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Keywords
Construction industry, Cost of quality, Cost reduction, Contracts, Quality management
Abstract
Rework has become an endemic feature of the procurement process in construction, which invariably leads to time and cost overruns in projects. Thus, in order to improve the performance of projects it is necessary to identify the causes and costs of rework. The research presented in this paper quantifies the causes, magnitude and costs of rework experienced in two Australian construction projects procured using different contractual arrangements. The causes and costs of rework projects are analyzed and discussed. The case study projects' rework costs were found to be 3.15 per cent and 2.4 per cent of their contract value. Changes initiated by the client and end-user, as well as errors and omissions in contract documentation, were found to be the primary causes of rework. Recommends that construction companies and consultant firms, particularly design consultants, implement quality management practices as well as place greater attention on the design development process, to prevent rework emerging during the project's later stages.
Introduction
The Construction Industry Development Agency in Australia (CIDA, 1995) has estimated the direct cost of rework in construction to be greater than 10 per cent of project cost. Thus, if a 10 per cent rework value was applied to the annual turnover of the Australian construction industry in 1996, which was estimated at $43.5 billion per annum (DIST, 1998), then the cost of rework can be approximated at $4.3 billion per annum. The lack of attention to quality in construction has meant that quality failures have become endemic features of the construction process. In fact very few, if any, construction companies and consulting firms in Australia measure their quality costs (Love and Sohal, 2002). Consequently, it is difficult for them to prove that systems for the prevention of quality failures are costeffective. Although the direct costs of a quality system can be quantified with some accuracy (salaries, costs of documentation, audits, etc.), the corresponding benefits are far more difficult to assess. Indeed, rework has become an endemic feature of the procurement process in construction, which invariably leads to time and cost overruns in projects. To date, there has been limited research undertaken, particularly in Australia, which has attempted to determine...