Causes of Budget Changes in Building Construction Projects: An Empirical Study in Taiwan

Abstract

Most contractors pay close attention to managing costs due to the direct impacts of cost overruns on their profits. Contractors often cannot effectively control the costs of a construction project due to inaccurate budget allocation, resulting in unsuccessfully forecasting project profits or losses until the project's completion. This study analyzed three real cases and utilized a questionnaire survey to identify the main causes of budget changes in building construction projects in Taiwan. Research results reveal that “client changes,” “inaccurately estimated quantities,” and “unclear drawings and specifications” are the main causes of budget changes. These results provide not only a means of correcting the causes of inaccurate budget allocation but also a measure for project managers to review and control their project costs, which is important to a contractor during a low-profit era.

Additional information

Notes on contributors

Jyh-Bin Yang

Jyh-Bin Yang is a professor in the graduate institute of construction engineering and management at the National Central University, Taiwan. He holds project management certifications from the PMI and IPMA. He has about 200 research publications in both refereed journals as well as conferences. He is the editor-in-chief of the Construction Management Journal (in Chinese). His research interests include Project Scheduling & Delay Analysis, Procurement Performance Evaluation & Performance-Based Contract, Knowledge Management System Development, Construction Management & Project Management and Applications of AI & IT in Construction Management.

Chien-Chung Chen

Chien-Chung Chen is a manager in the department of research & development at the Chien Kuo Construction Co. Ltd., Taiwan. He received his M.S. degree in the graduate institute of construction management at the Chung Hua University, Taiwan. He has over 20 years' experience in estimating, procurement and cost control.