Probability of change orders and the effect on cost and schedule for new public school buildings

Purpose

Change orders (COs) adversely affect the cost and schedule of projects, specifically during the construction phase. COs of 95 new public school building projects contracted by the Clark County School District (CCSD) of Nevada were analyzed to quantify the cost and schedule growth as well as to determine the effect of COs on cost and schedule growth. The paper aims to discuss these issues.

Design/methodology/approach

The data were collected from CCSD through questionnaire survey. Descriptive statistics and statistical tests were conducted to determine the effect of COs on cost and schedule growth.

Findings

It was found that the average amount of COs as well as cost and schedule overruns were 5.9, 3.0 and 7.4 percent, respectively. Statistical tests showed that the amount of COs had an adverse effect on schedule growth; schedule overruns in projects with less than 4 percent COs were significantly lower than projects with more than 4 percent COs. Cost overruns did not significantly differ in those two types of projects. The primary contribution of this study is that it provides the tools and the framework for school district engineers to determine the probability of the occurrence of COs as well as the optimum percentage of COs for a minimum effect on cost and schedule growth of new public school buildings. Probability curves were also developed to determine the likelihood of the occurrence of COs, cost growth and schedule growth in these projects. These findings could be used by school districts to avoid or reduce COs in future projects, minimizing the effect on cost and schedule growth during the construction phase.

Research limitations/implications

The findings and the probabilities curves developed in this study should be used carefully in other cases. These data were specific to the owner, location and types of buildings and generalizing these findings may have negative consequences.

Practical implications

The practical implications are that this study could provide a tool to school building administrators to determine the probability of having COs as well as cost and schedule overruns and the effects of COs on cost and schedule overruns. To the authors’ best knowledge, no other studies of this type have been conducted previously.

Social implications

The social implication of this study is it will help to efficiently use the tax payers’ money while building new school buildings.

Originality/value

This study has collected the hard data of COs, cost and schedule data of CCSD new school building projects. Therefore, the data are from the projects completed by CCSD. So, the paper is written from the original data received from CCSD.