and selection of articles to ensure the
construction projects into 11 categories [12], whereas another quality and relevance of the selected studies. The PRISMA
study in the UAE identified 83 factors but lacked a structured checklist was applied to guarantee transparency and
categorization system [13]. The inconsistent classification of reproducibility in the selection process. The inclusion criteria
these factors across studies complicates analysis and hinders encompassed publication in peer-reviewed journals and
the development of effective mitigation strategies, relevance to construction cost overruns. Exclusion criteria were
underscoring the need for a unified and standardized established to rule out studies that were not peer-reviewed,
classification framework. Furthermore, many studies focus lacked relevance to the topic, or had insufficient
narrowly on specific aspects of cost overruns without methodological quality.
considering broader contexts. For example, a research on UAE
residential construction identified 12 cost overrun factors but Relevant data were extracted from the selected studies,
did not address quality or design-related issues [14]. Other including study characteristics, methodologies, key findings,
studies on high-rise buildings in India overlooked stakeholder and identified factors contributing to cost overruns. The data
perspectives [15]. Additionally, some research focused were then sorted to establish connections and patterns.
exclusively on the construction phase without specifying Subsequently, the extracted data were categorized according to
project types or locations, limiting the applicability of the various dimensions, such as the type of construction projects,
findings across diverse construction settings [16]. Evidence geographical regions, stakeholder involvement, and lifecycle
also suggests that cost overrun factors differ between countries phases of construction projects. Thereafter, the quantitative,
and types of construction projects [17]. To address these gaps, and narrative data analysis methods were performed.
this research aims to develop a unified framework for Quantitative analysis was conducted to categorize and describe
categorizing the particular factors. By systematically reviewing the data, whereas narrative analysis was used to interpret and

[Link] Afana et al.: Categories and Factors of Cost Overrun in Construction Projects: A Systematic Review
 Engineering, Technology & Applied Science Research Vol. 14, No. 6, 2024, 18330-18347 18332

synthesize the findings, identify trends and gaps, and compare papers, proceedings, dissertations, and theses. The ProQuest
results across studies. Conclusions and recommendations were database was utilized first to retrieve studies using a set of
then derived from the findings. The final stage involved the search parameters. Keywords such as "cost overrun" and
systematic reporting of the study's findings, highlighting key "construction" were mandated to appear in the title of the
findings and recommendations for practice and future research. studies. The temporal scope of the search was set from 2005 to
2023, with the inclusion criteria specifying full-text
A. Research Questions availability, English language, and source types limited to
The current research aims to answer the following key conference papers and proceedings, dissertations and theses,
questions: and scholarly journals. This search strategy yielded a total of 83
1. Based on the literature, what are the primary categories and relevant studies. Further refinement of the search criteria to
include the keyword "UAE" narrowed the results down to 21.
specific factors of cost overruns in construction projects?
A parallel search method was deployed in the Taylor and
2. What are the geographical and temporal trends in the Francis Online database, adhering to the same criteria. This led
literature on construction project cost overruns? to the identification of 18 relevant papers. Incorporating the
keyword "UAE" reduced the count to five. Extending this
3. According to the literature, which types of construction advanced search methodology to the ScienceDirect database
projects are frequently subject to cost overruns? revealed 19 pertinent studies. However, the inclusion of "UAE"
4. According to the literature, which stakeholders frequently as a search term yielded no results, highlighting a potential
research gap in this specific area.
contribute to cost overruns in construction projects?
The snowball sampling method was then utilized, in which
5. During which lifecycle phases of the construction projects
the references from the initially identified articles were
are cost overruns most frequently discussed? reviewed to find further relevant studies. This approach plays a
6. What are the primary research methodologies employed in crucial role in identifying seminal works and key studies in the
studies focusing on cost overruns in construction projects? field, which database-specific keyword searches may not
capture. Initial search across various databases resulted in an
7. What are the suggested mitigation strategies, action extensive collection of 443 papers selected based on their title
measures, and tools in the literature to address cost relevance to a comprehensive set of keywords and their
overruns in construction projects? synonyms, including "Cost," "Overrun," "Factors,"
"Construction," "UAE," "BIM," "Mitigation," "Building," "Life
8. What gaps and limitations exist in the current studies on Cycle," "Design," "Bidding," "Execution," and "DLP."
construction project cost overruns?
The screening process, involving an initial skimming of
Table I outlines the research questions and their respective titles and abstracts, led to the elimination of duplicates or
subsections. It highlights the subsection titles that provide papers irrelevant to the research scope. In addition, to ensure
detailed analysis and results, ensuring a clear connection the highest standard of research quality, the search was
between the research questions and their placement within the confined to 11 databases: [Link], ASCE Library,
study. Emerald, Google Scholar, MDPI, ProQuest, ScienceDirect,
Semantic Scholar, Springer Link, and Taylor and Francis
TABLE I. MAPPING RESEARCH QUESTIONS TO
RESEARCH OUTCOMES Online. Studies not sourced from these databases were
excluded. This refinement process reduced the selection to 144
Research papers. After reviewing the full texts, three studies were
Corresponding Study Subsections
Question No.
IV.A. Categories of Cost Overrun
excluded because their research aims did not align with the
1 primary focus of this research. Additionally, seven studies were
IV.B. Cost Overrun Factors
2 IV.C. Geographical Distribution excluded because they did not enumerate or discuss any factors
3 IV.D. Project Types related to cost overrun. Figure 2 summarizes the search strategy
4 IV.E. Stakeholders Analysis employed in this study.
5 IV.F. Lifecycle Phases Analysis
6 IV.G. Factors Identification Techniques The resultant 134 academic works included 12 review
7 IV.H. Mitigation Strategies journal articles, 102 journal articles, 12 conference
8 III.A. Examination of Earlier Papers proceedings, two PhD theses, five MSc theses, and one
diploma research. The 114 journal articles are distributed
B. Research Strategy across 78 distinct journals. The five most frequently cited
journals, demonstrating their prominence and significance in
The second stage of the research methodology involved a the realms of civil engineering and construction management,
meticulous search that aligned with the research questions. are: Buildings, cited nine times, International Journal of
ProQuest and Taylor and Francis Online were selected as the Construction Management, cited seven times, International
primary databases due to their relevance in construction Journal of Sustainable Construction Engineering and
management research, particularly for review papers Technology, cited five times, Engineering, Construction, and
addressing cost overruns in construction projects. Concurrently, Architectural Management, cited four times, and Construction
the ScienceDirect database was employed to broaden the Management and Economics, cited three times.
search, which encompasses scholarly journals, conference

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TABLE II. PREVIOUS REVIEW PAPERS
Ref. Database Journal Name
Taylor and Francis International Journal of
[20]
Online Construction Management
[21] MDPI Infrastructures
[22] ProQuest Webology
Engineering, Construction and
[23] Emerald
Architectural Management
Advance Researches in Civil
[24] Google Scholar
Engineering
International Journal of
[25] Google Scholar Sustainable Construction
Engineering and Technology
International Journal of New
[26] Semantic Scholar Innovations in Engineering and
Technology
International Research Journal of
[27] [Link] Engineering and Technology
(IRJET)
International Journal of
[28] Semantic Scholar Innovation, Management and
Technology
International Journal of Applied
[29] Google Scholar
Engineering
Journal of Civil Engineering
[30] Google Scholar
Research
Australasian Journal of
[31] ProQuest Construction Economics and
Building

