BOLA-EFE ITSEKOR

PROACTIVE COST CONTROL DURING CONSTRUCTION PROJECT

EXECUTION IN NIGERIA
BY
BOLA-EFE ITSEKOR
11H/0011/QS

SUBMITTED TO THE DEPARTMENT OF QUANTITY SURVEYING,
SCHOOL OF ENVIRONMENTAL DESIGN AND TECHNOLOGY,
FEDERAL POLYTECHNIC, NEKEDE, OWERRI,
IMO STATE.

IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF
HIGHER NATIONAL DIPLOMA (HND) IN QUANTITY SURVEYING.

SEPTEMBER, 2013.
BOLA-EFE ITSEKOR
DECLARATION
I declare that this thesis entitled PROACTIVE COST CONTROL DURING
CONSTRUCTION PROJECT EXECUTION IN NIGERIA is my original work. This
thesis has not been presented to any other institution and is not concurrently
submitted in candidature of any other degree or certificate, and that all
sources of material used for the thesis have been duly acknowledged.



BOLA-EFE ITSEKOR
11H/0011/QS






BOLA-EFE ITSEKOR
CERTIFICATION
This thesis titled PROACTIVE COST CONTROL DURING CONSTRUCTION PROJECT
EXECUTION IN NIGERIA by BOLA-EFE ITSEKOR meets the regulations and
standards governing the award of HIGHER NATIONAL DIPLOMA (HND) Certificate
in QUANTITY SURVEYING, Federal Polytechnic Nekede Owerri, Imo State
Nigeria, and it is approved for its literary presentation and contribution to
knowledge.
..
Surv. C. S Nwosu (FNIQS). Date
(Project supervisor)

..
Dr. Azubuike Oyoh (Ph.D) FRQS Date
(HOD Quantity surveying)

.. ...
External Examiner Date
BOLA-EFE ITSEKOR
DEDICATION
I specially dedicate this project work to God Almighty, the Grand Architect of
the Universe for his Love and also to my Mother Mrs. Bose A. I. for looking down
from above.













BOLA-EFE ITSEKOR
ACKNOWLEDGEMENT
The realization of this research work has comprehensively left me with a
tremendous burden of intellectual dept. For this reason therefore, I wish to
acknowledge my indebtedness to my Family and friends whose collaborative
effort has made this research work a success.
My special thanks go to my project supervisor Surv. C.S. Nwosu (FNIQS) for his
constructive criticism, correction, advice and suggestions during the course of
this work. To my Head of Department, as at the time the research work
commenced - Surv. Olusegun Ajayi and to all my lecturers who in one way or
the other contributed to my achieving this goal.
I am forever indebted to my maternal family for their moral assistance and
support during the course of my academic struggles.
Lastly, but of utmost importance, I want to say a big thank you to my Grand
Mother, Mrs. Agnes Aiyelo and my Aunty, Mrs. Remi A. Eruotor.




BOLA-EFE ITSEKOR
TABLE OF CONTENTS
Title page .. i
Dedication page ii
Certification page . iii
Dedication . iv
Acknowledgement .... v
Table of content .. vi-ix
Abstract .... x
CHAPTER ONE
1.0 Introduction 1-2
1.1 Background of the study .. 2-3
1.2 Statement of the problem ..3-4
1.3 purpose of the study .. 4
1.4 significance of the study .. 5
1.5 Scope of the Study .. 5
1.6 Research Question .. 6
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1.7 Limitation of the study ..6-7
1.8 Aim and Objectives .. 7
1.9 Definition of Terms .. 8
CHAPTER TWO (LITERATURE REVIEW)
2.0 Introduction 9
2.1 The Nigeria Construction Industry . 9-11
2.2 The Roles of Construction Actors on Construction Cost 10-11
2.3 Diverse Interest of Construction Actors on Controlling
Of Construction Cost in Nigeria 12
2.4 Concept of Cost Control Quantity Surveyors Approach13-15
2.5 Effects of Non-Adoption of an Effective Cost Control System
During Project Execution . 15-30
2.6 Causes of the Non-Adoption of an Effective Cost Control System during
Project in Nigeria ... 30
2.7 Attempts towards Embracing an Effective Cost Control System during
Project Execution 31- 41

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CHAPTER THREE (Research Methodology)
3.0 Introduction . 42-43
3.1 Research Strategy ..43-44
3.2 Research Design .. 44
3.3 Population identification .45
3.4 Study Area .. 46
3.5 Sampling Design and Procedure...46-47
3.6 Questionnaire Assumption .47
3.7 Data Collection Instrument . 48
3.8 Administration of Data collection Instrument.. 48
3.9 Statistic Tools for Data Analysis .. 49

CHAPTER FOUR (Data Analysis and Discussion)
4.1 Introduction .. 50
4.2 Questionnaire Response Rate ...50-51
4.3 Proof of Existence and Extent of Cost Overrun in Nigeria 52-53
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4.4 Factors Responsible For Cost and Time Overrun On Building Construction
Projects in Nigeria 54-56
4.5 Analysis and Discussion of Research Question One .56-57
4.6 Analysis and Discussion of Research Question Two .58-59
4.7 Analysis and Discussion of Research Question Three .59-62
4.8 Analysis and Discussion of Research Question Four. 63-64
4.5 Analysis and Discussion of Research Question Five .65-67

CHAPTER FIVE (Conclusion and Recommendations)
5.1 Conclusion ..... 70
5.2 Recommendation .. 71-77
Reference 78-79
Appendix ... 80-85



BOLA-EFE ITSEKOR
ABSTRACT
The construction industry in Nigeria at recent time is seen to be dwindling in its
contribution to the nations economy growth, due to the backdrop of both
private and public clients at embarking on construction projects as a result of
notorious/radical cost and time overruns experienced in the construction
industry which is a transition of the inability of construction actors/experts to
deliver projects in the encumbrance with the cost limit set at the pre-contract
stage.
Thus; this project work was embark on to propose a more effective means of
controlling construction cost during the period of project execution (post -
contract) rather than the much emphasized pre-contract cost control by
many scholars of which a full focus on the later still brings about the lingering
problem of cost and time overrun in the construction industry.
This study was developed and carried out to identify the effects and reasons of
not embracing an effective cost control system during project execution, the
factors responsible for cost and time overruns in Nigeria, to establish the
relationship that should exist between stakeholders in the construction industry
at achieving an effective cost control system during project execution and also
to propose recommendations at achieving a more proactive cost control system
during project execution in Nigeria.
BOLA-EFE ITSEKOR
CHAPTER ONE
1.0 Introduction
The construction industry is the tool through which physical development is
achieved, and that is truly the locomotive of the national economy. The more
resources, engineering, labor, materials, equipment, capital, and market
exchange are provided from within the national economy, the higher the factor
of the extent of self reliance. The increasing complexity of infrastructure projects
and the environment within which they are constructed place greater demand on
construction managers to deliver projects on time, within the planned budget
and with high quality (Enshassi et al 2003).
Approximately two-third of the value of fixed capital produced in this country
(Nigeria) each year emanates from the construction industry. In Nigeria, the
construction industry accounts for about 60% of the nations capital investment
and 30% of its gross domestic product (Olowo-okere, 1988).
The construction industry also generates employment opportunity which places it
second to government in employment of labour (Husseini, 1991). In a supportive
motion Nwosu 2003, started that if employees in allied industries such as
manufacturers and suppliers of construction materials and professional advisers
and administrative personnel on construction projects were to be included, the
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total number of persons employed by the construction industry will be quite
appreciable.
Employers in the construction industry embrace a wide range of interest from
local government authorities, states and federal government departments,
nationalized industries, development authorities/companies and private
individuals. Public authorities account for about one-half of the work undertaken
by the construction industry and this can have serious effect for the industry in
times of financial crisis.
A virile construction industry causes the establishment and growth of other
supportive and servicing industries e.g. paint, glazing, tile e.t.c. thus the
construction industry has a multiplier effect on the development of the nations
economy (Nwosu, 2003).
1.1 Background Of Study
From the above stated points, it is clear that the construction industry
contributes a very huge quota to the nations economy. But in recent times there
has been a great backdrop in the construction industry especially in the private
sector. Building clients are becoming much more careful at embarking on any
construction projects because of frequent occurrence of notorious cost overrun
experienced in recent time. This has brought about building clients borrowing
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more money than anticipated at the inception stage of the project. This has lead
to project being stooped half-way or totally abandoned due to the client going
bankrupt. This has been a great limiting factor in the construction industry today.
This is largely due to the reason of cost control being emphasized only during
the pre-contract stage of most projects.
On the other hand, contractors after winning award of projects are faced with
multiple risks at executing the projects because of negligence of adopting an
effective cost control system during project execution, which as lead to loss of
profit or even running at loss in carrying out the contract.
As building becoming becomes more complex and employers more exacting in
their requirements, so it becomes necessary to improve and refine the cost
control tools used. Rising prices, restrictions of the use of capital and changing
interest rates have caused employers to demand that their professional advisers
should accept cost as an element in both design and execution and that they
should ensure suitably balanced cost throughout all parts and stages of the
building as well as an accurately forecast overall cost, involving close
collaboration between the architect and quantity surveyor (Seeley, 1995a).


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1.2 Statement of the Problem
The demand for construction products of all types coupled with tight monetary
supply has provided the construction industry with a big challenge to moderate
cost of projects. The major problem in this respect has been seen in large
numbers of cost overruns in the construction. Consequently, sub sequential
increase in the cost of construction products are being observed in construction
projects of all types.
This substantial increase in cost of construction projects has brought about loss
of clients confidence in both the consultants and contractors and also has added
more investment risk thus inhibiting regular investment in the construction
industry.
All these are as a result of not embracing or the lack of knowledge of an
effective cost control system during project execution.
1.3 Purpose of the Study
The construction industry generates about two-third of the value of fixed capital
in this country (Nigeria) and this is a huge margin. The problem of cost overrun
due to lack of utilizing an effective cost control system during project execution
in various construction projects as brought about a massive backdrop of
developers and investors from vetting into the industry; thus creating great
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shortage of employment and national development. This is why the researcher
sees it fit to solve this problem that is persisting in the construction industry in
Nigeria.
1.4 Significance of the Study
Most projects manager/consultants and contractors in Nigeria find it most
difficult in controlling cost on construction projects during project execution due
to a number of problems which includes poor projection, lapse in management
and control, over budgeting, poor materials, labour shortages, increased cost of
materials, delays in deliveries, wastage of materials, unexpected weather
changes, loss of materials, insecurities and poor communication. This result to
cost and time overrun conflicts and sometimes abandonment of projects. This
study was therefore developed and carried out to identify causes of these
notorious costs and time overruns and also proffer a more effective cost control
system to the construction industry in Nigeria.
1.5 Scope of the Study
This research specifically looked at problems faced by contractors, consultants
and clients at controlling the cost of projects on site, it further propose remedies
to enhance the cost control system to be more effective. It also elucidates the
role played by the consultants and clients in controlling the cost of the project
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from exceeding its cost limit. The study is limited to projects in Owerri metropolis
of Nigeria because there is easy access of information in Owerri metropolis by
the researcher.
Target respondents for this study are the principal actors in the construction
industry namely: the Client, the Consultant and the Contractor.
1.6 Research Questions
1.) Is the construction industry today making use of an effective cost
control system during project execution?
2.) Can an effective cost control system be achieved during project
execution in Nigeria?
3.) Why is the construction industry not embracing an effective cost
control system during project execution?
4.) What are the effects of not embracing a pragmatic cost control system
during project execution?
5.) What are the various ways an effective cost control system can be
achieved during project execution?


