Evaluation of the cost control practices used by construction firms in Ghana
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Date
2021-07-05
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Abstract
Large sums of money have been lost in most public and non-public sectors in the
construction industry due to unsuccessful projects in relation to time and cost. Cost
overrun is intense in the developing and Sub-Saharan countries and this depicts that
Project Cost Control (PCC) is major challenge to some members handling a project and
contractors as well. Therefore, this study aimed at determining the cost control practices
used by construction firms in Ghana. In order to achieve the aim of the study, three (3)
objectives were established which were to identify the cost control practices used in the
Ghanaian construction industry, to identify the challenges associated with the cost
control practices in the Ghanaian construction industry and to identify the strategies to
improve the effectiveness of the cost control practices in the Ghanaian construction
industry. With these objectives, an extensive literature review was conducted from which
variables on sub-contractor’s risks and communication were identified. The variables
were subsequently used in the development of a structured questionnaire. The
questionnaire was distributed and fifty-nine (59) was retrieved and used for the analysis
of the study. The analysis was done using the mean score ranking and content analysis.
With the objective one, it was realized that, the most often used cost control practice is
cashflow/S-curve. Material cost variance was ranked second, followed by earned value
and overhead variance. With the second objective, it was realized that, lack of
knowledge on the use of available tools and technology occurs most in the Ghanaian
construction industry as indicated by the respondents. Usage of old methods and
concepts was ranked second followed by striving in observing various sources of regular
cost data and over emphasizing of results while ignoring the process of project cost
control. With the third objective, the respondents indicated that, construction firms
should be consistent about their approaches of controlling cost. Furthermore, the
respondents indicated that, clients and their advisors should closely monitor construction
firms to ensure they are applying any form of cost control system on their project. They
also indicated that, construction firms must properly-establish standards and protocols in
monitoring the sources of cost data that arises during the course of project execution.
Lastly, construction firms must also endeavor to educate their work personnel on the use
of some cost control systems and its applicability on site so as to ensure its ease in
adoption. Based on the findings of the study, it was recommended that, construction
firms should be consistent about their approaches of controlling cost. If managers
become consistent on the cost control processes to adopt, it becomes easier in
transferring the knowledge to others. Also, clients and their advisors should closely
monitor construction firms to ensure they are applying any form of cost control system
on their project. This can serve as a motivation for construction firms to adopt such
practices. This study was limited to D1K1 and D2K2 construction firms in the Accra
metropolis. This study was also limited to cost control practices that are used at the
construction phase of a project
Description
A dissertation submitted to the Department of Construction Technology and Management, College of Art and Built Environment in partial fulfillment of the requirement for the Degree of Master of Science.
Keywords
Cost Control, Construction Firm, Evaluation, Project, Ghana