The comprehensive analysis of previous review papers

reveals several gaps and areas where they may not fully align
with the current research objectives. These gaps highlight the
need for a more up-to-date, methodologically diverse, and
practically oriented analysis of cost overrun factors and their
mitigation strategies in construction management. The
identified gaps are:
 Limited Database Scope: Studies, like [20], confined their
literature search to only two databases, limiting the scope of
their findings. The present research, with a broader database
scope, aims to provide a more comprehensive
understanding of cost overrun factors.
Fig. 2. PRISMA flowchart adopted as the search strategy of this study.  Stakeholder Analysis: Previous studies lacked a thorough
analysis of specific stakeholders predominantly
III. DATA ANALYSIS contributing to cost overruns. The current research seeks to
The data for this analysis were gathered and organized into conduct a detailed examination of stakeholder roles and
a structured database using Microsoft Excel. Key details were influences, crucial for understanding the dynamics of cost
recorded, including the study title, author names, year of overrun scenarios.
publication, primary objectives, and identified research gaps.
Additionally, important aspects, such as the materials and  Phase-Specific Analysis: There is a need to explore how
methods used, geographical location, categorization of cost cost overruns manifest across different construction phases,
overrun factors, project lifecycle phases addressed, such as design, bidding, or post-construction, which is vital
identification of responsible stakeholders, construction project for developing effective mitigation strategies.
type, and proposed mitigation strategies were systematically  Diversity in Research Methodologies: Many reviews did
documented. not examine the research methodologies employed in the
A. Examination of Earlier Papers studies they reviewed. The current research intends to
explore a wide array of methodologies, particularly those
The initial phase of the analysis focused on earlier review applicable to various types of construction projects.
papers, examining their methodologies to identify gaps in their
review processes. This analysis is pivotal in establishing the  Mitigation Strategies: Studies, like [16, 17], did not
necessity and direction of this paper. Table II details the extensively address mitigation strategies for cost overruns.
distribution of these review papers.

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The present research aims to fill this gap by exploring framework to help address cost overruns effectively in future
specific mitigation strategies and tools. research and practical applications.
 Global and Regional Trends: Some studies, such as [25], IV. RESEARCH OUTCOMES
provided comparative analyses between developed and
This section explores various dimensions of cost overruns
developing countries but did not emphasize the latest global
in construction projects, analyzing data from the literature
and regional trends in construction management.
through multiple lenses. It focuses on identifying key
 Prioritization and Categorization of Factors: Research, like contributing factors and assessing trends across previous
[19, 20], compiled extensive lists of cost overrun factors but studies, including geographical distribution, project types,
did not prioritize or categorize these factors in terms of their stakeholder involvement, lifecycle phases, and proposed
impact, manageability, or frequency of occurrence. mitigation strategies. By synthesizing this information, the
research provides a comprehensive understanding of cost
 Innovative Approaches and Latest Trends: There is a gap in overruns while addressing gaps and uncovering patterns in
emphasizing the latest trends and methodologies in earlier studies.
construction management, which is critical for
understanding the current and future cost overrun dynamics. A. Cost Overrun Categories
 Context-Specific Analysis: Studies like [17], highlighted Previous studies on cost overruns in construction projects
the need for context-specific analysis in construction often approached the issue from a limited perspective, for
management, considering the unique challenges in different example, focusing on specific stakeholders, such as clients,
geographical locations and project types. contractors, or consultants, project lifecycle phases like design,
execution, or operation, or areas within project management,
 A Comprehensive Analysis of Delay Factors: A such as risk or cost management, as outlined by the Project
comprehensive analysis of delay factors and their Management Institute (PMI). Although these approaches offer
mitigation strategies is necessary to complement studies on valuable insights, they fail to capture the full complexity of the
construction delays, such as [31]. factors contributing to cost overruns. These studies often
overlook the interconnections between various aspects of
 Practical Implications and Best Practices: There is a need construction management. Recognizing these limitations, this
for research that not only contributes to the academic research presents a more comprehensive and multidimensional
literature, but also provides practical implications for categorization addressing all critical aspects of construction
improving project management practices, especially in project management. By integrating existing perspectives and
developing targeted mitigation strategies, addressing introducing additional dimensions, such as environmental,
specific challenges identified by stakeholders. social, sustainability, technology, and innovation factors, this
This research aims to fill in the gaps in the existing review approach provides a more holistic understanding of cost
literature and previous studies by looking at the causes of cost overrun factors.
overruns and how to avoid them in a more thorough, up-to- To establish the final list of cost overrun factors and
date, and methodologically varied way. categories, a detailed review of the literature was undertaken.
B. Categories and Factors of Cost Overruns This process involved compiling relevant factors from various
studies, grouping similar factors to avoid redundancies across
Managing cost overruns in construction projects is a
categories, and performing multiple rounds of cross-checks and
complex challenge. Although various studies have tried to
refinements. This effort resulted in the identification of 10 key
identify and categorize the factors behind cost overruns,
categories that represent the diverse factors influencing cost
inconsistencies in classification have made it difficult to create
overruns in construction projects. The primary categories
a unified framework. This section highlights how different
identified are: 1) Execution, Resource, and Project
studies have categorized these elements, revealing the need for
Management Factors, 2) Design Factors, 3) Contractor Factors,
a standardized approach to better address cost overruns. For 4) Consultant Factors, 5) Client Factors, 6) Financial
example, studies have classified "Shortage of Materials"
Management Factors, 7) Bidding and Cost Estimation Factors,
differently, that is, as a "Non-Human Resource" [32], a
8) Contracts, Legal, and Regulatory Factors, 9) External Risks,
"Material and Machinery Related Factor" [33], or a "Lack of
Technology, and Sustainability Factors, and 10) DLP
Coordination" among contracting parties [34]. Similarly, some
Operations and Maintenance Factors. This refined
studies place "Unclear Details in Drawings" under "Design-
classification system provides a structured foundation for
Related Factors" [35], while others simply label it as
analyzing the factors within each category. This categorization
"Incomplete Drawings and Specifications" without further offers a clear and organized approach to understanding the
categorization [36]. Through a comprehensive review of the
diverse factors contributing to cost overruns in construction
literature, 4,424 distinct cost overrun factors were identified
projects. By incorporating a wider range of perspectives,
and distributed across 628 categories. Among the most
including modern dimensions, such as technology and
significant studies, [27] identified 200 factors, while [37]
sustainability, the framework provides a comprehensive
identified 95 factors and grouped them into 20 categories. This
perspective that overcomes the limitations of previous studies.
observation highlights the inconsistent classifications and
Each of the 10 categories is essential for understanding the
underscores the need for a more cohesive and structured multifaceted nature of cost overruns.

