INTERNATIONAL JOURNAL OF

PROJECT
MANAGEMENT
International Journal of Project Management 23 (2005) 538–545
www.elsevier.com/locate/ijproman

Critical determinants of construction tendering costs:

Quantity surveyorsÕ standpoint
a,*
T.M.S. Elhag , A.H. Boussabaine b, T.M.A. Ballal c

a
School of Mechanical, Aerospace and Civil Engineering, University of Manchester, P.O. Box 88, Manchester M60 1QD, UK
b
School of Architecture and Building Engineering, University of Liverpool, Liverpool L69 3BX, UK
c
School of Construction Management and Engineering, University of Reading, P.O. Box 219, Reading RG6 6AW, UK

Received 19 October 2004; received in revised form 7 December 2004; accepted 12 April 2005

Abstract

Identification of cost-determinant variables and evaluation of their degree of influence play an essential role in building reliable
cost models and enhance the competitive edge of quantity surveyors as well as contracting organisations. Sixty-seven variables
affecting pre-tender construction cost estimates are identified through literature and interviews. These factors are grouped into
six categories and a comparison analysis of their impact is conducted. Priority ranking of cost-influencing factors is carried out using
a questionnaire survey commissioned amongst quantity surveyors based in the UK. Findings of this survey indicate that there is a
strong agreement between quantity surveyors in ranking cost-influencing factors of construction projects. Comparisons between the
outcomes of this research and other related studies are presented.
Ó 2005 Elsevier Ltd and IPMA. All rights reserved.

Keywords: Cost-influencing factors; Pre-tender cost estimates; Severity index; Concordance analysis; Construction projects

1. Introduction ever, most of the significant factors affecting project costs

Cost estimation is an experience-based process. Con-
struction practitioners are aware of uncertainty, incom-
pleteness and unknown circumstances of factors
affecting construction costs. Realisation and under-
standing of cost-determinants enrich the competence
of cost estimators, and hence along with decent cost
forecasting techniques, deliver more reliable and accu-
rate cost estimates.
A wide range of cost forecasting techniques has been
exploited in the construction industry. A major limitation
of most of these models is that they only take account of
significant factors that can be readily quantified. How-
*
Corresponding author. Tel.: +44 161 3064634; fax: +44 161
3064646.
E-mail addresses: taha.elhag@manchester.ac.uk (T.M.S. Elhag),
a.h.boussabaine@liverpool.ac.uk (A.H. Boussabaine), t.ballal@
reading.ac.uk (T.M.A. Ballal).
are qualitative such as client priority on construction
time, contractorÕs planning capability, procurement
methods and market conditions including level of con-
struction activity. Due to the qualitative nature of these
factors, they are difficult to structure and quantify. De-
spite their importance, most of these factors are often ig-
nored by current forecasting techniques. Only some of
those techniques which include a risk assessment element
usually consider some qualitative factors.
A great deal of research approaches factors affecting
cost of construction projects from different angles.
Naoum [11] investigated whether the means of procure-
ment influenced project performance. The study con-
ducted a comparison analysis of project performances
for management and traditional contracting in the
UK. Project performance was measured by way of 10
factors including, unit cost of building, cost overrun
and client satisfaction with cost. A model was developed

0263-7863/$30.00 Ó 2005 Elsevier Ltd and IPMA. All rights reserved.

