Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction
|dc.identifier.citation||Love, P. and Ika, L. and Ahiaga-Dagbui, D. and Locatelli, G. and Sing, M. 2018. Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction. Production Planning & Control.|
© 2019, © 2019 Informa UK Limited, trading as Taylor & Francis Group. A considerable amount of research has examined the cost performance of construction projects, yet there has been a paucity of studies that have examined the impact that client initiated change-orders and rework have on contractors. This paper seeks to add further clarity to this issue by replicating previous empirically-based research to establish the validity and reliability of the key issues influencing a contractor's cost performance. A total of 98 projects were used to examine the value of rework and change-orders and their influence on a contractor's margin. Only 65% of projects experienced a cost increase, though a mean rework cost of 0.39% of the contracted value was incurred. The difference between approved client change-orders and those by the contractor for subcontractors was 0.5% of the total costs incurred, which adversely impacted the organisation's profit. Margin losses may well have been higher as rework is seldom formally documented and reported.
|dc.publisher||Taylor & Francis|
|dc.title||Make-or-break during production: shedding light on change-orders, rework and contractors margin in construction|
|dcterms.source.title||Production Planning & Control|
|curtin.department||School of Civil and Mechanical Engineering (CME)|
|curtin.accessStatus||Fulltext not available|
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