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1.7 Limitation of the Study
On the process of carrying out this work, there are some factors that were
barriers to the researcher in doing this work has planned.
They are;
FINANCE: As a result of the economic situation, the researcher did not have
enough money which is needed to carry out the research and get to the field
properly.
CHARACTER OF RESPONDENTS: Some of the respondents felt unwilling to give
response to questions and they find it difficult to give out informations that the
researcher needed for the completion of this work.
1.8 Aim and Objectives
The aim of this research work is to provide recommendations to minimize or
avoid cost and time overrun and frequency of its occurrence through devising
keys to an effective cost control system during project execution and hence
reduce its consequential effects on the construction industry in Nigeria.
The objectives of this research are as follows;
1.) To identify the role of various stakeholders in the construction industry at
controlling cost of a project during its execution.
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2.) To identify the factors responsible for not operating an effective cost
control system during project execution thus leading to cost and time
overrun in Nigeria.
3.) To identify the effects of the non-adoption of an effective cost control
during project execution on the construction industry.
4.) To identify the various factors responsible for cost and time overruns in
the construction industry.
5.) To establish the relationship that should exist between stakeholders in the
construction industry at achieving an effective cost control system during
project execution.
1.9 Definition of Terms
PROJECT EXECUTION: In the context of this research work this term (project
execution) will depict the sequence/stage involved in which a construction
project will follow from the award of the contract to the completion. This can be
generally understood as post-contract stage.
COST OVERRUN:
a) An instance in which the provision of contracted goods or services are claimed
to require more financial resources than was originally agreed between a project
sponsor and a contractor [User Guide, 2005].
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b) The amount by which actual costs exceed the baseline or approved Costs
[Wide-man, 2002].
For the purpose of this research cost overrun is defined as the difference
between the final actual cost of a construction project at completion and the
contract amount, agreed by and between the client (the project owner) and the
contractor during signing of the contract.











BOLA-EFE ITSEKOR
CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
This chapter looks at a review of relevant literatures that give a background of
the Nigerian building construction industry, the challenge of high construction
cost, the factors affecting cost overrun and the solutions on how to minimize
cost overrun.
2.1 The Nigerian Construction Industry
In Nigeria, like most developing countries, the construction industry plays a
dominant role in the economic activities of the country. According to Olowo
Okere (1988) the construction industry accounts for about 60 percent of the
Nations capital investment and 30 percent of the Gross Domestic Product
(G.D.P)
Furthermore, the construction industry is said to have contributed about half of
the total stock of fixed capital investment in the Nigeria economy (Olaloku,
1987).The industry also generates employment opportunities which place it
second to the Government in the employment of labour (Husseini, 1991).
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When the construction industry was booming in the 1970s, the countrys
economy experienced similar effects during that period. However, from early 80s
to mid 1980s, the industry experienced a jolt and its effect was felt in all spheres
of national life (Isiadinso, 1988).
2.20 The Roles of Construction Actors on Construction cost
There are diverse interests in the construction industry. The principal interest or
actors in the construction industry are:
2.2.1 The Client
2.2.2 The Consultant
2.2.3 The Contractor
2.2.1 The Client
The Client is, by far, the single most important member of the construction team.
He is the initiator and financier of all the projects. Omole (1986) noted that the
major contribution the client can make to the successful operations of the
construction industry lies in his skill in specifying his needs prior to the
preparation of the design. It is also important for the client to set cost limits of
the project at the briefing .He should also ensure that adequate financial
provisions are made prior to the commencement of any project.
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2.2.2 The Consultant
The consultant is seen as one/establishment that safe guards the interest of the
client. Cost considerations are among the most important and basic
considerations that Consultants must deal with. It is essential to see that projects
are contained within the clients budget and cost forecasts. The Consultant has
the final control over virtually every project.
Accurate cost analysis and control is one of the necessary services the client
requires from the consultants (Omole, 1986).
2.2.3 The Contractor
Omole (1986) further reveals that the major task of Contractors is to assemble
and allocate the resources of labour, equipment and materials of the project in
order to achieve completion at maximum efficiency in terms of time, quality and
cost. He is also out to protect his own interest and make profit from execution of
the project.




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2.3 Diverse Interest of Construction Actors on Controlling Of
Construction Cost
The client is very much concerned with quality, cost and time; he wants the
building to be soundly constructed at a reasonable cost and within a specified
period of time. The term cost conveys a different meaning to the client and
contractor. While it signifies cost to the client as distinct from cost of labour,
plant and materials incurred by the contracting and subcontracting firms. Hence
it signifies the amount which the client will have to pay the contractor to
construct the building but not the actual cost to the contractor of building it.
Some confusion has arisen between the term price and cost and it has been
suggested that price should be used when describing the cost to the client and
cost when describing/dealing with contracting cost.
Cost control during execution of project can be viewed from two points;
1.) From the contractors perspective: he is to control cost of the project
effectively in-order for him to make profit.
2.) From the consultant perspective: he is to control cost effectively during
the execution of the project in-order to make sure that the cost limit is
not exceeded thus; preventing the occurrence of cost overrun.

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2.4 Concept of Cost Control
Quantity Surveyors Approach
Cost control aims at ensuring that resources are used to the best advantage with
the alternating high cost and acute shortage of funds, the majority of promoters
(developers/clients) of building works are insisting on the project being designed
and executed to give maximum value for money.
As building becomes more complex and building clients more exacting in their
requirements, so it becomes necessary to improve and refine the cost control
tools. Constantly changing prices, restrictions on the use of capital and high
interest rate have caused building clients to demand that their professional
advisers should accept cost as an element in design and that they should ensure
suitably balanced cost throughout all parts of the building, as well as an
accurately forecast overall cost despite the difficulties entailed.
Quantity surveyors are employed to an increasing extent in the construction
industry during the design stage to advice architects on the probable cost
implication of their design decisions and to assist in obtaining economical and
efficient designs (Seeley, 1995).
An RICS report: Qs 2001(1991) rightly emphasized that clients needs early and
accurate cost advice more often than not well in advice of site acquisition and of
a commitment to build. In helping to define clients requirement in financial
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terms, quantity surveyors are exerting consideration influence of any resulting
design. This requires not only knowledge of construction cost, but also
knowledge of the property market and an ability to anticipate and visualize
clients detailed requirements. During the design stage, advice is needed on
relationship with of capital costs to maintenance cost and the cost implications of
design variables and differing construction techniques (Seeley, 1996).
It should be stated clearly that though much emphases is accrued to the cost
control during the pre-contract phase of a project, this constitute a major
problem bringing about cost overrun. To ensure that the building is kept within
the agreed cost limit, an effective cost control process should be continued
throughout the construction period, especially during the post-contract period.
2.4.1 Main Aims Of Cost Control
The major mains of cost control are probably threefold;
1.) To give the employer good value for his money- A building soundly
constructed of satisfactory quality and appearance and well suitable to
perform the functions of which its required, combined with economic
construction and layout, low future maintenance and operating costs
and completed on schedule as lost time and money, and in accordance
with the agreed brief.
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2.) To achieve a balance and logical distribution of the available funds
between the various parts of the building.
3.) To keep total expenditure within the employers budget frequently
based on an approximate estimate of cost prepared by the quantity
surveyor in the early stage of the design process. (Seeley, 1998)
Majority of the factors responsible for the escalation of cost overrun of building
construction projects are largely due to the use of an in-effective cost control
technique during the project execution.
2.5 Effects of Non-Adoption of an Effective Cost Control System
during Project Execution
The effects of the non-adoption of an effective cost control system during project
execution as been seen to possess a myriad of negative influence on the
construction industry. However the researcher will attempt to discuss these
under the following headings;
1.) Cost and time overrun
2.) Lack of clients confidence reposed on consultants and contractors.
3.) Abandonment of project
4.) Bankruptcy of both client and contractors.

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2.5.1 Cost and Time Overrun
There is need for strict cost discipline throughout all stages of design and
execution to ensure that the initial estimate, tender figure and final account sum
are closely related. From all indications the construction industry has been
finding this difficult to achieve.
Cost overrun as been seen to be common in infrastructure and building
construction projects. Researchers on construction projects in some developing
countries indicate that by the time a project is completed, the actual cost would
have exceed the original contract price by 30% (Al-momani, 1996). One of the
most comprehensive studies of cost overrun that exists found out that 9 out of
10 projects had cost overruns. Overruns of 50-100% were common (Flyvberg, et
al 2003).
According to hall peter hall (1982), the Sydney opera house in Sydney sets some
kind of world record for being both time and cost overrun. Originally estimated in
1957 to cost just seven million (7,000,000.00) dollars and to be completed in
January 1963, it was in fact finished in January 1973 at a cost of one hundred
and two million (102,000,000.00) dollars. This makes the final account cost
about 15 times the original estim

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Table 2.1 Shows Projects That Exceeded Their Estimate.
S/N PROJECTS ESTIMATE(m) FINAL COST(m)
1 Sydney Opera House 2.5m 87m
2 Thames Barrier building 23m 400m
3 Barbican Arts Centre 17m 80m
4 Devonport Dockyard 21m 83m
5 Kingston Crown Resort 0.25m 1.80m
6 Channel Tunnel 4,800m 11,000m
7 DOE Trident Nuclear Base 11,000m 19,000m
Source: Seeley, 1998.
2.5.1.1 CAUSES OF COST OVERRUN
The chief cause of cost/time overrun in building construction projects in Nigeria
is due to the non-adoption of a pragmatic cost control system during project
execution. It is not enough for the architect, engineers and other members of
the design team to produce a well articulated and accurate sets of drawings of a
project and the quantity surveyor producing a well and soundly prepared bill of
quantities after which the project is awarded to a competent contractor at a price
not exceeding the cost limit that really solves the problem of cost and time
overrun. The cost control system should be such that will be able to allow for
continuity throughout the execution of the project if the cost limit is not to be
exceeded.