doi:10.1016/j.ijproman.2005.04.002
 T.M.S. Elhag et al. / International Journal of Project Management 23 (2005) 538–545
linking various project performances with different char-
acteristics of construction projects. The study concluded
that there was not enough evidence to suggest that man-
agement contracting can reduce the overall cost. Fur-
thermore, the study concluded that in order to deliver
better project performance and success, relationships be-
tween procurement methods on one hand and type of
client and project type, size, complexity and cost on
the other hand need to be realised. However, this study
fell short of investigating the underlying critical determi-
nants of unit costs of building or of factors affecting cost
overruns under each procurement scheme.
Moselhi et al. [10] developed an analogy-based model
for bidding strategy which mainly estimates an optimum
mark-up percentage and a win/lose probability. The deci-
sion support system also anticipates project profitability
in Canada and USA. The model depends on 30 attri-
butes, which significantly influence decision-making at
the tendering process stage. A detailed comparison be-
tween these attributes and cost-influencing factors reveals
that a number of attributes are highly relevant, albeit in a
different way, in the estimation of construction costs.
Okpala and Aniekwu [13] investigated causes of high
costs of construction in Nigeria. The study revealed 27
factors contributing to high costs and delays in comple-
tion time. A questionnaire survey was conducted which
included engineers, architects and quantity surveyors.
The rankings of the influencing variables by the three pro-
fessions were found to be fairly similar, despite some dif-
ferences in their views. The professionals generally agreed
that shortage of materials, methods of financing and pay-
ments for completed works and poor contract manage-
ment were the three major reasons for high construction
costs and delays. The top ranked factor was identified
as price fluctuations. The factors identified in this study
are largely influenced by the locality of the country in
which the research was conducted. As discussed later in
this section, under-developed economies tend to exert dif-
ferent influences on construction costs compared to
developed economies such as the UKÕs. This has a major
impact upon critical determinants of construction costs.
Elinwa and Buba [7] investigated construction cost fac-
tors in Nigeria. A questionnaire survey was conducted,
which involved architects, engineers and quantity survey-
ors. Thirty-one variables were assessed, and analyses of
results showed good agreement between the responses.
The top ranked factors, which contributed to construc-
tion cost, included: cost of materials, fraudulent practices
and fluctuation in prices of materials.
Some of the factors which ranked high amongst those
affecting construction costs in Nigeria [13,7], such as
fraudulent practices and fluctuation in prices of materi-
als, are not always relevant in other countries particu-
larly in the UK where there are tight control of
procurement systems, mature regulations and a stable
economy with low inflation.
539
A number of other studies investigated factors affect-
ing cost overruns. Dissanayaka and Kumaraswamy [4]
evaluated the relative influences of critical procurement
and non-procurement related factors on cost perfor-
mance in a sample of Hong Kong based building pro-
jects. Using multiple linear regression, they found that
cost overruns are influenced by; levels of client confi-
dence in the construction team, risk retained by client
for quantity variations, levels of construction complex-
ity related new technology and payment modality. These
factors were then used to develop artificial neural net-
work models for predicting cost indices.
Factors influencing construction cost overruns on
high-rise projects in Indonesia were investigated by
Kaming et al. [8]. Project managers were consulted, via
a questionnaire survey, to assess the different variables.
The identified variables were then ranked according to
their perceived importance and frequencies of occur-
rence. Using factor analysis techniques, causes of delay
and cost overrun were successfully grouped into factors
(main categories). Inflationary increases in material cost,
inaccurate material estimating and project complexity
were found to be the main causes of cost overruns. This
study relied on the judgements of project managers for
the identification of factors associated with cost over-
runs. However, no attempt had been made to consult
cost estimators or quantity surveyors who primarily deal
with costs.
This paper assesses and ranks cost-influencing fac-
tors of construction projects at the pre-tender stage
for building projects in the UK. A questionnaire meth-
odology was adopted to extract the views of a ran-
domly selected sample of quantity surveyors in the
UK. The questionnaire was sent to 218 UK quantity
surveyors and 31% response rate was achieved. In
addition, the paper describes statistical analyses of
the survey, which include severity index and KendallÕs
concordance test. The results indicate that there is a
strong agreement between quantity surveyors in rank-
ing cost-influencing factors.
2. Methodology of study
A two-stage research methodology was adopted:
First, literature survey and interviews with quantity sur-
veyors in the north of England were conducted to iden-
tify factors affecting the cost of construction projects.
These semi-structured interviews were regarded as pilot
study to adjust and modify the questionnaire manu-
script before posting it to quantity surveyors nation-
wide. Sixty-seven factors were selected; they were
grouped into six different categories:

client characteristics,

consultant and design parameters,
540 T.M.S. Elhag et al. / International Journal of Project Management 23 (2005) 538–545

contractor attributes,

project characteristics,

contract procedures and procurement methods,

external factors and market conditions.
Second, a questionnaire methodology was adopted to
evaluate and rank these factors according to their influ-
ence and significance regarding the tender cost estimates
of construction projects. The questionnaire survey was
post mailed to 218 quantity surveyors in the UK. The
mailing list was obtained from the Royal Institute of
Chartered Surveyors (RICS). The response rate for the
questionnaire survey was 31%. This response rate came
on the top range of the normal rate of 20–30% for most
postal questionnaire surveys of the construction indus-
try [1]. For assessing the degree of influence of each var-
iable a three-point scale is used as follows:
1 = (not significant),
2 = (moderately significant),
3 = (highly significant).
3. Analysis and ranking of cost factors
Severity index computation is used to rank the fac-
tors according to their significance in affecting cost. It
is illustrated by Eq. (1) below:
! ranges between ‘‘0’’ and ‘‘1’’, with ‘‘0’’ indicating no
X
3
100%
SI ¼ wi  fi  ;
i¼1
n
where i represents the ratings 1–3, fi the frequency of re-
sponses, n the total number of responses and wi the
weight for each rating (Fig. 1).
Tables 1–6 summarise the findings of statistical anal-
ysis. It shows that 52 factors maintained a severity index
between 65% and 95%. The remaining 15 factors have a
severity index in the range of 50–65%. This indicates
that out of the 67 factors identified, 52 are regarded
by quantity surveyors as highly relevant for cost fore-
casting of construction projects.
4. Measuring quantity surveyors concordance
Coefficient of variation (COV) expresses the standard
deviation as a percentage of the mean, and it is useful in
0 w1=1/3 w2=2/3
Fig. 1. Weights for each rating.
comparing relative variability of different responses [6].
Its value is computed following Eq. (2):
S
COV ¼
 100%; ð2Þ
X
where COV stands for coefficient of variation, S the
standard deviation and X
the weighted mean of sample.
Statistical results show that variation of responses
regarding factors affecting project cost is relatively
low, as indicated by the coefficient of variation. This is
a good indication and it shows a relatively high agree-
ment between quantity surveyors. This issue will widely
be analysed using KendallÕs concordance statistical tech-
nique. All 52 factors identified earlier have coefficient of
variations ranging from 10% to 40%. Relatively higher
coefficients of variation, ranging between 30% and
50%, are computed for the remaining 15 factors, Tables
1–6.
4.1. Kendall’s concordance test
The measure of the relationship between rankings of
cost factors for each category will describe the agree-
ment or concordance between the quantity surveyors
in their judgements on each category of factors.
KendallÕs coefficient of concordance (w) provides a
measure of agreement between quantity surveyors, and
concordance between rankings of cost-determinants. It
agreement and ‘‘1’’ designating perfect concordance. It
ð1Þ is illustrated by Eq. (3) as follows [16]:
12  s
w¼ 2
; ð3Þ
k  n  ðn2  1Þ
where s is the sum of squares of deviations of factors, k
the number of quantity surveyor groups, n the number
of factors in each category.
In order to undertake KendallÕs concordance test the
quantity surveyor responses were divided randomly into
three different groups. Accordingly, the six different cat-
egories of cost-determinants were then ranked sepa-
rately. SPSS software was used to carry out KendallÕs
concordance test. Table 7 depicts the statistical findings
of this analysis.
It is shown that those values of KendallÕs coefficient
(w) range between 0.88 and 0.98 for the six categories.
These high values of KendallÕs coefficient indicate strong
agreement between quantity surveyors on ranking of
factors affecting cost of construction projects. The val-
ues of significance level are computed between 0.0149
and 0.0001. These values indicate that, the null hypoth-
w3=3/3
esis: there is no agreement between quantity surveyors,
has to be rejected (p < 0.05). The alternative hypothesis
that, there is a significant agreement between quantity
surveyors, is acceptable with confidence limit p > 95%.
 T.M.S. Elhag et al. / International Journal of Project Management 23 (2005) 538–545 541