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1) Execution, Resource, and Project Management Factors suppliers and subcontractors further emphasizes the need for
This category concentrates on the essential components of diligent procurement practices to avoid potential risks [46].
construction project management, guaranteeing optimal To tie all these elements together, Communication and
outcomes by aligning all aspects of execution, resource Information Management plays a pivotal role in simplifying the
allocation, and project oversight, while emphasizing the need flow of information and enhancing coordination among all
for a comprehensive approach for successful project stakeholders involved in the project [47]. Effective
completion. It integrates Project Management and Execution communication ensures that information is clear, accurate, and
Factors, Resource Management, Procurement Management, timely, reaching the appropriate parties to prevent
and Communication and Information Management into a misunderstandings and delays [48]. Information management,
cohesive framework, ensuring that all aspects of project particularly in today's construction environment, often relies on
execution are well-coordinated and effectively managed. digital tools, such as BIM, to integrate various types of project
Project Management and Execution Factors form the data into a shared digital space, supporting real-time
foundation of this category by focusing on the holistic collaboration [49]. Moreover, robust communication and
management of construction projects. This includes planning, information management systems are essential for effective
scheduling, execution, and addressing the psychological risk management, enabling the proactive identification and
aspects of management. Effective leadership, strategic resolution of potential issues that could impact project success
planning, and attention to team dynamics are essential, as they [50]. Additionally, the prevalence of remote work
directly influence the overall performance and efficiency of arrangements highlights the need for reliable and efficient
construction projects. These elements are crucial for ensuring communication platforms, underscoring the importance of
that the project remains aligned with its objectives, helping to maintaining continuous and effective information flow [51].
prevent cost overruns and delay [38]. The need to manage 2) Design and Technical Factors
timelines, address delays, ensure quality assurance, and handle
challenges, such as poor planning and improper construction This category encompasses the intricate and specialized
methods, further underscores the importance of these factors aspects of engineering, architectural design, and the integration
[3]. By establishing a strong foundation in project management, of various technical components. It focuses on the technical
these factors lay the groundwork for successful project proficiency and design solutions essential for successful project
execution [39]. execution. The technical complexities inherent in architectural
and engineering design can often lead to challenges that impact
Building on this foundation, the factors of Resource project costs directly, underscoring the necessity for thorough
Management, namely Manpower, Material, and Machinery, planning and precision in this domain [52]. The initial design
play a critical role in the efficient execution of construction phase, which develops architectural and engineering plans, is a
projects. In order to minimize waste and maximize output, key aspect of this category. Since this phase sets the foundation
effective resource management optimizes the deployment and for the entire project, errors or oversights during this stage can
productivity of the aforementioned factors [40]. Manpower lead to costly modifications at a later stage. Moreover, the
management necessitates not only strategic human resource integration of various technical systems, such as electrical,
allocation, but also a focus on workforce motivation and safety, plumbing, and HVAC, is a complex task that demands careful
which are critical for maintaining productivity and reducing the coordination and expert knowledge to ensure all systems
risk of delays [41]. Material management is substantial for function seamlessly together without necessitating expensive
ensuring timely procurement and efficient use of construction rework [53].
materials, which helps prevent shortages and logistical issues
that could lead to cost overruns [42]. Maintaining equipment, The significance of this category lies in its direct impact on
ensuring its availability, and selecting the appropriate the structural integrity, functionality, and aesthetic appeal of
machinery for specific tasks are all critical for project construction projects. It involves critical considerations, such as
efficiency [26]. These interdependent elements certify that the material selection, structural design, environmental
resources necessary for project success are available and sustainability, and adherence to building codes and standards.
effectively utilized. Each of these elements can have profound implications for the
cost and execution of a project, with potential overruns often
Procurement management, which complements resource stemming from necessary adjustments or corrections that arise
management, plays a crucial part in securing the external during the construction phase [54].
resources required for the project. This process focuses on
obtaining goods, services, and work from external sources, The role of technology, particularly BIM, is increasingly
with an emphasis on cost-effectiveness, quality, and timely recognized in this category. BIM facilitates better design
delivery [43]. By strategically sourcing and selecting suppliers coordination, conflict detection, and project visualization,
and subcontractors, procurement management ascertains that which can help reduce errors and subsequent cost overruns.
the project has access to the necessary materials and services BIM's capabilities allow for a more integrated approach to
required to meet project goals [44]. Effective procurement also construction planning and management, proving essential in
involves managing the supply chain to prevent delays and cost minimizing potential design-related issues that can affect
overruns due to material shortages or logistical issues [45]. The project costs [21]. Value engineering, a systematic method to
importance of continuous monitoring and evaluation of enhance project value through design reviews and optimization,

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 Engineering, Technology & Applied Science Research Vol. 14, No. 6, 2024, 18330-18347 18336

guarantees the achievement of project objectives at the lowest drawings are necessary for the next steps in construction and
possible cost without compromising quality or performance. fabrication processes. Addressing such issues can significantly
reduce cost overruns in construction projects.
Technical and Design Factors are critical in determining the
feasibility, safety, and success of construction projects. The 4) Consultant Factors
focus of this category on technical intricacies and design This category focuses on external advisors, their expertise,
excellence ensures that projects not only meet the desired and the quality of their guidance, which is distinct from the
specifications and functionality, but also adhere to budgetary direct management roles of contractors and project managers.
constraints, thereby mitigating the risk of cost overruns. Consultants in construction projects typically include
Factors, such as changes in specifications, ambiguous project architectural firms, engineering consultants, and specialized
designs, an incomplete design at the time of tender, inadequate advisors. Their expertise is crucial in areas, such as design,
review of drawings and other contract documents, and compliance with regulations, sustainability, and project
discrepancies between technical requirements and managerial feasibility studies. One of the primary roles of the consultants is
expectations highlight the complexity of managing technical to provide expert advice that aids in making informed
and design aspects in construction. Proper planning, effective decisions. This includes offering alternative solutions,
communication, and the use of advanced technologies are vital innovative approaches, and risk assessments. Consultants also
to addressing these challenges and ensuring project success. play a vital role in bridging the gap between the client vision
3) Contractor Factors and the practical aspects of construction, ensuring that the
project aligns with the client objectives while remaining
Contractor Factors in construction projects encompass the feasible and compliant with regulations [59].
performance, expertise, and management capabilities of
contractors, playing a pivotal role in the success and efficiency Consultants offer crucial support in areas, such as design
of construction projects. This category focuses on the selection optimization and compliance with local and international
and management of contractors, emphasizing the importance of standards, which significantly affect the project's lifecycle and
their coordination and the impact of their performance on the overall success [60]. For example, delays in providing design
overall project. The selection of competent contractors is drawings or approving shop drawings by consultants can halt
crucial as it influences every aspect of project delivery, from progress and cause scheduling conflicts, emphasizing the need
resource allocation to the final execution and quality control for timely delivery of these documents and prompt approval
[55]. The use of incompetent subcontractors can lead to processes. These professionals ensure that the project aligns
significant delays and quality issues. with the latest industry standards and practices, which can
prevent costly redesigns and modifications. Their strategic
The effectiveness of contractors is measured not only by input is instrumental in steering projects toward efficiency and
their technical expertise, but also by their capacity to manage effectiveness, particularly in complex projects that require
resources effectively, adhere to schedules, and communicate multifaceted expertise. Consultants' oversight of testing and
efficiently with other stakeholders. Factors, such as the acceptance criteria ensures that all project components meet the
contractor track record, financial stability, and their capacity to required standards before approving them for further stages.
handle the specific demands of a project, are key considerations
Not only does technical expertise measure the effectiveness of
[56]. For instance, failing to conduct a site visit during the consultants, but also their ability to communicate effectively,
bidding process can result in a lack of understanding of site coordinate with other stakeholders, and adapt to the evolving
conditions, leading to inadequate planning and unforeseen needs of the project. Their ability to foresee potential issues and
challenges during execution. Once selected, the management of provide proactive solutions can prevent costly mistakes and
contractors involves overseeing their work to ensure delays. The quality of consultancy can significantly impact the
compliance with project specifications, timelines, and quality project's overall success, influencing aspects like design
standards. Effective contractor management also includes efficiency, cost-effectiveness, and regulatory compliance [61].
fostering a collaborative environment where contractors, Furthermore, consultants are often responsible for quality
clients, and consultants work together toward common goals, control and assurance, ensuring that the project adheres to the
which enhances project coherence and reduces highest standards of quality and safety. They also contribute to
misunderstandings and disputes [57]. the project's sustainability by integrating environmentally
The coordination aspect of contractor factors is crucial, friendly practices and materials [62]. Their support in ensuring
especially in complex projects where multiple contractors may that projects are well-designed, compliant, cost-effective, and
be involved. Coordinating their activities to avoid conflicts and sustainable plays a significant role in mitigating cost overruns
ensure a seamless workflow is essential for maintaining project and enhancing the overall quality of construction projects.
schedules and budgets. Moreover, the impact of contractor
performance extends beyond the immediate scope of 5) Client Factors
construction activities. It encompasses their ability to manage Client Factors in construction projects pertain to the
unforeseen challenges, respond to changes in project scope, and influence of clients on the construction process, encompassing
maintain safety standards. The contractor's performance their decision-making processes, involvement, and
directly affects project costs, timelines, and the overall quality requirements management. This category is crucial as clients
of the finished construction [58]. Delays in providing shop are the driving force behind the project, and their actions and
drawings by contractors can slow down the project, as these decisions have a significant impact on the project's direction,