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Morris (1990), studied the factors influencing cost overruns in public sector
projects, he found that Escalation in costs is attributable partly to the fact that
the original estimates were prepared at the then current prices, and partly to
delays which enhance the effect of inflation and to direct escalation in costs
arising out of change in scope, errors etc. Based on certain assumptions with
regard to the pace of expenditure on projects Morris have roughly computed that
for the 133 projects which were studied only about 25 to 30% of 18 the cost
increase can be attributed to inflation. The remaining 70 to 75% has to be
explained in terms of delays, inefficiencies, scope changes, changes in statutory
levies, variations in exchange rates and to the combined effect of these factors
with inflation.
Morris (1990) mentioned ten factors that influencing cost overruns of
construction projects. These factors are: inadequate project preparation,
planning and implementation, delay in construction as the first cause of cost
overruns. The second factor was supply of raw materials and equipment by
contractors. The third one was change in the scope of the project. The fourth
factor of cost overruns was resources constraint: funds, foreign exchange,
power; associated auxiliaries not ready. The delays in decisions making by
government, failure of specific coordinating bodies was the fifth factor. The sixth
cause was wrong /inappropriate choice of site. The seventh one was technical
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incompetence and poor organizational structure. The labour unrest was the
eighth one. The ninth factor cause cost overruns was natural calamities, and the
last one was the lack of experience of technical consultants, inadequacy of
foreign collaboration agreements, monopoly of technology.
Frimpongs et al (2002) studied 26 factors that cause cost overruns in
construction of building projects in Ghana, they sent to 55 questionnaires to
owners, 40 to contractors and 30 to consultant. According to the contractors and
consultants, monthly payments difficulties from agencies was the most important
cost overruns factor, while owners ranked poor contractor management as the
most important factor. Despite some difference in viewpoint held by the three
groups surveyed, there is a high degree of agreement among them with respect
to their ranking of the factors. The overall ranking results indicates that the three
groups felt that the major factors that can cause excessive building project
overruns in developing countries are poor contractor management, monthly
payment difficulties from agencies, material procurement, poor technical
performances, escalation of material prices according to their degree of
influence.
According to Robert F. Cox, (2007), project owners identified five reasons for
project cost overruns: these reasons were, incomplete drawings, poor pre
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planning process, escalating cost of materials, lack of timely decisions and
excessive change orders.
According to Users Guide, (2005), the following are the factors that change the
cost of the construction projects through time: poor project management, design
changes, unexpected ground conditions, inflation, shortages of materials, change
in exchange rates, inappropriate contractors, funding problems and force
majeure.
In developing countries the lack of proper phasing of construction projects can
contribute to the economy to become overheated. This leads to shortage of
construction materials as the demand will exceed the supply, this in turn leads to
a climb in the cost of construction materials; this inevitably gives rise to project
cost overruns, with consequential effects on inflation and a decline on efficient
activity in the construction industry (Mansfield, Ugwu and Doran, 1994).
In the following section of this research, factors which affect the cost of a
construction project will be dealt in detail under the following headings.
Incorrect planning
Incorrect planning is one of the most important factors that affect cost of
construction. Contractors must be aware of all resources that he might need for
any project. The contractors, also, should utilize all resources in an efficient
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manner. Proper scheduling is the key to utilizing project resources, if not, the
project cost will increase.
Fraudulent practices and kick backs
This factor was the second most important factor affecting construction cost in
Nigeria as noted by Elinwa and Silas (1993). Hussein (1999) also noted that
fraudulent practices and kick backs occasioned by greed are perpetrated by
some major players in the construction industry. The perpetrators of this act in
the industry are predominantly found within the rank and file of contractors,
consultants and public clients as evident from the report published by TELL
(2002).
TELL (2002) also revealed that there were verifiable cases of corruption in the
execution of some of the contracts awarded by the Petroleum (Special) Trust
Fund (PTF). The Interim Management Committee (IMC) set up by President
Obansanjo found that of the total 181.8 billion naira that accrued to PTF for the
three years it operated, as much as 25.6 billion naira was wrongly paid to
contractors. These include inflated contracts, fraudulent over payment of
contractors by some of the agency officials and undue receipts of interest on
funds placed in banks by the agencies.