Table 1
Ranking of client characteristics
Factors Coefficient of variation Severity index Category ranking Overall ranking
Client characteristics
Type of client (public/private/developer) 24.99 80.53 4 16
Financial ability/payment record 37.32 65.73 8 53
Project finance method/appropriate funding in place on time 32.53 75.07 5 28.5
Partnering arrangements 30.61 69.80 6 41.5
Priority on construction time/deadline requirements 15.59 92.17 1 3
Experience of procuring construction 30.46 67.63 7 49
Client requirements on quality 20.39 82.87 3 11
Certainty of project brief 23.38 86.17 2 10

Table 2
Ranking of consultant and design parameters
Factors Coefficient of Severity Category Overall
variation index ranking ranking
Consultant and design parameters
Completeness and timeliness of project information (design, drawings, specifications) 15.96 91.67 2.5 4.5
Buildability of design 25.07 79.60 5 18
Working relationships with client/contractors/other design team consultants (previous/present) 24.62 75.07 7 28.5
Variation orders and additional works (magnitude, timing, interference level) 18.18 91.67 2.5 4.5
Quality of design and specifications 17.92 88.90 4 7
Inspection, testing and approval of completed works (toughness/requirements) 42.28 61.10 8 58
Submission of early proposals for costing/cost planning 28.97 76.87 6 25
Absence of alterations and late changes to design (no ‘‘design-as-we-go’’ on site philosophy) 13.34 94.43 1 1

Table 3
Ranking of contractor attributes
Factors Coefficient of Severity Category Overall
variation index ranking ranking
Contractor attributes, firmÕs ability and site management
Management team (suitability, experience, performance) 14.29 93.53 1 2
Management/labour relationships and Confidence in work force 27.09 77.80 4 22
Financial capability 32.16 72.20 6 34
Experience on similar projects 22.83 81.97 2 13
Current work load 31.98 70.50 8 40
Level of communications within the contractor organisation 30.46 67.63 10 49
Estimation method and cost control technique (accuracy and reliability) 41.56 60.80 11 59
Planning capability and level of resource deployment/utilisation/optimisation 25.37 78.43 3 20
Productivity effects (managerial, organisational, labour, technology) 34.65 71.57 7 35
% of main contractor direct work and % of subcontracted work 37.05 58.83 12.5 61.5
Number of subcontractors 37.48 54.23 15 64
Mark up policies and % (general and project wise) (special or normal conditions applied) 33.16 50.97 17 66
Record of payments to subcontractors 37.05 58.83 12.5 61.5
Previous claims record i.e., assessment of ‘‘low tender’’–‘‘high claims’’ performance 33.05 77.47 5 23
Present claims (size and quantity) 39.06 69.80 9 41.5
Accidents on sites record 51.77 48.03 18 67
Bond/warranty arrangements 44.75 58.10 14 63
CDM regulations awareness 44.19 53.33 16 65

5. Discussion of results
A comparison of average severity indices is portrayed
in Fig. 2 [5]. The top ranked category is found to be con-
sultant and design parameters with an average severity
index of 82%. On the other hand, the contractor attri-
butes group scored the least average severity index of
67%. This indicates that the quantity surveyors perceive
that the architects and designers have more influence on
construction project costs than the contractors. This
outcome is consistent with many literature views that
the project costs are more determined by decisions at
the briefing, feasibility and initial design stages rather
than by later construction stages [2,14,3]. The following
542 T.M.S. Elhag et al. / International Journal of Project Management 23 (2005) 538–545