[Link] Afana et al.: Categories and Factors of Cost Overrun in Construction Projects: A Systematic Review
 Engineering, Technology & Applied Science Research Vol. 14, No. 6, 2024, 18330-18347 18337

cost, and overall success [63]. Clients play a pivotal role from stay within budget, highlighting the need for accurate
the project's inception. Their vision and requirements set the budgeting and proactive financial planning [45]. Effective
project’s objectives and scope. The clarity and stability of these financial management in construction projects starts with the
requirements are essential, as frequent changes or unclear development of a comprehensive and realistic budget. This
objectives can lead to scope creep, project delays, and cost budget must account for all potential expenses, including
overruns [64]. The client and the project team must effectively materials, labor, equipment, and contingency funds for
communicate requirements and expectations to ensure all unforeseen costs. The accuracy and thoroughness of this initial
parties align and the project goals are clear and attainable, budget are critical for project financial health [38].
which is crucial for its success.
Cash flow management is another key aspect of this
The decision-making process relevant to the clients is category. Construction projects typically involve large
another critical aspect. Timely and informed decisions are expenditures over a prolonged period and managing the inflow
necessary to keep the project on track. Delays in decision- and outflow of funds is essential to maintaining financial
making can cause project delays, whereas hasty or uninformed stability. This includes timely invoicing, efficient payment
decisions might lead to costly mistakes [65]. Client processing, and the strategic timing of expenditures. Poor cash
involvement in the project, through regular meetings and flow management can lead to project delays, halted work, or
reviews, ensures that it aligns with their vision and even project abandonment [70]. The factor of "Delayed Salary
expectations, which is crucial for maintaining momentum and Payments to Staff by the Contractor" also falls under this
avoiding unnecessary alterations that could derail progress. category, as it affects the overall cash flow and morale of the
workforce.
Moreover, the financial aspect of the client factors is
significant. The client's financial stability and promptness in Financial management in construction also includes the
funding and payments directly affect project cash flow and monitoring and controlling of costs throughout the project. This
financial health. Delays or inconsistencies in payments can involves regular financial reporting, reviewing expenditures
cause interruptions in the construction process and strain against the budget, and taking corrective actions when
relationships with contractors and suppliers [66]. Clients also necessary. Effective financial control helps to avoid cost
play a part in risk management, as their understanding and overruns and ensures that the project remains financially viable,
acceptance of project risks can influence project risk mitigation whereas a lack of proper cost management can lead to
strategies [67]. Their willingness to engage in risk-sharing unanticipated expenses and budgetary issues, such as
mechanisms can be crucial, especially in complex projects [68]. increasing resource costs. These rising costs need to be
Proper risk management and contingency planning by the client anticipated and managed within the project budget.
can help reduce unforeseen issues that might arise during the Additionally, managers' lack of cost awareness can further
construction phase. exacerbate financial mismanagement, leading to uncontrolled
expenses and inefficiencies.
6) Financial Management Factors
Financial Management Factors in construction projects The risk of insolvency is another substantial factor under
cover the financial aspects, namely budgeting, cash flow financial management, relating to the financial stability and the
management, and overall financial planning. This category is ability of stakeholders to fulfill their financial obligations. This
crucial for understanding how financial oversight and strategies risk can lead to severe cost overruns if not managed properly.
impact the economic success of a project. It is distinct from Similarly, statutory charges, such as those for planning and
cost estimation, which focuses more on predicting costs, as building permits, and insurance costs, including health
financial management involves the ongoing process of insurance, are entailed in this category because they are
managing and allocating financial resources throughout the essential financial expenses required for legal compliance and
project lifecycle [37]. Factors, such as project administration risk management.
cost increases, which often stem from changes in the project 7) Bidding and Cost Estimation Factors
scope, management inefficiencies, or unexpected demands, are
crucial considerations in financial management. In construction projects, the Bidding and Cost Estimation
Factors category concentrates on the crucial early stages of
Financial planning involves a strategic approach to the project initiation, which establish the foundation for project
project finances, encompassing risk management, investment financial success. This category encompasses the preparation of
decisions, and the securing of funding. It includes the bid documents, the evaluation and selection of contractors, and
assessment of financial risks and the implementation of the meticulous process of cost estimation, all of which are
strategies to alleviate these risks. Financial planning also essential for setting a solid foundation for project execution.
involves certifying that the project delivers value for money
and achieves its expected financial returns [69]. The The bidding process begins with the preparation of bid
opportunity costs, associated with choosing one investment or documents that detail the project specifications, scope of work,
action over another, emphasize the need for strategic financial timelines, and terms and conditions. These documents should
decisions to optimize resource allocation and manage potential be carefully prepared to avoid misunderstandings, disputes, or
financial implications. cost overruns later in the project [71]. Moreover, the
development of a fair and transparent bidding process is
Managing the financial aspects of construction projects is crucial. This process involves setting objective criteria for
essential for reducing financial risks and ensuring that projects evaluating bids and ensuring a level playing field for all