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Design Change
This problem arose from inadequate project planning and management of the
design process. A quite distinctive example is the progress of West African Gas
Pipeline (WAGP). Asamoah (2002) reported that WAGP project has suffered a
number of setbacks, culminating in the escalation of its cost from an initial US
$500 million. One of the problems includes the changing of the initial plans to lay
the pipeline offshore to an onshore configuration.
Relationship between management and labour
There is always a gap between the project management and labour. This gap
should be kept as small as possible, so that the relationship between
management and labour may be strengthened. They should work as a team to
build a project with minimum cost. If the relationship between management and
labour is bad the morale of the laborers will decrease and production will
decrease leading to increased project cost.
Contract Management
Poor contract could be attributed to the manner in which contracts are awarded.
In most cases projects are awarded to the lowest bidder (Mansfield, Ugwu and
Doran, 1994).
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Some of these low bidders may lack management skills and have less regard for
contract plans, cost control, over all site management and resource allocation. As
we know in the case of Nigeria, contracts are usually awarded to politicians and
well connected individuals irrespective of the apparent deficiencies in their
relevant delivery potentials. Accordingly, Frimpong et al (2003) observed that
most contractors in Sub Saharan African are entrepreneurs who are in the
business of making money at the expense of good Management. Consequently,
they pay low wages, submit very low bids and have very little, if any ability to
plan and coordinate contracts.
Lack of coordination between designers and contractors
Contractors construct the project according to the project design. Normally, if the
design has any mistakes, the contractors may apply the mistakes without
knowing there are mistakes or without notifying and coordinating with the
designer or the client. Implementing designs with mistakes obviously costs a lot
of money.
Cost of materials
Material price is subject to supply and demand and is affected by many other
things, including quality, quantity, time, place, buyer and seller.
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Other factors affecting material cost include: currency exchange, low or high
demand, material specification, inflation pressure and availability of new
materials in the country.
Additional Work
Additional work is related to design changes, which is due to lack of detailed
briefing on the functional and technical requirements of the projects by the
clients (Mansfield et al, 1994).
Poor Financial control on site
Controlling the project financially on site is not an easy task .All resources need
to be controlled: labour productivity, material availability, material waste, good
and effective methods, using effective tools, equipment, good project planning
and scheduling.
Project management should therefore be aware of all those factors in order to
achieve better financial control on site.
Disputes on site
Dispute is a major obstacle for any project. Normally disputes will exist if work
does not match the contract document or if work is not included in the contract
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document. Any dispute will eventually delay the project and increase project
cost.
Fluctuation of prices of materials
Omoregie and Radfort (2005) surveyed contractors, consultants and public
clients and revealed price fluctuation as the most severe cause of project cost
escalation in Nigeria. This could be attributed to the limitation in exchange rate
which in turn affects construction materials prices and the general price level.
Another factor is the unstable inflationary trend in Nigeria which is a result of
demand exceeding supply, creating a scarcity of goods which in turn leads to
escalation of the goods.
Contract procedure
The contract document is the ground rule between all parties (contractors,
consultants and clients).One part of the contract document is the contract
procedure.
The contract procedure shows the type of contract, payment procedure
constraints and regulations within the contract. The type of contract affects the
projects because of the risk involved in some types of contract(i.e. lump
sum).Unclear contract procedures will lead to disputes, project delay and cost
overrun (Fisk ,1997)
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Wrong method of estimation
This factor could be attributed to the unpredicted inflationary trend, lack of
adequate training and experience at the senior management level, and
fraudulent practices Mansfield et al (1994)
Waste on site
It seems that the little waste of construction material on site should have a very
minor effect on the total material cost. However, this minor effect can reach up
to 50 % of the total material margin of a project. So waste on site has to be
considered on tendering any project (Elinwa and Silas, 1993)
Mode of financing bonds and payments
Ogunlana et al (1996) reported that financing and payment of completed works
is responsible for cost escalation in Nigeria. Generally, contractors are sometimes
not paid in accordance with the contract conditions. There are cases where
clients fail to honour Architects certificate of payment for up to 6 months or
more whereas the contact conditions, in most cases stipulates about 28 days .
Most contractors when preparing their tenders make allowance for partial
financing of the project. They charge the clients for payments of interests and
bank charges on moneys they anticipate to borrow from the banks to finance
these projects (Omole, 1986)
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The irregular financing of public projects is a major cause of liquidity problem for
contractors: however, contractors can be paid in accordance with the contract
agreement if clients can generate the availability of adequate funds before the
project commences (Mansfield et al, 1994).
From a holistic view of all started points, it is glaring that majority of the
problems arise during the project execution stage and these could all be
controlled by the use of an effective cost control system during project
execution.
2.5.2 LACK OF CLIENTS CONFIDENCE REPOSED ON CONSULTANT
AND CONTRACTOR
The client is seen as the initiator of any construction projects and as such he is
the one that funds the project which makes him the ultimate risk bearer. He
shops for professionals/consultants whom he is confident in based on the
consultants credibility and ingenuity. The consultant with his acumen and
professionalism is to safe guard the interest of the client against over spending
and making sure that the proper quality of work is achieved at the most
economic price/tender. These and more are the consultants responsibilities to
the client and of which the client repose much confident on the consultant to
deliver his quota, which also includes sourcing for a well qualified contractor.
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When the contractor is selected, the client in-turns appropriates confident on the
contractor based on the fact that he was selected by his consultant after due
scrutiny. When the project kick-starts and the clients begins to notice certain
discrepancies from the initial agreed cost limit and designs, he starts to question
the credibility and ingenuity of both the consultant and contractor. When such
situation lingers, the client might lost the confident he had reposed on the
consultant and contractor at achieving proper completion of the project. The
client might have to call for a total overhauling of the project team in-order for
him not to go bankrupt and to achieve his plans at delivery the project.
This will lead to retrenchment of workers which will in turn escalate the
unemployment status of the country (Nigeria). And also, the client may tend to
be much more careful at embarking on any construction projects or even worst,
he will not dear to engage on any construction projects in the future.
2.5.3 ABANDONMENT OF PROJECTS
According to Nwosu (1995), project abandonment is the non-completion of any
project at any stage prior to handover; he continued that projects when
abandoned constitute an eye sore and poses considerable sensual mental and
psychological dissatisfaction and torture to the members of the public. In a
supportive motion, Akindoyemi (1986), poses that whatever the reasons for the
abandonment of project, the cost are not limited to the monetary costs of
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completion over and above the cost had the project being completed normally,
he went ahead saying that these abandoned projects are more in quantum now
than at the previous years.
When projects experience any form of acute cost overrun during its execution,
which most of the times is due to inappropriate cost control system during its
execution, the client who is the financier of the project will have no-other choice
but to abandon such project.
2.5.4 BANKRUPTCY OF BOTH CLIENT AND CONTRACTOR
According to the English dictionary; Bankruptcy is the legal inability to pay ones
debt. Insolvency is an omnibus term used to cover various forms of individual or
companies being so short of cash to affect their legal position.
It can also be seen as the inability to pay ones debts or discharging ones
liabilities. In law only individuals or partnership can become bankrupt.
Companies are said to be insolvent and such companies are put into liquidation.
According to Seeley (1996), insolvencies occurred among building contractors
amounting to more than 1500 in 1982 alone, this represented over 14% of total
liquidation in England and whales, during this period. These aroused primarily
because of wide fluctuations in the demand of building works, the existence of
many small and medium-sized firms often lacking sufficient financial expertise
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and being under-capitalized and high interest rates and restrictions on capital.
Some contractual and organizational aspects can also contribute significantly to
the occurrence of insolvencies, such as inviting excessive number of contractors
to tender for a project, the accumulation of undecided claims, excessive price
cutting by tenderers, decrease in the value of work in progress with
consequently higher proportionate overhead, delay in payments to contractors
arising from non-settlement of final accounts and non-release of retention,
undervaluation of works and over-valuation of works at the early stage of the
contract, leaving insufficient funds to complete the works. These and many more
leads to contractors going bankrupt. With a closer look at the above causes one
will notice that most of the causes stems during the project execution.
Also, this has its consequential effects on the project client and if not properly
handled, it will lead to the client becoming bankrupt also.
2.6 CAUSES OF THE NON-ADOPTION OF AN EFFECTIVE COST
CONTROL SYSTEM DURING PROJECT EXECUTION
Some of the reasons why an effective cost control system is not embraced
during project execution are briefly outlined;
1.) Lack of professional competence and knowledge on the part of the
consultant and contractor.
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2.) The non-inclusion of a competent quantity surveyor in the post-contract
stage of the project.
3.) Fraudulent practices and kick-backs (corruption)
4.) Professional negligence on the part of the project consultants.
ATTEMPTS TOWARDS AN EFFECTIVE COST CONTROL SYSTEM DURING
PROJECT EXECUTION
2.7.1. CONSULTANTS ROLE AT ACHIEVING AN EFFECTIVE COST
CONTROL SYSTEM DURING PROJECT EXECUTION
The consultants role at controlling project cost during its execution is normally
carried out by the Quantity Surveyor (PQS). Though the quantity surveyor cost
control functions under the standard forms of construction contracts has no
authority to issue instructions that would affect the cost of the project (Nisbet,
1989).
At the time the contractors starts work on the site, the quantity surveyor should
have scrutinized the priced bills, schedule of basic rates where applicable,
contract drawings, contract conditions, contractors master program, insurances
and any other relevant documents. He should at an early stage agree ground
levels with the contractor and suitable arrangements for dealing with daywork
vouchers and claims for increased costs. An accurate record of drawings should
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be supplied with all relevant cost information. The opportunity should be taken
on the occasion of site visits for measurement and interim valuations to note
matters such as labour strength, plants in use, weather conditions and causes of
delay, which subsequently have bearing on the matter of claims. Throughout the
contract period, the quantity surveyor should maintain an effective cost
arrangement by constant check on costs and by supplying cost advice to the
architect in ample time for any necessary corrective action to be taken without
adverse effects on the project (Seeley, 1996).
As stated by Seeley, 1996, the main functions of the quantity surveyor once work
as started on site is one of project financial control. It is important to ensure that
any variations, claims or extra cost does not raise the likely final account figure
above the cost limit. It is particularly necessary to monitor the financial effects of
variations and these should ideally be costed by the quantity surveyor before
they are issued. The quantity surveyor should liaise with the contractor at regular
intervals for valuation of variations, to agree measured works and to discuss any
claims submitted by the contractor and/or subcontractors. It is however the
quantity surveyors responsibility to prepare independent valuations although he
should consider any representation made by the contractor.
From the above, it is noted that it will be of paramount interest to the consultant
that an effective cost control system is operated throughout the construction
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period to ensure that the authorized cost of the project is not exceeded. When
contingencies are allowed in a project, such sum should be used only to cover
for cost of unforeseen work that could not be reasonably foreseen at the design
stage. It should not be used for design alterations, except with prior approval of
the employer/client (Seeley, 1996).
Seeley, 1996, went on to say that it is very important that the probable cost of
all variations be costed before the architect issues any variation orders, so that
their financial effects can be taken into account. Early consideration should be
given to expenditure against provisional and prime cost sums and the
contingency fund, and the examination of subcontractors and suppliers
quotations. It is advisable to carry out continuing cost studies in constructional
areas where detailed designs is in-complete, and this applies particularly to
mechanical and electrical services. Additionally, the quantity surveyor will
normally produce monthly forecast of final expenditure and predict and monitor
cash flow (Seeley, 1998).
Should any of the cost information obtained by the quantity surveyor prove
unsatisfactory, such as the possibility of final expenditure exceeding the contract
sum, urgent action must be taken to rectify the situation, working in close liaison
with other members of the design team.
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Summing up, the employer should be informed of his financial commitments and
when he will be required to make payments. The design team and in particular,
the quantity surveyor must effectively control expenditure on variations,
contingency expenditure, provisional and prime cost items set against
quotations, quality control, completion time and claims (Seeley, 1998).
The employer can reasonably expect to be supplied with the following
information;
1.) An estimate of the final account at regular intervals during the contract
period, preferably monthly.
2.) A comparison of the estimate with the total allocated financial
resources.
3.) If the comparison between the final account estimate and the resource
allocated is not favorable he will require an explanation and an
indication of remedial action.
4.) An indication of when he will be expected to pay money and
approximately in what amounts. (Nisbet, 1981).


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2.7.2. CONTRACTORS ROLE AT ACHIEVING AN EFFECTIVE COST
CONTROL SYSTEM DURING PROJECT EXECUTION
Many construction companies become insolvent through bad estimating and
planning, ineffective contract control and/or inadequate site cost control (Seeley,
1998). In-order for a contracting firm to effectively control cost of a project
during its execution, such firms must look into the following;
CASHFLOW: Cashflow may be defined as the actual movement of cash/money
in and out of a business. Within the construction organization positive Cashflow
is derived mainly from monies received through monthly payment certificates.
Negative Cashflow is related to monies expanded on a contract to pay wages,
purchase materials and plants, meet sub-contractors accounts and overheads
expended during the progress of construction. The assessment of the profitability
of a particular contract consist basically of knowing precisely the value of work
executed at a specific date, compared with the actual costs incurred in achieving
that value of work. The difference between the two figures will be the amount
available to allocate to the off-site overheads of the company, to fund its capital
and make profit. In adverse situation on the difference may show that off-site
overheads are not being covered and that no profit is being made. On a
construction project, the contractor when there is cash deficit, where cash is in
surplus, the contract is said to be self financing. (Aqua Group, 1990b).
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Cashflow problems can be reduced if an effective cost control procedure can be
operated by the contractor in respect to the matters listed;
1.) Realistic monthly assessment of preliminaries from fully document and
priced preliminaries schedules.
2.) Increased costs under contracts with fluctuations kept up to date in
monthly valuations.
3.) Variations to the contract accurately assessed and included in
valuations.
4.) Discounts and retention monies properly claimed against contractors
own nominated subcontractors and suppliers.
5.) Daywork sheets completed and cleared for monthly payments.
6.) Collection of all monies properly due to the contractor; and
7.) Ensuring that all claims for loss and expense are fully documented
properly presented and submitted as quickly as possible. (Seeley,1998)
SITE COST CONTROL: it is cost control in the context of profit or loss that is the
primary concern of the contractors quantity surveyor. In his capacity he works
closely with the site manager who is basically the controller. Monitoring
performance, comparing it against determined targets, and taking remedial
action where necessary. The factors to be controlled include the tangible physical
resources of operatives, materials, machines and subcontractors. Equally
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important are the non-tangible items such as progress and productivity (items),
cost (money), quality, safety, information, methods and the performance of sub-
ordinate management staff (Gunning, 1983).
The main sources of data available to the contractors quantity surveyor are;
1.) Contract Bills Generally firm bills of quantities ease the task of the
contractors site cost control if followed religiously.
2.) Estimates of Cost the consultant quantity surveyor will normally
regard the priced bill in terms of end products of the work. This is a
very different concept from the cost constituents in terms of labour,
materials, plant, sublet work, site establishment costs, overheads
contributions and profit that may be components of the individual rates.
3.) Method Statement The method statement prepared by construction
management will form the basis of working against which the tender
will have been completed. This statement will detail the assumption
made as how the project is to be resourced with plant and labour and
what is to be carried out by subcontractors and by direct labour.
4.) Master Programme The master programme will set out in as much
detail as possible the sequence and timing of the intended work.
(Seeley, 1998).
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During construction these four data sources will be supplemented by interim
valuations, up to date accounts of labour, plant, materials and subcontracted
works, salaries and all other site cost; and finally the programme of work
executed compared with the assumptions upon which the tender was based.
Supported by this back-up data, achievement of an effective cost value
comparison will involve the following;
1.) The calculation of the true value of work carried out on a cumulative
basis to a prescribed cut-off date.
2.) The reinstatement of the true value of the work in terms that can be
directly compared with cost.
3.) Costs are collated to the-same cut-off date as that adopted for the
statement of true value sometimes refers to as true selling value cost
will be adjusted to take account of liabilities for costs that have not yet
been recorded but against which no value of work has been taken for
costs generated against which no value of work as yet been carried
out.
(Seeley, 1998.)
Supplied with these three sets of data, it is then possible to ascertain whether
profit or loss is been made on expenditure against labour, materials, plants and
site overheads, and whether the level of contribution is better or worse than that
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upon which the tender is based. This comparison may be made in terms of the
whole project or if data in terms of both value and cost can be accurately
subdivided into construction element making the project.
The key document for monitoring the value of work in progress is the interim
valuation. The contractor will not, however, normally accept without questioning
the value certified by the employers quantity surveyor. As a check, the
contractor should prepare payment applications in considerable details. For
internal accounting purpose, the contractors application will subsequently be
adjusted by any over or under measurement. (Meopham, 1983.)
As a management tool, the contractors quantity surveyor should look for
consistent and in-consistent trends as between the value and cost of each
earned allowances month by month. If a consistent trend is observed, for
instance by regular over-spending on labour at a consistent level, then
management will endeavor to identify some underlying reason. Examples include
the all-in-labour rate being highly anticipated at the time of tender, or output
being consistently lower than the constants upon which the tender was based.
The inconsistent relationship between earned allowance and actual cost is more
likely to have been caused by an isolated event and again management should
notify the reason and obtain solution in each case. The key factor is to recognize
that there is a problem at a time sufficiently contemporary with the event to be
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able to take effective action. On the cost side of the cost value comparison, it is
essential that there is a close liaison between the contractors quantity surveyor
and site accountant on a very large contract. (Meopham, 1983.)
COST VALUE RECONCILIATION: The cost and value of variations must
continually monitor and assessed. A contractor must ensure that he has clearly
defined procedures for identifying variations and that he conforms fully with the
requirements and contract, regarding notices and the supply of supportive
informations and particulars. After interim valuations have been made, the
contractor should list all un-agreed claims, variations, daywork, re-
measurements, interest on overdue sums and any other disputed items. The
contractor should also assess the progress achieved by monitoring the value of
work carried-out against the work programme.
Accurate recording of the cost of materials, plant, labour, site staff and
overheads, and subcontractors work and claims is essential in cost value
reconciliation. A monthly reconciliation of materials delivered to site should be
made against the quantities certified in the measurement. Allowance must be
made for materials rejected, used on site but not measured as in strengthening
of temporary roads, used off-site as a minor work for adjoining landowners and
materials that are stockpiled. If the unaccounted for exceeds the estimated
wastage allowance, further investigation will be needed. Possible causes may be
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errors in measurement, additional works being performed without supporting
variation orders, or loss through unforeseen circumstances, such as excessive
penetration of granular materials into a very soft sub-base. (Seeley, 1998.)
With the regards to labour costs, site staff usually should be given the
responsibility to complete time sheets indicating the amount of time/hours
worked by each operative and the amount of bonus earned in that particular
period. Management should monitor the allocation of staff on various contracts,
and should record holidays, sickness or other reasons for absence and overtime
payments and check that staff and overhead charges are kept within the
intended budget. (Seeley, 1998.)