Table 4
Ranking of project characteristics
Factors Coefficient of Severity Category Overall
variation index ranking ranking
Project characteristics
Type/function (residential, commercial, industrial, offices) 35.75 68.63 13.5 44.5
Size/gross floor area 33.15 74.53 8 30
Height/no. of stories 31.35 75.50 7 27
No. of basement levels 31.89 82.30 3 12
Level of uncertainty of soil conditions 25.11 81.37 4 14
Complexity 24.77 87.87 2 8
Type of structures (steel, concrete, brick, timber, masonry) 33.71 68.63 13.5 44.5
Location (regions/rural; urban) (inner city/outskirts) 31.99 69.63 12 43
Site conditions/site topography 25.24 76.47 6 26
Construction method/technology 25.99 71.50 9 36
Type of foundations (pile/raft/pad/etc.) 30.24 71.43 10.5 37.5
Off-site pre-fabrication 29.70 66.60 17 52
Type of cladding and external walls (brick, double glazing, etc.) 32.10 66.67 16 51
Access to site 30.24 71.43 10.5 37.5
Intensity/complexity of building services 18.68 91.20 1 6
Phasing requirements (areas to be handed over first or initial non-availability) 25.03 80.97 5 15
Quality of finishing 29.95 68.00 15 47

Table 5
Ranking of contract procedure and procurement method
Factors Coefficient of Severity Category Overall
variation index ranking ranking
Contract procedure and procurement method
Type of contract/use of standard form of contract 31.06 68.60 5 46
Tender selection method (open, selected, negotiation, single or two stage, etc.) 22.90 77.20 2 24
Payment modalities (fixed price, cost plus, BOT, PFI-DBFO, etc.) 28.77 72.53 4 32
Method of procurement (traditional, design and build, project management, etc.) 23.00 78.07 1 21
Spread of risk between construction parties (client/consultant/contractors) 32.68 73.27 3 31
Claims and disputes resolution methods (litigation/arbitration/others) 35.84 62.83 6 55
Interviewing of selected prospective contractors 37.26 61.83 7 57

Table 6
Ranking of external market conditions
Factors Coefficient of variation Severity Category Overall
index ranking ranking
External factors and market conditions
Material prices/availability/supply/quality/imports 25.17 80.00 2 17
Labour costs/availability/supply/performance/productivity 27.25 79.03 3 19
Plant costs/availability/supply/condition/performance 32.29 71.37 5 39
Weather condition 32.36 61.90 8 56
Government regulations/policies (health and safety, fire, CDM, etc.) 29.50 60.00 9 60
Level of competition and Level of construction activity 21.27 86.73 1 9
Number of bidders on competitive projects 36.82 67.63 6 49
Interest rate/inflation rate 33.69 65.70 7 54
Stability of market conditions 30.58 72.37 4 33

sections are devoted for a more detailed discussion of
statistical analysis and main findings regarding each
individual category.
5.1. Client characteristics
This category contains eight factors, Table 1. These
variables achieved high severity indices between 66%
and 92%. However, their overall ranking ranges between
3 and 53. With the exception of two variables, quantity
surveyors perceived most of these factors as not highly
significant. The category maintained coefficient of varia-
tions ranging between 15% and 37% which are relatively
low and indicate a good agreement level between respon-
dents. KendallÕs statistical analysis supports this result
even better. Table 7 shows this category maintaining a
 T.M.S. Elhag et al. / International Journal of Project Management 23 (2005) 538–545 543

Table 7
KendallÕs concordance analysis using SPSS
Category ID Degree of freedom (DF) Chi-square KendallÕs coefficient (w) Significance
Category 1 7 19.8889 0.9471 0.0058
Category 2 7 19.6734 0.9368 0.0063
Category 3 17 48.3423 0.9479 0.0001
Category 4 16 42.5310 0.8861 0.0003
Category 5 6 15.7952 0.8775 0.0149
Category 6 8 23.4667 0.9778 0.0028