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participants. The criteria may include price, contractor costs. Understanding and navigating the legal landscape is
experience, project approach, technical capabilities, and past crucial for construction projects. This includes being aware of
performance, which in combination enhance the credibility of and adhering to local, regional, and national building codes and
the project and help in selecting the most suitable contractor standards, environmental regulations, labor laws, and safety
[15]. The selection of contractors or suppliers marks the end of standards. Non-compliance with these regulations can result in
the bidding process. This decision is based on a comprehensive legal disputes, fines, and project delays, impacting the project's
evaluation of all bids, considering the price, quality, reliability, cost and reputation [77]. Issues, such as health and safety
and suitability of each bidder for the project. The selection regulations, difficulties in obtaining work permits, and
process must be objective, transparent, and well-documented to corruption among client representatives, are also significant
ensure fairness and accountability throughout the project considerations in this category.
lifecycle [15].
Contract management is a key aspect of this category.
The integration of Cost Estimation Factors within the Contracts in construction define the scope of work, roles and
bidding phase is equally important to accurate cost estimation responsibilities, payment terms, and procedures for handling
for setting realistic budgets and evaluating bids. Cost changes and disputes. Effective contract management ensures
estimation involves predicting the total costs of the project, that all parties involved in the project understand their
including materials, labor, equipment, and overheads, thereby contractual obligations and rights. It also involves ensuring that
setting the financial foundation for the project. The accuracy of contracts are fair, clear, and enforceable and that they
these estimates influences the evaluation of bids and helps adequately protect the interests of all parties involved [78].
identify any discrepancies between the selected bid and the Factors related to ambiguous contract terms, conflicts, disputes,
consultant estimate, ensuring alignment and accuracy in project and contractual claims are integral to effective contract
budgeting [72]. management.
Cost Estimation Factors extend beyond the bidding phase, Another important element is the management of legal
serving as a fundamental process that continues to influence risks. This involves identifying potential legal issues that could
project overall success. Accurate cost estimation is crucial for arise during the course of the project and implementing
predicting the total expenses required to complete the project, strategies to mitigate these risks [79]. Legal risk management is
including direct costs, such as materials and labor, as well as essential to prevent disputes and litigation, which can be costly
indirect costs, like administrative fees, overhead, and and time-consuming [80]. The approval process for design
contingency funds. Underestimating costs can lead to budget drawings, which often involves both clients and regulatory
shortfalls, whereas overestimating can affect project feasibility authorities, is a critical aspect of legal risk management.
and competitiveness. The complexity of the project and the Regulatory compliance is also a substantial component.
available information determine the cost estimation Construction projects must comply with a wide range of
methodology, whether parametric, analogical, bottom-up, or regulations, including zoning laws, environmental protection
based on historical data. People are increasingly using standards, and workplace safety regulations. Staying informed
advanced methods like BIM to achieve more accurate and about relevant laws and regulations and ensuring compliance is
detailed cost estimations [73]. essential for the smooth execution of the project [81].
Inadequate contract duration and delays in approval of design
Additionally, it is crucial to consider risk and uncertainty in changes highlight the need for rigorous regulatory compliance
cost estimations. This involves identifying potential cost and effective communication between project stakeholders.
overrun factors and incorporating them into the estimate, either
as contingencies or through probabilistic risk analysis. 9) External Risks, Technology and Sustainability Factors
Managing these uncertainties effectively is crucial for creating The External Risks, Technology and Sustainability Factors
a realistic and resilient budget [74]. Furthermore, the accuracy category encompasses the critical external influences and
of early information and the continuous refinement of estimates technological advancements that significantly impact the
as the project progresses are essential for maintaining the success, efficiency, and sustainability of construction projects.
relevance and reliability of the project's financial planning [75]. This category highlights the intersection between external risks,
8) Contracts, Legal and Regulatory Factors such as environmental, political, and market factors, and the
adoption of cutting-edge technologies and innovative practices
Contracts, Legal, and Regulatory Factors involve that drive project success.
understanding and complying with the legal standards and
regulations that govern the construction industry. This category External Factors and Risks represent a broad range of
covers the legal framework within which construction projects elements that lie outside the direct control of the project team
operate as distinguished from the more practical aspects of but have a profound impact on the project's schedule, financial
project execution. It encompasses the legal considerations, plan, and overall success. Environmental risks, including
contractual obligations, and regulatory compliance issues that natural disasters, such as floods, earthquakes, and severe
are essential for the lawful and ethical completion of weather conditions, can cause unexpected delays and damage,
construction projects [76]. Factors, such as variations in necessitating contingency plans and adaptive construction
construction projects and delays in the approval of design methods. Additionally, the geographical and environmental
changes, fall under this category, as they involve contractual conditions of a site, namely soil quality, groundwater levels,
and regulatory processes that impact project timelines and

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and topography, can influence construction activities and lead Moreover, the risk of technical obsolescence must be managed
to additional resources or changes in design [82]. to ensure that the adopted technologies remain relevant and
effective over time. Overcoming these challenges is essential
Market conditions are another significant external factor.
for the successful integration of technology and innovation,
Fluctuations in material prices, changes in labor availability, which are critical for improving efficiency, quality, and
and broader economic trends can all impact project costs and sustainability in construction projects.
timelines. For example, a sudden increase in steel prices due to
market dynamics can significantly raise construction costs, 10) Operation and Maintenance During DLP Factors
affecting project financial viability [83]. Moreover, dependency This category concentrates on rectifying any arising defects
on imported materials and the fluctuation of resource prices during the post-construction phase. It is unique in its
introduce financial uncertainty, complicating project planning. concentration on quality assurance and maintenance
Political and regulatory factors also play a crucial part in responsibilities after project completion, setting it apart from
shaping project outcomes. Changes in government policies, the construction and planning phases. The DLP is a critical
building codes, and regulatory requirements can lead to project time when contractors are responsible for addressing any issues
delays or additional costs. For instance, new environmental that emerge in the completed construction project, ensuring that
regulations may necessitate changes in construction practices all aspects of the work meet the agreed-upon standards and
or materials, impacting both the budget and schedule [84]. specifications [90]. Typically, the DLP commences
Additionally, external organizational changes, such as slow immediately upon the completion of the construction project
responses from utility agencies or changes in project partners and its transfer to the client. The duration of this period is
can disrupt project stability and continuity. usually defined in the contract and can vary depending on the
project's size and complexity. The contractor must rectify any
Labor strikes and other social disruptions represent another defects, shrinkages, or other faults in the work during this time,
critical dimension of external risks. These disruptions directly at their own cost. The focus is on ensuring that the building or
affect manpower availability and productivity, leading to infrastructure performs as intended and meets the quality
delays and increased costs. Work stoppages due to disputes or standards set forth in the contract [91].
legal challenges can also halt progress, further complicating
project timelines and budgets. Ethical concerns, such as Effective management during the DLP involves systematic
bribery, corruption, and fraudulent practices can result in inspection and identification of defects, timely response to
increased costs, project delays, and legal complications. maintenance requests, and efficient rectification of any issues.
Moreover, theft and vandalism on construction sites cause This demands excellent communication between the client,
material losses, increased security costs, and potential project contractors, and maintenance teams. Contractors must also
delays. Inaccurate site investigations further exacerbate these handle these responsibilities with a well-organized approach,
risks by leading to unforeseen conditions, like soil issues or which includes a clear process for reporting issues, deploying
environmental hazards that disrupt the construction process and maintenance teams, and ensuring repairs meet the required
escalate costs. standards [92]. Another aspect of this category is the
documentation and tracking of maintenance and repair work
Technology and Innovation Factors are increasingly during the DLP. This ensures transparency and accountability,
important in addressing some of these external risks and providing a record of the actions taken to address any defects.
enhancing the overall productivity and sustainability of It also serves as a valuable resource for future maintenance
construction projects. The implementation of new technologies, work and can inform best practices in future projects [92].
ranging from advanced design and project management
software, like BIM, to modern construction techniques, such as B. Cost Overrun Factors
modular or prefabricated construction, offers numerous The undertaken extensive review initially identified a total
benefits. These technologies improve design accuracy and of 4,424 factors pertinent to construction project management.
enhance stakeholder collaboration [85]. Furthermore, they These factors were meticulously analyzed, and instances of
streamline project management and reduce waste, contributing duplication were systematically excluded to ensure the
to more efficient construction processes [86]. uniqueness and relevance of each factor considered.
Innovation in construction also involves the use of new Additionally, factors that were semantically similar or had
materials and building techniques that offer better performance, overlapping meanings were consolidated to prevent
sustainability, or cost-effectiveness. For instance, green redundancy. Subsequently, each factor underwent rigorous
building materials, energy-efficient systems, and smart building examination to determine whether it had been categorized by
technologies contribute to creating more sustainable and livable previous studies. This involved scrutinizing the categorization
environments [87]. The integration of digital tools and practices across various studies to identify inconsistencies in
automation, such as drones for site surveying, artificial how similar factors were classified. It was observed that
intelligence for project planning, and robotics in construction different studies often categorized similar factors under
tasks, further enhances safety, precision, and productivity [88]. different headings, as previously noted.

