The costs of rework: insights from construction and opportunities for learning
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© 2018, © 2018 Informa UK Limited, trading as Taylor & Francis Group. During the production of artefacts in construction, there is a likelihood for errors to be committed, which may need to be rectified so that they conform to defined contractual requirements and standards. In doing so, this initiates a process of rework, which is a problem that the industry has incessantly aimed to redress for decades with limited success. Rework is a ‘known-unknown’, but there remains a high degree of uncertainty about its costs. Such uncertainty occurs as there is a proclivity for the costs associated with rework to be largely ignored, concealed or considered to be normal function of operations. This paper presents the results from the first longitudinal and in-depth study of rework costs in construction. Based on a sample of 19,605 rework events derived from 346 construction projects delivered by a contractor between the years 2009 and 2015, it was revealed that their mean yearly profit over the period of analysis was reduced by a staggering 28%. In addition, 88 (0.45%) of the total 19,605 rework events accounted for 34% of the total costs that were incurred. The complete cost data for 98 of the 346 projects was made available, which enabled a mean rework cost of 0.39% of contract value to be determined. The research provides construction organizations with an improved understanding of the nature and likelihood of rework costs enabling them to move from a position of being a ‘known-unknown’ to becoming a ‘known-known’. Being able to ‘anticipate what might go wrong’ and ensure that risk management and controls are put in place throughout the construction process will contribute to their dynamic capability.
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Love, Peter; Sing, Michael; Wang, Xiangyu; Irani, Z.; Thwala, D. (2014)Transportation infrastructure projects are prone to cost and schedule overruns. At the time of contract award, a construction contingency budget is often used to accommodate for unplanned events such as scope changes. ...
Love, Peter; Sing, Michael (2013)Rework arises due to design errors, changes and omissions during design and has been found to contribute to 52% of a project’s cost overrun. The statistical characteristics of rework costs experienced from contract award ...
Simpeh, E.; Ndihokubwayo, R.; Love, Peter; Thwala, W. (2015)© 2015 Taylor & Francis. Statistical methods for eliciting probability distributions were used to analyse the data collected from 78 construction professionals. The empirical distributions for rework costs were found to ...