100 ranked 7th overall. These types of factors are considered

90
more subjective and therefore harder, costly and time
82
80
77 75 consuming to extract as project data. However, from
71 72
67 quantity surveyorsÕ view point, they are crucial in accu-
70
severity index %

rate estimation of construction costs at the pre-tender

60
50
40
30
20
10
0 and 60%. This indicates that these variables have rela-
1 2 3 4
category
Fig. 2. Average severity indices (source: [5]).
KendallÕs coefficient of 0.95 with a significance level less
than 0.05, which indicates a very strong concordance
between the respondents.
On the top of this category is the ‘‘priority on con-
struction time’’ factor and it is ranked third on the over-
all scale. The paramount effect of the duration and
deadline requirements on project costs is widely under-
standable, and this outcome backs this view [12,9]. That
is why this factor is considered crucial and is used in
Artificial Neural Networks and regression models devel-
oped by the authors of the paper as part of this study.
The second and third ranked factors in this group are
‘‘certainty of project brief’’ and ‘‘quality requirements’’
which ranked 10th and 11th in the overall ranking,
respectively.
5.2. Consultant and design parameters
Eight factors are included in this group, Table 2.
Their severity indices range between 60% and 94%. Ken-
dallÕs coefficient of concordance computed for this cate-
gory is 0.94, with a significance level of 0.01, Table 7,
which is an indication of strong agreement amongst
quantity surveyors.
In the overall ranking of cost-influencing factors, this
category contains four of the top-10 factors. The top
ranked factors within this group include late changes
to design which is the top factor overall; variation or-
ders; timeliness of project information both of these fac-
tors ranked 4th overall; and quality of specifications,
stage.
5.3. Contractor attributes and site management
This category includes 18 factors, Table 3. Eight of
these factors achieved severity indices between 48%
5 6
tively lower degree of influence on project cost. The
remaining top-10 factors in this group gained severity
indices between 67% and 93%, which indicates their
higher importance.
The KendallÕs coefficient of concordance for this
group is computed as 0.95 with a significance level of
0.0001, Table 7. This indicates a strong agreement be-
tween quantity surveyors in the ranking of these fac-
tors. The top ranked factors in this category include
management team suitability which is ranked 2nd over-
all, experience on similar projects, and planning
capability.
5.4. Project characteristics
This category consists of 17 factors, Table 4. Their
effectiveness is demonstrated by high severity indices
ranging between 67% and 91%. The KendallÕs coefficient
of concordance for this group is computed as 0.89 with a
significance level of 0.0003, Table 7. This indicates a
strong agreement between quantity surveyors in the
ranking of these factors.
The top ranked factors in this group include project
complexity, number of basement levels, and uncer-
tainty of soil conditions. The complexity issue has al-
ready been addressed by Moselhi et al. [10] and
Shash [15] and it was considered as a key factor. A
remarkable observation in this category is the ranking
of the project size/area as eighth and its overall ranking
as 30th. This factor was also not ranked amongst the
top at the study conducted by Nkado [12], where it
was ranked as 13th out of 28 factors. An explanation
of possible reasons for this ranking is addressed in
Section 5.7.
544 T.M.S. Elhag et al. / International Journal of Project Management 23 (2005) 538–545
5.5. Contract procedure and procurement method
There are seven factors in this category, Table 5. This
group maintained severity indices between 62% and
78%. This category achieved the lowest KendallÕs coeffi-
cient of 0.88, Table 7, which still indicates high agree-
ment between respondents in the ranking of factors.
The top ranked factors in this group are the procure-
ment system which ranked 21st overall; the selection
method which ranked 24th overall; and the spread of
construction risks which ranked 31st overall. From the
statistics computed for this category, it is evident that
quantity surveyors regarded the factors contained within
the category as having little effect upon construction
estimates. This seems to support the findings of Naoum
[11] which concluded that no evidence was found to
favour the management contracting procurement system
over the traditional contracting method in reducing the
overall construction costs.
5.6. External factors and market conditions
This category contains nine factors, Table 6. The
severity indices obtained by this category are in the
range 60–87%. The majority of the factors in this group
are amongst the most insignificant variables in the over-
all ranking. There is a strong agreement between quan-