Despite the benefits, implementing new technologies and After comprehensive analysis and careful consideration, the
innovations also presents challenges. These include the need original list was narrowed down to 99 unique factors. These
for skilled personnel, investment in new tools and training, and factors were then classified into 10 distinct categories, ensuring
the management of change in established processes [89]. coherent and systematic organization. Figure 3 shows the

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number of factors listed under each category. For further regulatory factors on project costs, illustrating the complexities
reference, a comprehensive list of these categorized cost faced in these environments [93]. Research in India, as noted in
overrun factors can be found in the Appendix at the end of the [15], frequently addresses issues related to resource
paper. This refined categorization aims to enhance the clarity management and project delays, whereas studies in Egypt, as
and applicability of the factors in addressing cost overruns in observed in [94], focus on historical data and the evolution of
construction projects, thereby contributing to a more robust and construction practices. This underscores the critical need for
unified framework in the field. tailored strategies to manage construction costs effectively,
considering the unique challenges and conditions of each
region.
D. Project Types
The literature highlights those various types of construction
projects that experience cost overruns in distinct ways, as
outlined in Table IV. For example, building projects, such as
residential developments, high-rise buildings, and public
housing, are often prone to cost increases due to factors like
design changes, unexpected site conditions, and delays in
obtaining approvals [41]. Infrastructure projects, including
roads, highways, and transportation systems, tend to face cost
overruns caused by logistical challenges, environmental
considerations, and the complexity of coordinating multiple
Fig. 3. Number of cost overrun factors under their categories. stakeholders [93]. Large-scale public and mega construction
projects, such as sporting facilities and public infrastructure,
C. Geographical Distribution frequently encounter cost overruns due to their size, heightened
public scrutiny, and the need to comply with stringent
Previous studies have revealed a diverse geographical
regulatory standards [94]. These findings underscore the
distribution of research on construction project management.
importance of adopting tailored cost management strategies
Table III prominently features countries, like Malaysia, the
that account for the unique challenges of each project type,
UAE, Nigeria, and Iran, indicating significant research activity
offering valuable guidance for industry professionals and
in these regions. These geographical spreads highlight a keen policymakers seeking to improve financial outcomes in the
academic interest in understanding and addressing construction
construction sector.
management issues across various economic and
developmental contexts. Other regions also exhibit substantial TABLE IV. TYPE OF CONSTRUCTION PROJECT AS
scholarly attention, contributing to the global understanding of PREVIOUS STUDIES FOCUS
construction management practices. It is worth noting that 27
Type of Construction Project Mentioned
studies did not specify any country, suggesting a global Construction Projects 90
perspective or a focus on generalized theories and models Public Projects 8
applicable across different contexts. Public Projects (Buildings and Roads) 1
Buildings 8
TABLE III. FREQUENCY OF COUNTRIES MENTIONED IN Buildings (Residential) 7
PREVIOUS STUDIES Buildings (Public Sector Housing) 5
Country Mentioned Buildings (High-rise) 4
Malaysia 15 Buildings [(Educational) - (Green and Conventional) -
1 (Each)
United Arab Emirates 13 (Hospitals) - (Industrial)]
Design and Build Projects 1
Nigeria 11
Infrastructure 5
Iran 10
Egypt - India 7 Infrastructure (Roads) 5
Australia – Ghana - Trinidad and Tobago 5 Infrastructure (Transportation) 3
Indonesia - Saudi Arabia 4 Infrastructure (Highway) 2
Italy - Jordan - Norway - Oman - Qatar 3 Infrastructure [(Mega-Transport)- (Rails)] 1 (Each)
Mega Construction Projects 3
China - South Korea - Sweden - Taiwan - Turkey 2
Bahrain - Canada - Chile - Colombia - Ethiopia - Hong Mega Construction Projects (Sporting Facilities) 1
Kong - Lebanon - Libya - Mauritania - Poland - Rwanda - 1 Irrigation Projects 1
UK - USA - Vietnam
E. Stakeholders Analysis
The review of cost overruns in these countries reveals a
variety of challenges and strategies for managing project costs. Previous research on cost overruns in construction projects
For instance, research in Malaysia and the UAE often has frequently stressed the critical roles played by various
emphasizes the integration of advanced technologies and stakeholders, particularly clients, consultants, and contractors.
management practices to decrease cost overruns, reflecting These stakeholders are integral to the planning, execution, and
their rapid infrastructural development [84]. Studies in Nigeria completion phases of construction projects, and their decisions
and Iran emphasize the impact of political, economic, and and actions significantly influence project outcomes.