OVERHEADS: On a construction project a distinction should be drawn between
site overheads and company overhead. The contractor is generally reimbursed
for his site overhead by means of the contract preliminaries or sometimes by
added sums to the rates contained in the bill of quantities. Care should be taken
so that the rate of recovery of revenue to match the rate at which expenditure is
incurred on site overheads. (Seeley, 1998.)
FINANCIAL REPORTING: Contractors should sustain a good management
practice which dictates that reliable and regular financial reporting is necessary
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to control a project cost effectively and such reports should be produced ideally
on a monthly basis. A basic financial report of a contract should contain;
1.) Initial tender figure and expected profit,
2.) Forecast figures at completion for value and profit.
3.) Current payment application by the contractor.
4.) Current certified value.
5.) Adjustments to the certified valuations.
6.) Costs to date and accounting period in question.
7.) Cash received to date, retention deduced and certified sums unpaid.
(Barnett, 1992.)







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CHAPTER THREE
RESEARCH METHODOLOGY
3.0 INTRODUCTION
Sequel to the obvious problem of radical cost and time overrun experienced in
the construction industry which is largely due to the non-adoption of an effective
cost control system during project execution, this research aims at identifying the
factors responsible for these occurrence and also to proffer solutions on how the
problem of cost overrun experienced can be minimized or avoided. In achieving
the above, the following steps were followed.
1. Identification of the problem
2. Definition of the problem
3. Analysis of the problem
4. Solution to the problem.
RESTATEMENT OF THE RESEARCH AIM AND OBJECTIVES
The aim of this research work is to provide recommendations to minimize or
avoid cost and time overrun and frequency of its occurrence through devising
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keys to an effective cost control system during project execution and hence
reduce its consequential effects on the construction industry in Nigeria.
The objectives of this research are as follows;
1.) To identify the role of various stakeholders in the construction industry in
controlling cost of a project during its execution.
2.) To establish the relationship that should exist between stakeholders in the
construction industry at achieving an effective cost control system during
project execution.
3.) To identify the factors responsible for not operating an effective cost
control system during project execution thus leading to cost and time
overrun in Nigeria.
4.) To identify the effects of the non-adoption of an effective cost control
during project execution on the construction industry.
5.) To identify the various factors responsible for cost and time overruns in
the construction industry.
3.10 RESEARCH STRATEGY
Naoum (1998) defined the research strategy as the way in which the research
objectives can be questioned. Two types of research strategies are used in
studies, quantitative and qualitative research. Quantitative approach is used to
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gather factual data and to study relationships between facts and how such facts
and relationships accord with theories and the findings of any research executed
previously, but the qualitative approach seek to gain insights and to understand
people's perception of "the world" whether as individuals or groups (Fellows and
Liu, 1997). In this research, a quantitative approach is used to understand/derive
the perception of construction professionals/actors in Nigeria towards the non-
adoption of an effective cost control system during project execution thus;
bringing about time and cost overrun in construction projects in Nigeria.
3.20 RESEARCH DESIGN
"Research design" refers to the plan or organization of scientific investigation,
designing of a research study involves the development of a plan or strategy that
will guide the collection and analyses of data (Poilt and Hungler, 1985). This
research consists of six phases; the first one is the proposal for identifying and
defining the problems and establishment of the objectives of the study and
development of research plan. The second phase of the research includes
literature review. Literatures of cost control procedures during project execution
and of time and cost overruns were reviewed. The third phase of the research
included a field survey which included the firms of
Building clients, contractors and consultants, also some actual cases were
collected during the field survey. The fourth phase of the research includes the
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questionnaire design and distribution. The questionnaire was used to collect the
required data in order to achieve the research objectives. The fifth phase of the
research focused on data analysis and presentation/discussion. The sixth and last
phase of the research includes the conclusion and recommendation.
3.30 POPULATION IDENTIFICATION
Population as defined by Best and Kahn (1986) is any group of individuals that
have one or more characteristics in common that
Are of interest to the researcher .The population may be all the Individuals of a
particular type or more restricted part of that group.
The population identified for this research work includes some professionals of
the building team, consulting and contracting firms.
The population selection was based on the assumptions.
(i) The contracting firms should have experienced and reputable
professionals and clients in their operating status respectively.
(ii) The consulting companies must have fully registered and experience
professionals as their staff with reasonable year of experience in the
construction industry.

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3.40 STUDY AREA
The study area for this research is based in Owerri, Imo state. The choice of
Owerri as the study area is because since the inception of the new administration
led by His Excellency Governor Rochas Owelle Anayo Okorocha, in 2011, the
state has had all types of construction projects with most of them experiencing
cost overrun. Imo state also enjoys the benefits of being the fulcrum of the
eastern part of Nigeria. Owerri city is a relatively built up environment with
many infrastructures like roads, bridges, estates ,government establishments, all
kinds of private and public developments, schools, hospitals, theaters, cinemas,
shopping malls to mention a few. All these infrastructures are the handiwork of
construction experts (consulting and contracting firms) in display all-over the
state, thus enabling the massive presence of reputable construction professionals
in the city. As such there cannot be a better place to obtain data for this study.
3.50 SAMPLING DESIGN AND PROCEDURES
Having identified clients, consultants and contractors as the target groups for the
effective conduct of this research, seventy respondents comprising of sixteen
clients, twenty two consultants and thirty two contractors were randomly
selected using stratified random sampling technique as a type of probability
sampling in order to give everyone that falls into any of these identified target
groups equal and independent chance of being included in the sample.
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3.60 QUESTIONNAIRE ASSUMPTION
The questionnaire is perhaps the most popular instrument used in the data
gathering process in conducting researchers.
In the course of doing this, some assumptions were taken as standard to the
method. The use of this instrument for the collection of our data therefore,
becomes understandable.
These include:
(i) That questionnaire method tends to give security to information and
to the respondents; also it is the fastest and one of the most
accurate and economical means of gathering information for a
research of the type.
(ii) That because the questions are short and precise, it would not take
much of the respondents time.
(iii) That the respondents would answer the questions correctly and
accurately.


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3.70 DATA COLLECTION INSTRUMENT
Two sets of data were identified as being relevant to the effective conduct of this
research namely primary and secondary. The primary data which refers to field
data were obtained through the use of well structured questionnaire developed
from the initial identification of likely factors responsible for the non-adoption of
a pragmatic cost control system during project execution in Nigeria and solutions
to minimizing same.
The questionnaire was designed to elicit information on the following:
(a) The respondents role in construction
(b) The respondents professional background
(c) How long the respondents have been in construction.

Secondary data through the review of various relevant literatures were also
used in the course of carrying out the research.
3.80 ADMINISTRATION OF THE DATA COLLECTION INSTRUMENT
The questionnaires were first validated by my supervisor before its
administration. The administration of the questionnaire was done by hand to the
various target groups.


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3.90 STATISTICAL TOOLS FOR DATA ANALYSIS
The descriptive survey method was used, where seventy well structured
questionnaires were distributed among the principal actors in the construction
industry namely: the client, the consultant and the contractor. Frequency and
percentages were used for the descriptive data. Coded broad sheets were
thereafter used for extracting data from the returned questionnaires. These were
analyzed by SPSS (Statistical Package for Social Science) having carefully
completed the variable view and imputed the extracted data appropriately on the
data viewed.









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CHAPTER FOUR
DATA ANALYSIS AND DISCUSSION
4.1. INTRODUCTION
This part of the research deals with the analysis and discussion of the data
gathered from the desk study and questionnaire survey.
The procedure used in analyzing the results was aimed at establishing the
relative effects and factors responsible for not adopting an effective cost control
system during project execution. The questionnaire gave each respondent an
opportunity to identify the factor that was likely to cause cost overrun by giving
the response True, False, Yes, No , and in some cases giving their opinion
liberally.
From the desk study a variety of completed public/private building construction
projects throughout Nigeria were surveyed. During the desk study all the
documents of each project such as correspondence letters, project report,
payment certificate, the contract amount, contract time during signing of the
contract and actual completion time of the project were thoroughly investigated.


