Drivers of cost and time overruns: A client and contractor perspective

Question	Role	N	Mean	SD	F-value	p-value
OPP1: The counterpart presents misleading information to protect their interests.	Client	95	3.58	1.05
	Contractor	139	3.66	0.93	0.41	0.525
Total	234	3.63	0.98
OPP2: The counterpart promises to do things without actually doing them later.	Client	95	3.55	1.01
	Contractor	139	3.69	0.87	1.35	0.247
Total	234	3.63	0.93
OPP3: The counterpart does not always act in accordance with our contract.	Client	95	3.69	0.84
	Contractor	139	3.85	0.76	2.13	0.146
Total	234	3.79	0.80
OPP4: The contractual partner sometimes breaks informal agreements to maximize their own benefit.	Client	95	3.18	1.01
	Contractor	139	3.24	1.00	0.19	0.663
Total	234	3.21	1.00
BC1: Negotiations of financial aspects of the contract are typically difficult and lengthy.	Client	95	3.40	0.97
	Contractor	139	3.45	0.93	0.13	0.715
Total	234	3.43	0.94
BC2: When unexpected changes arise, at least one party was dissatisfied with negotiated outcomes.	Client	95	3.24	0.91
	Contractor	139	3.24	0.91	0.00	0.969
Total	234	3.24	0.91
BC3: Our negotiations with this contracting partner are usually difficult.	Client	95	3.34	0.96
	Contractor	139	3.14	0.96	2.43	0.120
Total	234	3.22	0.97
BC4: Neither party is willing to lower their demands at their own cost.	Client	95	3.44	0.73
	Contractor	139	3.49	0.72	0.24	0.623
Total	234	3.47	0.72
CC1: Information from the contractual partner is poorly formulated and difficult to understand.	Client	95	3.27	0.93
	Contractor	139	3.15	0.92	1.00	0.318
Total	234	3.20	0.92
CC2: Important information from the contractual partner seldom comes at the right time.	Client	95	3.38	0.99
	Contractor	139	3.46	0.92	0.42	0.520
Total	234	3.43	0.95
CC3: Information from the contractual partner is either incomplete or too voluminous to understand.	Client	95	3.27	0.99
	Contractor	139	3.29	0.96	0.01	0.913
Total	234	3.28	0.97
LDCO1: The counterpart’s (lack of) interpersonal skills causes change orders.	Client	95	3.13	1.08
	Contractor	139	2.71	0.98	9.24	0.003
Total	234	2.88	1.04
LDCO2: The counterpart’s (lack of) leadership skills causes change orders.	Client	95	3.18	1.03
	Contractor	139	2.87	1.03	5.03	0.026
Total	234	3.00	1.04
LDCO3: The counterpart’s lack of competence causes change orders.	Client	95	3.34	1.01
	Contractor	139	3.49	1.14	1.11	0.293
Total	234	3.43	1.09
CDCO1: Imprecise projecting of on-site conditions causes change orders.	Client	95	3.23	1.26
	Contractor	139	4.20	0.91	46.78	0.000
Total	234	3.81	1.17
CDCO2: Incomplete early-stage planning causes change orders.	Client	95	3.12	1.14
	Contractor	139	3.63	0.97	13.50	0.000
Total	234	3.42	1.07
CDCO3: Incomplete contracts cause change orders.	Client	95	2.97	1.13
CDCO3: Incomplete contracts cause change orders.	Contractor	139	3.99	0.87	60.82	0.000
Total	234	3.58	1.11
CDCO4: Poor follow-up of similar projects causes change orders.	Client	95	2.77	1.02
	Contractor	139	3.51	0.99		0.000
Total	234	3.21	1.06

[i] SD, standard deviation.

Tab. 2

Correlation between composite scores

Composite score	Mean	SD	N	(1)	(2)	(3)	(4)	(5)
1. Opportunism	3.57	0.73	234	0.79
2. Bargaining cost	3.34	0.67	234	0.39^**	0.75
3. Communication cost	3.30	0.81	234	0.41^**	0.48^**	0.82
4. Leadership drivers to change orders	3.10	0.86	234	0.26^**	0.02	0.22^**	0.82
5. Contractual drivers to change orders	3.50	0.90	234	0.10	0.17^**	0.16^*	−0.19^**	0.83

* p < 0.05,

** p < 0.01. Diagonal values are Cronbach’s alpha.

SD denotes standard deviation.

Tab. 3

Regression on leadership drivers to change orders

	Dependent variable: Leadership drivers to change orders
	All	Client	Contractor
H1a: Opportunism	0.24^***	0.18	0.24^***
H2a: Bargaining cost	−0.17^*	−0.07	−0.17^*
H3a: Communication cost	0.21^**	0.31^**	0.21^**
R-square	10.40%	18.10%	11.10%
Adj. R-square	9.20%	15.40%	9.10%

* p < 0.05;

** p < 0.01;

*** p < 0.001.

Beta-values reported.

Tab. 4

Regression on contractual drivers to change orders

	Dependent variable: Contractual drivers to change orders
	All	Client	Contractor
H1b: Opportunism	0.01	−0.09	0.04
H2b: Bargaining cost	0.12	0.37^***	−0.07
H3b: Communication cost	0.09	−0.10	0.27^**
R-square	4.00%	11.60%	6.40%
Adj. R-square	2.40%	8.70%	4.30%

* p < 0.05;

** p < 0.01;

*** p < 0.001.

Beta-values reported.

References

Authors

Metrics

Articles in this issue

DOI: https://doi.org/10.2478/otmcj-2021-0006 | Journal eISSN: 1847-6228 | Journal ISSN: 1847-5450

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Language: English

Page range: 2374 - 2382

Submitted on: May 6, 2020

Accepted on: Jan 12, 2021

Published on: May 18, 2021

Published by: University of Zagreb

In partnership with: Paradigm Publishing Services

Publication frequency: 1 issue per year

Keywords:

investment projects,

change orders,

cost and time overrun,

client–contractor differences

Related subjects:

Engineering,

Introductions and overviews,

Engineering, other

© 2021 Peter Dahlin, Ossi Pesämaa, published by University of Zagreb
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 13 (2021): Issue 1 (January 2021)