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Contractors are the most frequently mentioned stakeholders, groundwork for effective cost control. Future research should
with 64 mentions, underscoring their direct involvement in prioritize the bidding phase and the DLP to develop
day-to-day operations and their pivotal role in managing on-site comprehensive strategies for managing cost overruns, given
activities, according to the analysis. The analysis prominently their limited attention.
features consultants, such as project managers, designers, and
engineers, with 61 mentions, highlighting their crucial role in These findings emphasize the importance of addressing cost
project planning, design accuracy, and oversight. Clients, with overruns at each stage of the project's lifecycle to improve
55 mentions, are essential for providing project funding, setting overall project success.
objectives, and making important decisions that impact the
TABLE VI. LIFECYCLE PHASES MENTIONED IN PREVIOUS
project's direction and scope. 21 mentions emphasize the STUDIES
influence of other stakeholders, including governmental
authorities and decision-makers, on regulatory compliance and Lifecycle Phase Mentioned
Not Specified 68
policy-related aspects of construction projects. Various Phases (Including Multiple Phases, Planning,
24
Recognizing the importance of stakeholder involvement in Design, and Execution Phases)
Construction Phase (Including Construction and
the study of cost overruns, the proposed new category Decoration Stages)
15
framework places a dedicated emphasis on each of the three Pre-Construction Phase (Including Pre-Design,
primary stakeholders: consultants, clients, and contractors. By 15
Planning, Pre-Construction and Construction Phases)
creating separate categories for these key groups, the Full Lifecycle 10
framework aims to provide a more detailed and structured Design Phase 7
analysis of how each stakeholder group contributes to and can Planning and Execution Phases 2
reduce cost overruns. This approach not only recognizes the Front-End Phase (Including Significant Uncertainty
2
and Multiple Government Levels)
unique roles and responsibilities of each stakeholder, but also Project Design and Engineering Cost Estimation,
aids in pinpointing specific areas for improvement to boost 2
Contractor Selection, Project Execution, and Closeout
project efficiency and financial performance. Table V compiles Bidding Phase 1
the frequency of mentions of each stakeholder group in the Design, Construction, and Operation Phases (DBB
1
reviewed studies. Process)
Initiation and Planning Phases 1
TABLE V. STAKEHOLDER GROUPS MENTIONED IN Pre-Study Phase, Pre-Project Phase, and Requirement
1
PREVIOUS STUDIES for QA1 at the Earliest Stage of Project Development
Planning/Design Risks, Discrepancy Risks, Risks of
Stakeholder Group Mentioned Increased Production Costs, Inaccurate Cost 1
Contractors 64 Assessment
Consultants (Including Project Managers,
61
Designers, Engineers)
Clients 55 G. Factor Identification Techniques
Not Specified 38 Studies on cost overruns in construction projects have
Others (Governmental Authorities, Suppliers,
Decision-Makers, Planners, Bankers, etc.)
21 utilized a wide variety of research methods to uncover the
underlying causes and contributing factors. One of the most
used approaches is a mixed-method design, which combines
F. Lifecycle Phase Analysis quantitative surveys with qualitative interviews to offer a well-
Table VI highlights the varying focus of previous studies rounded analysis [28]. This method enables researchers to
across different phases of the project's lifecycle. Studies have collect detailed insights from different stakeholders, including
referenced multiple lifecycle phases, sometimes using different project managers, contractors, and consultants, providing a
terminology depending on the type of contract, for instance, broader understanding of the issues. Quantitative surveys, often
Design-Bid-Build, regional practices, or project type. In some utilizing Likert-scale questionnaires and factor analysis, are
cases, studies combine phases based on organizational popular for gathering data from large samples. This approach
structures or stakeholder roles. For example, the pre- facilitates statistical analysis and helps identify trends and
construction phase often includes both the planning and design patterns related to cost overruns. Furthermore, comprehensive
stages, reflecting the integrated management approach to these literature reviews are frequently conducted to synthesize
early stages. The "Not Specified" category, which appears most existing knowledge, identify research gaps, and form the basis
frequently, suggests that many studies either address broad for future empirical studies and theoretical frameworks.
concepts relevant to all phases or do not specify a particular In recent years, researchers have employed more advanced
phase. Meanwhile, studies covering the "Full Lifecycle" and techniques, such as Machine Learning (ML) models [95], data
"Various Phases" demonstrate a more holistic approach, mining [96], and fuzzy inference models [97], to predict cost
analyzing cost overruns throughout the entire project lifecycle. overruns, and analyze complex datasets. For instance,
The literature prominently features key phases like the researchers have applied real-time Hidden Markov Models
"Construction Phase" and "Pre-Construction Phase" due to their (HMM) and Dynamic Bayesian Networks (DBN) in their
significant impact on cost management. Less frequently analysis [98], and have also combined Knowledge Discovery
mentioned phases, such as the "Bidding Phase" and the (KD) with data mining techniques [96]. Artificial Neural
"Initiation and Planning Phases," are still crucial in laying the

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Networks (ANN) are another valuable tool, particularly for and flexible contract terms, is also crucial for adapting to
improving the accuracy of cost predictions [99]. changing project requirements without significant cost
implications.
Other methodologies include the Delphi technique [100],
exploratory factor analysis [101], and multi-attribute decision- The choice of mitigation methodology, whether advanced
making analysis [102]. For instance, some studies [22, 99] or classic, plays a significant role in the effectiveness of these
deployed the Delphi method to build consensus on the factors strategies. Advanced methodologies involve the integration of
contributing to cost overruns. The application of fuzzy logic predictive models and real-time data analysis to forecast
systems is another innovative methodology, as demonstrated in potential cost overruns and take corrective actions proactively.
[104]. For instance, researchers have applied the Mamdani These include using support vector machine techniques,
model as a fuzzy inference system in various cases [105]. The Bayesian network models, and other data-driven approaches to
use of software tools, like Power BI, Excel, and SPSS, along identify and manage risks dynamically. On the other hand,
with structured multi-stage research designs, enhances the classic methodologies focus on monitoring and controlling
robustness and reliability of findings. These diverse each cost overrun factor individually, employing traditional
methodologies highlight the complexity of cost overruns in project management tools and techniques. This involves
construction projects and emphasize the need for a multifaceted rigorous planning, regular progress reviews, and employing
approach to effectively address and mitigate these challenges. best practices in project management to ensure that all aspects
of the project are under control. The choice between advanced
H. Mitigation Strategies and classic mitigation methodologies will depend on the
Mitigation strategies for construction project cost overruns, specific project context and the availability of resources.
emphasize a multifaceted approach involving detailed
planning, proactive management, and the use of technological V. CONCLUSION
tools [6]. A fundamental aspect of developing effective The findings from this study highlight the critical need for a
mitigation strategies is the thorough identification of cost holistic and integrated approach to managing cost overruns in
overrun factors, which requires extensive study and analysis. construction projects. The synthesis and categorization of 99
Accurate identification of these factors paves the way for the cost overrun factors into 10 distinct categories provides a
development and implementation of targeted mitigation comprehensive framework that allows stakeholders to
measures [106]. systematically address the complex and interconnected causes
The literature highlights the development of detailed of cost overruns. These categories cover essential areas, such as
budgets and the use of accurate cost estimation methods as project management, technical and design factors, contractor
primary strategies to account for all potential expenses from the and consultant performance, client involvement, financial
outset [107]. This includes regular progress monitoring and the management, cost estimation, and external risks.
implementation of change management processes to handle The study also reveals that cost overruns are a global issue,
unexpected changes and keep projects on track. Effective with region-specific challenges that underscore the importance
communication among stakeholders and the use of advanced of localized strategies. Different regions experience unique
technology, such as BIM, are crucial for enhancing patterns of cost overruns influenced by factors, such as
coordination, reducing errors, and improving overall project economic conditions, regulatory frameworks, and cultural
outcomes [48]. These tools help visualize potential issues early practices. The analysis emphasizes the significant roles played
and allow for timely interventions [73]. by contractors, consultants, and clients, each of whom
Risk management is another critical area of focus in influences different aspects of project execution and financial
mitigating cost overruns. The literature emphasizes the early management. Contractors, with their hands-on role in daily
identification and assessment of potential risks through operations, have a direct impact on cost control and operational
methods, such as the Delphi technique, sensitivity analysis, and efficiency. Consultants offer crucial supervision and guarantee
predictive models, like HMM or DBN [68]. These approaches the fulfillment of design and technical specifications. Clients,
enable project managers to foresee potential challenges and who drive project objectives and funding, play a crucial role in
develop strategies to address them before they escalate into maintaining financial discipline and ensuring projects stay
significant cost overruns. Effective risk management entails not within budget.
only identifying and analyzing risks but also implementing The diversity of cost overrun patterns across different
contingency plans and maintaining a risk register to monitor project types and phases of the project lifecycle calls for
and control them throughout the project lifecycle [37]. tailored strategies. For example, building, infrastructure, and
Financial management and resource allocation are also mega-construction projects face unique challenges, requiring
essential components of reducing cost overruns. Frequently specific management approaches. Similarly, cost control
suggested strategies include ensuring timely payments from strategies need to be adapted to different phases of the project
clients to contractors, maintaining financial stability, and lifecycle, from design and bidding through construction and
implementing robust financial planning and control measures. post-completion.
Additionally, strategic labor management, which entails Addressing cost overruns effectively requires a balanced
employing skilled workers and providing continuous training, integration of both advanced and traditional methodologies.
is emphasized to enhance productivity and efficiency. Effective Emerging technologies, such as Machine Learning (ML), data
contract management, involving clear project goals, objectives, mining, and predictive analytics, offer valuable tools for