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4.2. QUESTIONNAIRE RESPONSE RATE
Detailed questionnaires were designed and distributed for the assessment of the
causes and effects of the non-adoption of an effective cost control system during
project execution in Nigeria, for this purpose the questionnaires were distributed
to major stakeholders in the construction industry; these are Contractors,
Consultants and Clients (project owners). To make the analysis more
comprehensive a total of 70 questionnaires were distributed to consultants,
contractors and clients (project owners) out of which 50 questionnaires were
filled and returned. Table 4.1 below shows the number of questionnaires
distributed to clients, consultants and contractors and the number of
questionnaires returned from these stakeholders including their percentage
response rate.
Table 4.1: Summary of Number and Percentage of Questionnaires Distributed
and Returned; and Response Rate.

NO

RESPONDENTS
QUESTIONNAIRE
DISTRIBUTED
NO (%)
QUESTIONNAIRE
RECEIVED
NO (%)
RESPONSE
RATE
(%)
1 CLIENTS 16 22.857 10 20 14.286
2 CONSULTANTS 22 31.429 15 30 21.429
3 CONTRACTORS 32 45.714 25 50 35.714
TOTAL/AVERAGE 70 100 50 100 71.429

BOLA-EFE ITSEKOR
4.3. PROOF OF EXISTENCE AND EXTENT OF COST OVERRUN
The first step in this research is to check whether cost overrun in building
construction projects in Nigeria had been found existent or not. On the basis of
data gathered from the desk study, out of 70 building construction projects
investigated 67, (95.7%), building projects suffered cost overrun. From this
result, the number of construction projects that suffered cost overrun in Nigeria
are more than the number of projects that suffered cost overrun in other
countries, as indicated in the literature review part of this thesis Flyvbjerg, et al,
(2003), found that 9 out of 10 projects experienced cost overrun.
The total cost overrun ranges from the minimum amount of 0% to the
maximum amount of 126% of the contract amount for individual projects; and
the mean rate of cost overrun was found to be about 15.14% of the contract
amount.





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Table 4.2: Below shows the types of building projects, contract amount, actual
cost at completion and rate of cost overrun.
S/n Project
No. Of
projects
Sum of contract
cost x 10
4

(naira)
Sum of contract
cost @ completion
x 10
4
(naira)
Sum of cost
overrun x 10
4

(naira)
Cost
overrun
(%)

1

Educational
Buildings.

29


579,654.49


631,703.16

52,048.67


8.98

2

Office
Buildings


15


81,602.00


93,714.40

12,112.40


14.84

3

Residential
Buildings


10

149,574.00


171,906.75

22,332.75


14.93
4
Health
Buildings


9

85,096.00


124,867.04


39,771.04


46.74

5
Industrial
Buildings


4


68,705.00

85,219.42


16,514.42


24.04
6
Others


3
21,786.00

28,309.60

6,523.60 29.94


Total/Mean

70.00 986,417.49 1,135,720.36 149,302.88 15.14
Source: various
From the above Table 4.2, it can be seen that the rate of cost overrun has
significant variations for the different types of building construction projects.
From the desk study it was found that educational buildings projects have the
lowest rate of cost overrun with 8.98% of the contract amount. Which means
educational building projects required an additional cost of 8.98% to accomplish
BOLA-EFE ITSEKOR
the project. The reasons for rate of cost overrun to be relatively low in these
projects is that, for educational projects the type of buildings that are being built
are similar in architectural, structural, electrical, and sanitary designs for different
locations, hence scope of the works in these building projects are known very
well and the change orders/variations are minimal, if any. The cost overruns in
these projects are most of the time due to inadequate cost control during project
execution, increase in the cost of construction materials and due to unexpected
or unforeseeable ground conditions, etc... Health buildings have the highest rate
of cost overrun with 46.74% of the initial contract amount. Which means health
buildings required an additional cost of 46.74% to accomplish the project.
4.4. FACTORS RESPONSIBLE FOR COST AND TIME OVERRUN ON
BUILDING CONSTRUCTION PROJECTS IN NIGERIA.
In an attempt to analyze this, one question (question 6) was formulated on the
questionnaire and the results obtained are analyzed below;

Question 6 the following have been investigated to be the major factors
responsible for construction cost overrun in Nigeria. As a participant in the
construction industry what in your opinion is the most responsible factor for the
occurrence of cost/time overrun
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Table 4.3: Identification of the main factors responsible for cost/time overrun in
Nigeria.
FACTORS CLIENT CONSULT CONTR. AGGREG. %
Poor Financial control on site 6 2 10 18 36
Increase of prices of Materials and Labour Nil 2 6 8 16
Wrong method of Estimation 2 Nil 2 4 8
Wastage on site 1 Nil Nil 1 2
Lack of Co-ordination between consultant and
contractor.

1

4

4

9

18
Variations/design Change Nil 6 3 9 18
Others Nil 1 Nil 1 2
TOTAL 10 15 25 50 100

DISCUSSION
Table 4.3 shows that poor financial control on site with 36% mean score is the
chief factor responsible for construction and time overrun in Nigeria, responses
from the client and contractor both ranked this as the most severe factor while
the consultant ranked variations/design changes as the number one. Lack of co-
ordination between consultant and contractor during project execution and
variations/design changes both with 18% mean score ranked second as the most
responsible factor causing cost and time overrun.
Increase in prices of materials and labour during project execution was ranked
third with 16% mean score, contractors sees this factor as the second most
BOLA-EFE ITSEKOR
responsible factor/cause of cost/time overrun while clients and consultants sees
it as the third most responsible factor.
Wastage on site and other factors specified by the responders as Kick
backs/corruption and government policies ranked fourth with 2% mean score
each.
It can be concluded from the results obtained from the analysis on table 4.3 that
the major causes of cost and time overrun all arises during project execution on
site and if proactive efforts are taken during this stage it can help to minimize or
totally rule out the occurrence of cost and time overrun on building construction
projects in Nigeria. Thus the Need of Adopting an Effective Cost Control System
during Project Execution becomes eminent.
4.5. ANALYSIS AND DISCUSSION OF RESEARCH QUESTION ONE
RESEARCH QUESTION 1 is the construction industry making use of an Effective
Cost Control System during Project Execution?
On attempting to analyze the above question, one question was formulated
(question 1) on the questionnaire to gather response from the research
population as stated on chapter three.
Question 1 is the construction industry making use of a Pragmatic/Effective
Cost Control System during Project Execution in Nigeria presently?
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Table 4.4. The responses from the received questionnaire are analyzed below;
RESPONSES CLIENT CONSULTANT CONTRACTOR AGGREGATE %
YES 2 5 4 11 22
NO 8 10 20 38 76
UNDECIDED Nil Nil 1 1 2
TOTAL 10 15 25 50 100

DISCUSSION OF RESEARCH QUESTION ONE
From the results obtained above, it shows that majority of construction actors in
Nigeria are not satisfied with what is obtainable in the construction industry in
Nigeria as regards to the system of Cost Control used during Project Execution.
22% of respondents comprising of 2 clients, 5 consultants and 4 contractors
arriving at 11 aggregate responses replied YES to the question of being
satisfied while 76% comprising of 8 clients, 10 consultants and 20 contractors
arriving at 38 aggregate responses replied NO to the question. Only two
percent (2%) replied Undecided consisting of only one (1) client.
From the results obtained here, it can be concluded that at present the
construction industry in Nigeria is not making use of a pragmatic Cost Control
System during project execution.

BOLA-EFE ITSEKOR
4.6. ANALYSIS AND DISCUSSION OF RESEARCH QUESTION TWO
RESEARCH QUESTION 2 Can an Effective Cost Control System be achieved
during Project Execution in Nigeria?
In the bid to resolve the above question, one question was formulated (Question
2) on the questionnaire to gather response from the respondents/target
population.
Question 2 is it possible to adopt a pragmatic cost control during construction
project execution in Nigeria?
Table 4.5. The responses from the received questionnaire are analyzed below;
RESPONSES CLIENT CONSULTANT CONTRACTOR AGGREGATE %
YES 5 10 20 35 70
NO 3 2 4 9 18
UNDECIDED 2 3 1 6 2
TOTAL 10 15 25 50 100

DISCUSSION OF RESEARCH QUESTION TWO
From the results obtained above, it can be gathered that majority of the
respondents believe and are still optimistic that an effective cost control system
can be achieved, 70% of the respondents comprising of 5 clients, 10 contractors
and 20 contractors making an aggregate score of 35 all replied YES to the
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question, 18% of the respondents replied NO comprising of 3 clients, 2
consultants and 4 contractors making up 9 aggregate score, they are of the
opinion that corruption in the construction industry cannot be eradicated from
the industry. 12% of the respondents replied Undecided to the question
comprises of 2 clients, 3 consultants and 1 contractor making a aggregate score
of 6.
It can be concluded that though at present the construction industry is not
making use of an effective cost control system during project execution, the
possibilities of adopting it in the nearest future is very high. Thus the zeal of the
researcher to embark on this research was fueled/powered up.
4.7. ANALYSIS AND DISCUSSION OF RESEARCH QUESTION THREE
RESEARCH QUESTION 3 why is the construction industry not making use of an
effective cost control system during project execution in Nigeria?
To analyze the above research question, two questions (Question 3 and 4) were
formulated and presented on the questionnaire.
Question 3 what is the major factor responsible for the non-adoption of an
effective cost control system during project execution?

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Table 4.6: The responses from the received questionnaire are analyzed below;
FACTORS CLIENT CONSULT CONTR. AGGREG. %
Lack of professional competence and
knowledge on the part of the contractor.