tity surveyors in ranking this group; this is due to a high
KendallÕs coefficient of 0.98 and a significance level at
0.0028, Table 7.
The top variable in this category is level of construc-
tion activity which ranked 9th overall. This is an indica-
tion that the cycles of boom and bust in the construction
industry have a clear effect on tender prices, and partic-
ularly on mark-up and profit margins.
Material prices, labour costs, and stability of market
conditions represent the remaining top ranked factors
within the group. However, according to their overall
ranking, they exert little influence in the preparation of
construction estimates.
5.7. A comparative view
Comparing the findings of this study with other re-
search projects, there are some agreements as well as
some differences in ranking the construction cost fac-
tors. For instance, inflation rate/fluctuation in materials
prices ranked very low as 54th in this study Table 6, in
contrast to Elinwa and Buba [7] Nigerian study where
it was ranked 3rd. The reason would be the difference
between the economies in the industrial and developing
countries where the inflation rate in the latter is very
high compared to the former countries. These kinds of
divergence contribute to the complexity of evaluating
the degree of influence of different factors on tender cost
estimates at diverse situations.
There was a similarity in ranking project size/area in
this study and in NkadoÕs research [12]; it was ranked as
30th out of 67 and 13th out of 28, respectively. How-
ever, project size/area is one of the most determinant
factors of project costs, and it is widely used in practice
for building cost models [2,14]. One explanation for
these findings might be that the respondentsÕ views were
based on the unit cost per area when they considered the
effects of project size on cost in these two studies,
respectively.
6. Summary and conclusions
Factors affecting costs of construction projects were
reviewed based upon research work undertaken in differ-
ent countries. The analysis and findings of these studies
varied on the one hand according to the different aims
and objectives they addressed and on the other, accord-
ing to the economic environment under which the stud-
ies were conducted.
The study presented and discussed in this paper, con-
sulted UK-based quantity surveyors via interviews and
questionnaire survey. The main aim was to evaluate
and rank cost-influencing factors of construction pro-
jects considered at the pre-tender stage. Sixty-seven vari-
ables affecting construction cost were identified through
literature and pilot interviews. These factors were
grouped into six broad categories: client characteristics;
consultant and design parameters; contractor attributes;
project characteristics; contract procedures and procure-
ment methods; external factors and market conditions.
Statistical analysis revealed that a strong agreement
between quantity surveyors existed in the ranking of
the cost factors. This was proven by high KendallÕs coef-
ficients of concordance achieved within each category
and also by low coefficients of variation for each variable.
The average severity index computed for each cate-
gory ranged between 82% and 67%. This result sug-
gested that there is no significant variation in the
ranking of each group. However, the category contain-
ing consultant and design parameters was ranked top
followed by client characteristics with four out of the
10 top factors being related to this category. The third
and forth ranks were occupied by project characteristics
and external market conditions, respectively. On the
other hand, the fifth group of factors included contract
procedures and procurement methods. The contractor
attributes group scoring the least index occupied the
bottom of the list. These findings indicated that con-
struction project costs were more affected by architects
and consultants than by contractors. This outcome is
consistent with many literature views that the project
costs are more determined by decisions at the briefing,
feasibility and initial design stages rather than by later
construction stages.
 T.M.S. Elhag et al. / International Journal of Project Management 23 (2005) 538–545
Many of the cost factors evaluated in this study do
not play a part in major databases which care for con-
struction cost analysis, e.g. Building Cost Information
Service (BCIS) of the Royal Institute of Chartered Sur-
veyors (RICS). Some of these types of variables are con-
sidered more subjective in nature and therefore harder,
costly and time consuming to be extracted as project
data. However, it would be of great benefit to quantity
surveyorsÕ practices as well as to the construction indus-
try at large and academia if for instance a body like the
BCIS could develop a performa to collect this kind of
project information.
References
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