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proactive risk management and precise cost estimation. These G2 Design Factors
advanced techniques allow project managers to anticipate G2.1.12 Inadequate design process management and review
potential cost overruns and take corrective actions in real time. Discrepancies between technical and managerial
G2.2.13
requirements
Additionally, project managers frequently highlight BIM as a G2.3.14 Absence of contractor’s involvement in the design stage.
key tool for improving coordination, minimizing errors, and G2.4.15 Ambiguities and mistakes in specifications and drawings
enhancing project outcomes. On the other hand, classic G2.5.16 Complexity and buildability of project design
approaches like detailed planning, continuous monitoring, and G2.6.17 Design delays
efficient resource management remain essential. This involves G2.7.18 Incomplete design at the time of tender
accurate budgeting, optimal use of manpower, materials, and G2.8.19 Insufficient data collection and survey before design
machinery, and ensuring clear and consistent communication G2.9.20 Inadequate resources and experience in design development
among all stakeholders. Strong financial management, G2.10.21 Lack of accuracy in geotechnical studies
G2.11.22 Value engineering
involving precise cost estimation and effective cash flow G3 Contractor Factors
management, is critical to preventing budget overruns and G3.1.23 Subcontractor selection and competence issues
ensuring timely project delivery. Contractor not reviewing the design and making
G3.2.24
observations
VI. RECOMMENDATIONS FOR FUTURE RESEARCH G3.3.25 Contractor's work overload
Future research should prioritize identifying cost overrun Delay in preparation of shop drawings and materials
G3.4.26
samples
factors specific to different regions, countries, and building G3.5.27 Contractor inexperience and performance deficiencies
types. A localized approach will yield more precise insights, G3.6.28 Poor managerial structure of construction companies
enabling the development of tailored strategies that address the The contractor does not carry out a field visit to the site
G3.7.29
unique challenges faced in various geographic and project during the bidding process
contexts. For example, the factors driving cost overruns in G3.8.30 The contractor’s failure to observe HSE
high-rise residential buildings in densely populated urban areas G4 Consultant Factors
may differ greatly from those affecting large-scale G4.1.31 Consultant delays in inspections, and approvals
Consultant’s rejection of submittals (shop drawings,
infrastructure projects in rural regions. By focusing on these G4.2.32
equipment, and material samples)
specific contexts, researchers can formulate more effective and G4.3.33 Inadequate consultant management and supervision
targeted mitigation strategies. G4.4.34 Inflexibility (rigidity) of consultant
G5 Client Factors
In addition, future studies should explore advanced G5.1.35 Change in specifications by the owner
methodologies for mitigating cost overruns, particularly using G5.2.36 Delay to handover the site to the contractor
emerging technologies. Leveraging tools, such as ML, data G5.3.37 Owner interference
analytics, and artificial intelligence, can help predict cost G5.4.38 Poor definitions of requirement
overruns and allow project managers to take proactive steps to G5.5.39
Slow decision-making and failure in required contractual
prevent them. The integration of these technologies with BIM actions by the client
could further improve project planning, coordination, and G5.6.40 Unrealistic client expectations and timelines
G5.7.41 Work suspension by owner
execution, leading to more efficient cost control. Furthermore,
G6 Financial Management Factors
exploring blockchain technology for secure and transparent Over time work hours of supervising engineer are paid by
contract management and payment processes presents a G6.1.42
the contractor.
promising avenue for reducing financial risks and building trust G6.2.43 Delayed salary payments to staff by the contractor.
among stakeholders. G6.3.44
Inadequate financial planning and overcommitment to
inefficient strategies
APPENDIX G6.4.45 Impact of economic conditions and market changes
G6.5.46 Improper project forecasting and feasibility study
DETAILED LIST OF CATEGORIZED COST OVERRUN FACTORS G6.6.47 Insurance cost
G6.7.48 Lack of sub-contractor capabilities in financial matters
Factor Code Description Negotiation and administrative costs: Costs for handling
G1 Execution, Resource, and Project Management Factors G6.8.49
variations, claims, change orders.
G1.1.1 Inadequate risk management G6.9.50 Owner liabilities, fund shortages, and payment delays
G1.2.2 Ambiguous project scope and frequent changes G6.10.51 Remeasurement of provisional sum
G1.3.3 Improper planning, scheduling, and delays G6.11.52 Rework and its financial consequences
Project management challenges in leadership, experience, Some tendering manoeuvres by contractors, such as front-
G1.4.4 G6.12.53
and decision-making loading of rates.
G1.5.5 Improper construction methods or techniques Unavailability of incentives for contractor for finishing
G6.13.54
G1.6.6 Inadequate monitoring and control ahead of schedule or to reduce the cost.
Inadequate quality assurance, control, and conformance G6.14.55 Statutory charges: Costs for planning and building permits.
G1.7.7
management The increase of indirect costs due to extended contract
G6.15.56
Challenges in site access and services cost, project scale, duration
G1.8.8
and managing multiple projects G7 Bidding and Cost Estimation Factors
Inadequate resource management (manpower, material, and G7.1.57 Inaccurate estimation and quantity take-off
G1.9.9
machinery) G7.2.58 Discrepancies and poor bidding documents
G1.10.10 Poor procurement management and supplier issues G7.3.59 Insufficient bidding time for estimation and clarification
Inadequate management of communication, coordination, G7.4.60 Inadequate data and estimation methods
G1.11.11
and verbal instructions G7.5.61 Lack of value management and buildability consideration

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 Engineering, Technology & Applied Science Research Vol. 14, No. 6, 2024, 18330-18347 18344

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