3

5

2

10

20
Non-inclusion of a competent quantity
Surveyor during post contract stage.

4

5

10

19

38
Rise of corruption in Nigeria 1 3 3 7 14
Professional negligence on the part of the
project consultant

2

1

5

8

16
Others Nil 1 5 6 12
TOTAL 10 15 25 50 100

Question 4 lack of proper team work by consultants and contractors at post
contract stage contribute greatly to the traces of the non-adoption of an effective
cost control system during project execution?
Table 4.7: The responses from the received questionnaire are analyzed below;
RESPONSES CLIENT CONSULTANT CONTRACTOR AGGREGATE %
YES 8 10 20 38 76
NO Nil 3 3 6 12
UNDECIDED 2 2 2 6 12
TOTAL 10 15 25 50 100



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DISCUSSION OF RESEARCH QUESTION THREE
From the results obtained from table 4.6, all parties (4 clients, 5 consultants and
10 contractors with an aggregate of 19 reaching a mean percentage of 38%)
ranked the non-inclusion of a competent Quantity Surveyor during project
execution as the major factor responsible for the non-adoption of a pragmatic
cost control system. Lack of professional competence and knowledge on the side
of the contractor was ranked as second factor with 3 clients, 5 consultants and 2
contractors attesting to it, with an aggregate score of 10 putting it at 20%
percentage grading. The third factor responsible as derived from the analysis on
table 4.6 is the lack of professional competence on the part of the consultant
with 2 clients, 1 consultant and 5 contractors attesting to it, placing it at 16%
with aggregate response of 8 respondents in total.
The rise of corruption in Nigeria also constitutes the reason for not adopting a
pragmatic cost control system. 1 client, 3 consultants and 3 contractors attested
to this placing it as the fourth reason with 14% mean score. Other factors
specified by respondents as client and government factors as the least factor
with 14% mean score and 6 aggregate respondents comprising of 1 consultant
and 5 contractors.
From the results obtained from table 4.7 all the parties attested YES to the
question (Question 4). The responses from responders placed it at 76% with an
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aggregate of 38 respondents comprising of 8 clients, 10 consultants and 20
contractors. 12% of the total respondents attested NO and 12% also attested
Undecided to the question on questionnaire question 4 on table 4.7.
The factors responsible for the non-adoption of a pragmatic cost control
system during project execution in Nigeria based on the severity are
outlined below:
1.) Non-inclusion of a competent quantity Surveyor during post contract
stage.
2.) Lack of synergy between contractor and consultant during project
execution.
3.) Lack of professional competence and knowledge on the part of the
contractor.
4.) Professional negligence on the part of the project consultant.
5.) Rise of corruption and Kick-Backs in Nigeria.
6.) Other factors such as clients and government interference on proposed
flow of work.



BOLA-EFE ITSEKOR
4.8. ANALYSIS AND DISCUSSION OF RESEARCH QUESTION FOUR
RESEARCH QUESTION 4 what are the effects of not embracing a Pragmatic
Cost Control System during Project Execution?
To analyze the above research question, one question (Question 5) was
formulated and presented on the questionnaire.
Question 5 which of the following is the most rampant/severe effect suffered
due to the non-adoption of an effective cost control system during project
execution.
Table 4.8: The responses from the received questionnaire are analyzed below;
FACTORS CLIENT CONSULT CONTR. AGGREG. %
Loss of confidence reposed on consultant
and contractor by client

1

4

5

10

20
Abandonment of projects 1 2 2 5 10
Bankruptcy of both client and contractor 3 1 8 12 24
Cost and Time Overrun 5 8 10 23 46
TOTAL 10 15 25 50 100

DISCUSSION OF RESEARCH QUESTION FOUR
From the analysis above on table 4.8, it can be obtained that the major effect
suffered as a result of not embracing a pragmatic cost control system during
project execution in Nigeria is cost and time overrun. Placed at first with 46%
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mean score and an aggregate of 25, comprising of 5 clients, 8 consultants, and
10 contractors. All respondents agree that cost and time overrun is the most
suffered effect thus it was ranked highest among all category. The second with
24% mean score is Bankruptcy of both client and the contractor with an
aggregate of 12 respondents comprising of 3 clients, 1 consultant, and 8
contractors. The client and the contractor both ranked it as the second effect
suffered with the consultant disagreeing that. The third most suffered effect due
to the non-adoption of an effective cost control system with a mean score of
20% having an aggregate of 10 responses with 1 client, 4 consultants and 5
contractors is the loss of confidence reposed on consultant and the contractor by
the client. While the least suffered effect is project abandonment with 10%
mean score and aggregate of 5 responses comprising of 1 client, 2 consultants
and 2 contractors.
The effects of the Non-Adoption of an Effective Cost Control System during
Project Execution Based On Severity Ranks are outlined below;
1.) Cost and Time Overrun
2.) Bankruptcy of both Client and Contractor.
3.) Loss of Confidence Reposed on Consultant and Contractor by Client.
4.) Abandonment of Project.

BOLA-EFE ITSEKOR
4.9. ANALYSIS AND DISCUSSION OF RESEARCH QUESTION FIVE
RESEARCH QUESTION 4 what are the various ways an Effective Cost Control
System can be achieved during Project Execution?
To analyze the above research question, two questions (Question 7 and 9) were
formulated and presented on the questionnaire.
Question 7 Synergy between the consultant and the contractor to control cost
is an effective way of controlling cost during project execution?
Table 4.9: The responses from the received questionnaire are analyzed below;
RESPONSES CLIENT CONSULTANT CONTRACTOR AGGREGATE %
YES 5 12 23 40 80
NO 2 2 1 5 10
UNDECIDED 3 1 1 5 10
TOTAL 10 15 25 50 100

Question 9 Question nine (9) was asked in such a way for respondents to
supply their own solutions/suggested ways of minimizing cost/time overrun and
its ethos thereby constituting a pragmatic cost control system set-up during
project execution. This was so because the questionnaire was given to qualified
and well experience professionals in the construction industry and thus their
recommendations are trusted to provide unique solution coupled with
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hypothesized solution gotten during desk study and made mentioned on the
Literature Review part of this research.
Question 9 As a professional in the construction industry what are your
suggested ways of minimizing cost/time overrun thus leading to an effective cost
control system during project execution in Nigeria?
Table 4.10b: The responses from the received questionnaire are analyzed
below;
SUGGESTED SOLUTIONS CLIENT CONS CONT AGG. %
Ensure adequate financial control on site through proper
resource planning

3

3

5

11

22
Adopt an effective and efficient material management
policy and practices to minimize on site material waste

2

1

2

5

10
Ensure that a competent quantity surveyor is included
for both the consultant and contractor during the
execution of the project

3

1

5

9

18
Ensure that there is proper team work and synergy
between all concerned parties involved in the contract.

2

2

2

6

12
Clients should fulfill contractors obligations, especially as
regards to payment of contractors work duly executed,
or settlement of consultants fees.

Nil

2

2

4

8
Minimize propensity for late changes by ensuring a
holistic assessment of client real and stated needs.
Nil 2 5 7 14
Hire and motivate experienced and qualified workforce
to improve productivity and quality of workmanship
Nil 2 2 4 8
Minimize conflicts with subcontractors, which could
undermine onsite productivity and progress of work
Nil 2 2 4 8
BOLA-EFE ITSEKOR
TOTAL 10 15 25 50 100

DISCUSSION OF RESEARCH QUESTION FIVE
From the above analysis on table 4.90, 80% of the respondents replied YES to
the question of synergy between the consultant and the contractor as a tool
towards effective cost control during project execution while 10% each replied
NO and UNDECIDED to the question. On table 4.10b responses gotten from
professionals in the construction industry shows that ensuring adequate financial
control on site through proper resource planning is the topmost priority towards
an effective cost control system during project execution with 22% mean score,
having an aggregate contribution of 11 respondents comprising of 3 clients, 3
consultants and 5 contractors. The second most suggested way of minimizing
cost overrun is the inclusion of a competent Quantity Surveyor during project
execution, having a mean score of 18% with an aggregate of 9 responses
comprising of 3 clients, 1 consultant and 5 contractors. The third most suggested
way of improving the post contract cost control system as given by construction
professionals in the industry is to minimize the propensity for late changes by
ensuring a holistic assessment of clients needs. It is placed at 14% mean score
with aggregate of 7 responses comprising of 2 consultants and 5 contractors.
Ensuing proper team work and synergy between consultant and contractor
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comes as fourth on the list based on severity ranking by the respondents. 6
respondents attested to this, comprising of 2 clients, 2 consultants and 2
contractors giving it a mean score of 12%. The fifth most suggested means of
minimizing cost overrun on projects during their execution as given by the
research population is to adopt an effective and efficient material management
policy and practice to minimize on-site material waste. 5 respondents stated this
comprising of 2 clients, 1 consultant and 2 contractors giving it a mean score of
10%. Suggested ways as to hire and motivate experience and qualified
workforce, ensuring clients fulfill contractors obligations especially as regards to
payment and bid to minimize conflicts with subcontractors which will undermine
on-site productivity all ranked sixth with 8% each with an aggregate of 4
responses comprising of 2 consultants and 2 contractors for each.
For the sake of this research these suggested factors towards an effective cost
control system during project execution will be termed as The Eight Keys to an
Effective Cost Control System during Project Execution.
These are listed below in order of severity ranking from the analysis from
4.90.
1.) Ensure adequate financial control on site through proper resource
planning.
BOLA-EFE ITSEKOR
2.) Ensure the inclusion of a competent Quantity Surveyor for both
client/consultant and contractor during project execution.
3.) Minimize the propensity of late changes by ensuring holistic assessment
of clients needs.
4.) Ensure proper team work and synergy between all concerned parties to
the project.
5.) Adopt an effective and efficient material management policy and
practices to minimize on site material waste.
6.) Clients should fulfill contractors obligations, especially as regards to
payment of contractors work duly executed, or settlement of
consultants fees.
7.) Hire and motivate experienced and qualified workforce to improve
productivity and quality of workmanship.
8.) Minimize conflicts with subcontractors, which could undermine onsite
productivity and progress of work




BOLA-EFE ITSEKOR
CHAPTER FIVE
5.0 CONCLUSION AND RECOMMENDATIONS
5.1 Conclusion
Conclusively, following the analysis of response, one can conclude that the main
factor necessitating the occurrence of cost/time overrun and its accompanying
ethos is the non-adoption of an effective cost control during project execution as
opined by the three key players in the construction industry. Since Quantity
Surveyors are cost experts they are in the unique position to examine these
factors and take care to estimate, include contingencies in the budget, plan for,
and mitigate the adverse effects of these factors on the project cost. Clients,
Contractors and Consultants should give an economic approach to construction
work such that they would be able to identify the dominating factors leading to
cost overrun in Nigeria and apply the proffered solutions to minimizing same so
as to restore clients confidence in consultants, reduce investment risks, and
generally boost the viability and sustainability of the industry.



