MINIMIZING THE RISK OF COST OVERRUN IN BUILDING CONSTRUCTION PROJECT DURING PRE-CONTRACT STAGE
DOI:
https://doi.org/10.21837/pm.v23i39.1899Keywords:
cost overrun, pre-contract stage, risk, building construction projectAbstract
Cost overruns are a major challenge in Malaysian building construction projects, leading to delays, budget increases, and financial losses. This study investigates pre-contract factors that contribute to cost overruns and evaluates strategies to mitigate these risks. The objectives are to identify key factors, assess their impact, and determine effective mitigation strategies for stakeholders during the pre-contract stage. A quantitative approach was used, employing a structured questionnaire survey of construction firms in Selangor. Data were analyzed using descriptive and inferential statistics. The findings indicate that inaccurate cost estimation, poor planning, contractor inexperience, and financial constraints are the most significant factors influencing cost overruns. Effective strategies include careful contractor selection, risk assessment, pre-contract cost control, detailed planning, and the adoption of Building Information Modeling (BIM). The study provides practical insights for stakeholders to manage pre-contract risks, improve cost control, and enhance project outcomes. It also contributes to the literature by quantitatively validating the impact of pre-contract factors and strategies in Malaysian construction projects.
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