BOLA-EFE ITSEKOR
5.2 Recommendations
Based on the findings of the research, the following recommendations (in
accordance with the eight keys to effective cost control during project execution)
are expected from key role players in construction projects.
1. Much focus should be placed on cost control during project execution in order
to reduce the occurrence of cost overrun, enhance construction performance and
generate confidence within the construction industry.
2. Quantity Surveyors should become more alive to their responsibilities as cost
experts ensuring that they make use of correct contract administration
techniques and estimation methods.
3. Clients should clearly identify their requirements and needs, whether they are
able to achieve them with their financial capability in order to reduce payment
problems.
4. There should be proper coordination and communication among various
parties working on the project in order to improve management, control
problems and reduce any avoidable delay.
5. Contractors should come up with a clear plan and strategy before starting a
project. Early project planning and scheduling of labour, equipment and cash,
BOLA-EFE ITSEKOR
combined with a good bidding strategy, will help to obtain efficient work at a
proper price.
6. Since Contractors and Consultants generally agree on the severity rank of the
factors affecting construction cost, they should work together to ensure that they
give the Client quality for his money without exceeding the contract sum.
7. All parties should take responsibility to make use of the proffered solutions to
minimizing the occurrence of cost and time overrun.

Based On The Findings Of The Research, The Following
Recommendations Are Expected From Key Role Players In Construction
Projects.
5.2.1 Expected from Consultants
The consultant is one of the key role players in construction projects that
translates the clients needs and ideas in to plans and drawings and supervises
the translation of these plans and drawings into visible physical structures. The
following recommendations are expected from consultants.
1. Continuous coordination and direct communication, which will eliminate design
discrepancies and errors as well as omissions in design and also provide an
opportunity for professionals to review the contract documents thoroughly. This
would help in eliminating change orders or variations due to discrepancy in
contract documents.
BOLA-EFE ITSEKOR
2. Provide comprehensive information required for easier interpretation of the
drawings and setting out of the works. Specifications should also be standardized
as much as possible for ease of understanding by project participants; ensure
adequate and realistic specifications of materials and methods are stated in the
contract documents.
3. Detailed and comprehensive site investigation should be done at the design
phase to avoid variations and late changes during the construction phase.
4. As much as possible avoid complex designs, while trying to achieve aesthetic
appeal, consider seriously the issue of build ability in the design.
5. Build-in adequate flexibility in design to respond more proactively to imminent
changes in client needs and requirements; after completion of designs and plans,
cross-check designs and details to eliminate errors.
6. Adopt efficient information retrieval and distribution systems to guard against
communication gaps; respond as quickly as possible to contractor and client
questions and requests for clarification to avoid associated delays and confusions
which consequentially will lead to cost overrun.
7. Ensure that the scope includes all the work required, and only the work
required to complete the project successfully. Guard against incomplete
identification of scope to avoid frequent changes; do not incorporate
unnecessary works to avoid distractions and a drain on scarce resources.
BOLA-EFE ITSEKOR
8. Implement the necessary measures to reduce construction cost, since
construction cost reduction is one way of reducing potential cost overrun.
5.2.2 Expected From Clients/Project Owners
Clients are one of the most important parties who invest their money for
realization of construction project, and they are the key role players starting from
conception through construction up to operation of the project. The following
recommendations are expected from clients.
1. Clients should allow sufficient time to prepare project briefs and other
feasibility studies. Allow sufficient time for proper feasibility studies, planning,
design, information documentation and tender submission. This helps to avoid
errors and omissions that consequentially help in avoiding or minimizing cost
overrun.
2. Ensure comprehensive articulation and communication of owner and end-user
needs and requirements during briefing sessions; client goals should be
sufficiently accurate and realistic.
3. Fulfill contractual obligations, especially as regards to payment of contractor's
works duly executed, or settlement of fees accounts of consultants and
possession of construction site. Clients should ensure that adequate funds are
available before projects are started, so that contractors can be paid in
accordance with the contract agreement.
BOLA-EFE ITSEKOR
4. Employ professionals to work as counterpart with consultants and contractors.
5. Select suitable contractors not only on the basis of price and time offerings,
but also on experience, financial standing, capacity and expertise.
6. Minimize red-tape; that is, minimize unnecessary and excessive bureaucratic
procedures in the clients organization.
7. Implement cost reduction incentive proposals
5.2.3 Expected From Contractors
Contractors are one of the stakeholders who participate directly on the
construction projects; accordingly the following recommendations are expected
from contractors.
1. Procure construction materials and other items in collaboration with the client
ahead of time.
2. Solve problems and propose solutions on construction projects proactively.
3. Minimize adversarial relations with stakeholders on construction projects.
4. Ensure efficient time management through proper resource planning, duration
estimation, and schedule development and control; to avoid delay and hence to
avoid cost overrun due to delay.
BOLA-EFE ITSEKOR
5.2.4 Expected From Government
Most public projects are financed by the government; hence, the government is
one of the key role players in public construction projects. The following
recommendations are expected from government authorities.
1. Phasing of large construction projects by the government, this helps the
economy from becoming overheated this in turn avoids the consequential
effects of inflation and hence avoids cost overrun on construction projects.
2. The government must create a climate of economic stability that is sufficient
to inspire investors, especially in the production of construction materials to be
produced from local materials and production of enough quantity and quality of
construction materials in the local market, this will curtail excessive price
fluctuations associated with imported construction materials.
3. Make the required budget available on time.
4. Carry on capacity building programs for professionals and for firms in the
construction industry. There must be programs for institutional strengthening
and man power development in the areas of construction project management.
5. Assist individuals, organizations and institutions in the construction industry on
research and development of appropriate construction management techniques
and technology which will help to reduce problems related with cost overrun.
BOLA-EFE ITSEKOR
6. Create opportunity for domestic consultants in the construction industry to
work as joint venture with foreign consultancy firms.
7. Work with private investors and financiers to co-finance public projects to
overcome problems related with finance.
All stakeholders in the construction industry have to work for improving the out
puts of the construction industry and to sustain a healthy growth of the industry
and economy at large. Especially consultants, contractors and clients have to use
a holistic approach for solving problems in the construction industry; they have
to familiarize themselves to the latest technology and methods to solve problems
and look for solution proactively. Institutions and academicians in the
construction industry have to work hand-in-hand with practitioners in the
industry. A combined effort of stakeholders is necessary to apply the results of
research conducted.





BOLA-EFE ITSEKOR
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BOLA-EFE ITSEKOR
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BOLA-EFE ITSEKOR
Appendix
Department of Quantity Surveying,
Federal Polytechnic Nekede,
P. M. B 1036, Owerri,
Imo - State.

Dear Sir/Madam,

RE: QUESTIONNAIRE

I am a final year student of the above Institution. I am writing my thesis, on the
project topic PROACTIVE COST CONTROL DURING PROJECT EXECUTION IN
NIGERIA
In view of this, kindly assist in completing the attached questionnaires. All
information given will be handled confidentially and be used specially for the
research only.
I would be very grateful for your prompt attention and co-operation.
Thanks Yours faithfully,
..
BOLA-EFE ITSEKOR
BOLA-EFE ITSEKOR
QUESTIONNAIRE
SECTION A: PARTICULARS OF RESPONDENT
Please read carefully and tick the answer as appropriate, provide your own
answer also where necessary.
1. Name and address of company/organization

2. Location of organization/company (Town and state)

3. What is the nature of your company/organization?
a. Building/civil engineering construction works
b. Pure civil works
c. Pure building works
4. Status/ position of responding officer
a. Contract manager
b. Architect
c. Supervisor
d. Contractor
e. Quantity surveyor
f. Government official
g. Engineer
h. Others



BOLA-EFE ITSEKOR
5. Area of specialization of responding officer.
a. Project Management
b. Business Administration
c. Engineering
d. Architecture
e. Quantity surveying
f. Client
g. Others, please specify
6. No. of years of experience
7. Main type of construction role played by your organization/company
(tick the most appropriate)
a. Client/supervisors/financiers
b. Consultants (e.g. Architect, Engineer, Quantity surveyor)
c. Contractors
d. Project managers
e. Public/regulatory Authority (e.g. capital city development
authority)








BOLA-EFE ITSEKOR
SECTION B: RESEARCH QUESTIONS
Just tick () in the boxes for appropriate answers.
1. Is the construction industry making use of a pragmatic/effective
cost control system during project execution in Nigeria at present?
(a) Yes (b) No (c) undecided
2. Is it possible to adopt a pragmatic cost control system during
construction project execution in Nigeria?
(a) Yes (b) No (c) undecided
3. The following have been investigated to be the major factors
responsible for the non-adoption of an effective cost control
system during project execution. As a participant in the
construction industry what in your own opinion is the most
responsible factor for the above.
a. Lack of professional competence and knowledge on the part of the
contractor.
b. Non-inclusion of a competent quantity surveyor during post
contract stage of the project.
c. Rise of corruption in the country (Nigeria)
d. Professional negligence on the part of the project consultant.
e. Others (specify)
4. Lack of proper team work by the consultants and contractors
representatives at post contract stage contributes greatly to the traces
BOLA-EFE ITSEKOR
of non-adoption of a effective cost control system during project
execution.
(a) True (b) False (c) undecided
5. Which of the following is the most rampant/severe effect suffered due to
the non-adoption of an effective cost control system during project
execution.
a. Lack of confidence reposed on consultant and contractor by client.
b. Abandonment of projects
c. Bankruptcy of both clients and contractors.
d. Cost and time overrun.
6. The following have been investigated to be the major factors
responsible for the construction cost overrun in Nigeria. As a participant
in the construction industry what in your own opinion is the most
responsible factor for the above.
a. Poor financial control on site.
b. Increase of prices of materials and labour.
c. Wrong method of Estimation
d. Wastage on site
e. Lack of co-ordination between consultant and contractor
f. Variations/design change
e. Others (specify) .

BOLA-EFE ITSEKOR
7. Synergy between the consultants and contractors to control cost is an
effective way of controlling cost during project execution?
(a) Yes (b) No (c) Undecided
8. The construction industry is seen to be weakening in recent time
because building clients are becoming more restrictive on embarking on
construction projects. In your own view do you think that the adoption of
a pragmatic cost control system during project execution can eradicate
this predicament?
(a) Yes (b) No (c) Undecided

9. As a professional in the construction industry what are your suggested
ways of minimizing cost/time overrun thus leading to an effective cost
control system during project execution in Nigeria.
Please Highlight
Briefly



10. Who among the following participants in the building projects do you
think is the major cause of cost overrun on building projects in Nigeria?
a. Client
b. Project manager
c. Consultants
BOLA-EFE ITSEKOR
d. Contractor
e. Government