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Factors affecting the accuracy of cost estimate: Case of Jordan

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DOI: 10.1108/ECAM-10-2016-0232

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 Engineering, Construction and Architectural Management
Factors affecting the accuracy of cost estimate: case of Jordan
Muhammad T. Hatamleh, Mohammed Hiyassat, Ghaleb Jalil Sweis, Rateb Jalil Sweis,
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Accuracy of
Factors affecting the accuracy of cost estimate
cost estimate: case of Jordan
Muhammad T. Hatamleh, Mohammed Hiyassat,
Ghaleb Jalil Sweis and Rateb Jalil Sweis 113
Department of Civil Engineering, The University of Jordan, Amman, Jordan
Received 29 October 2016
Revised 25 February 2017
Abstract Accepted 27 March 2017
Purpose – Cost estimating process is an important element within the project life cycle. Comprehensive
information, expanded knowledge, considerable expertise, and continuous improvement are needed to obtain
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accurate cost estimation. The purpose of this paper is to identify the critical factors that affect accuracy of
cost estimation and evaluate the degree to which these factors are important from contractors’ and
consultants’ viewpoints.
Design/methodology/approach – Qualitative and quantitative research approaches were adopted in
collecting and analyzing the data, and testing the hypotheses. Based on the literature review, a questionnaire
was prepared and then was modified according to the results of face-to-face open-ended interviews conducted
with 11 project managers. The final version of the questionnaire was distributed to a random sample of 265
respondents. For analyzing the collected data Kendall’s and Mann-Whitney tests were conducted.
Findings – The analysis revealed that there is a strong agreement between contractors and consultants in
the ranking of the factors related to consultant, contractor, design parameters, and information. A slightly
weak agreement between contractors and consultants was noted regarding the factors related to market
conditions (external factors) and factors related to project characteristics. Furthermore, the results show that
the top ten factors affecting the accuracy of cost estimate are clear and detail drawings and specification,
pricing experience of construction projects, perception of estimation importance, equipment (cost/availability/
performance), project complexity, clear scope definition, accuracy and reliability of cost information, site
constraints (access, storage, services), material availability, financial capabilities of the client, and availability
of database of bids on similar project (historical data).
Originality/value – Offers an original view of the concept of accuracy of cost estimates as it relates to the
efficiency of the project relying on both literature review and empirical evidence.
Keywords Construction, Risk management, Project management, Construction planning
Paper type Research paper

Introduction
The construction sector plays an important role in the design and formation of the world as
it builds the environment in which we live. The construction sector has also participated in
constructing the infrastructure that vests communication, water and electricity supplies, etc.
In addition, it helps in creating most of the major parts of a community and a nation’s work
(Håkansson and Ingemansson, 2013).
Furthermore, contribution of the construction sector to the overall economic performance
of any country cannot be underestimated. In addition, it provides employment opportunities
for a large number of people (Enshassi et al., 2013).
Numerous factors that negatively impact the performance of the construction industry
include inadequate leadership, unwillingness to change, ineffective vision and strategy,
insufficient resource allocation system, failure to identify the priorities and inefficiencies in
identifying time and cost overruns, low productivity, and poor quality. Therefore, the authors
argued that there is a need to develop and implement an adequate evaluation system to
quantify the results in the industry and to improve its performance as a whole.
Enshassi et al. (2013) stated that the success of any construction project depends on the
Engineering, Construction and
accuracy of several estimations. There are a number of factors that influence the success of a Architectural Management
construction project such as project complexity, contractual obligations, effective communication Vol. 25 No. 1, 2018
pp. 113-131
between stakeholders, and the proficiency and skills of a project team. Furthermore, the success © Emerald Publishing Limited
0969-9988
of a construction project is determined by achieving time, cost, and quality objectives. DOI 10.1108/ECAM-10-2016-0232
 ECAM According to Enshassi et al. (2013), the cost estimates determine whether the company is
25,1 prepared to bid on a construction tender and consequently in winning the tender, thus
playing an important role in marketing the company. However, the final project costs in a lot
of cases due to various factors are higher than the initial estimates.
Cost estimation is a procedure of determining the scope of work and the financial
resources needed to satisfy the requirements of the project from initiation to termination.
114 Hence, information about the projects’ structural components and characteristics influences
the estimation of the costs involved (Shash and Ibrahim, 2005). Exceeding the project budget
is the major challenge for construction companies. The cost estimates could be improved
significantly if the project scope, community interest, and macro-economy are reflected
accurately (Shash and Ibrahim, 2005).
For the projects to be delivered per the specified budget, the accurate cost estimate
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and a realistic assessment of factors that can escalate the project cost should be conducted.
Many factors can affect the accuracy of cost estimating of construction projects such as
experience in pricing construction projects, understanding of estimation importance, concise
drawings and specification, availability of database of bids on similar projects, level of
competition, time allowed for preparing cost estimates, project complexity, the
padding estimates, accuracy and reliability of cost information, etc. Some of these factors
can increase the cost estimates, while others might potentially reduce the costs providing a
competitive advantage in tendering. (Akintoye, 2000; Shash and Ibrahim, 2005; Liu and Zhu,
2007; Odusami and Onukwube, 2008; Azhar et al., 2008; Larson et al., 2010; Mahamid, 2015;
Toor and Ogunlana, 2008).
The objectives of this study are:
• to identify the factors affecting the estimation process;
• to rate these factors, according to the importance of each one in the estimation process;
• to test the degree of consensus among the respondents (contractors and consultants)
regarding the ranking of the factors affecting accuracy of cost estimate based on the
Mann-Whitney test and Kendall’s Coefficient of concordance; and
• to discuss the top ten factors within the Jordanian construction companies, justify
their high rank and compare them with other studies.

Literature review
Larson and Gray (2011) stated that “the estimation is the process of predicting and
forecasting the time, cost and other resources needed to accomplish the project objective.”
According to Akintoye (2000), the estimate is defined as a technical process of predicting
the cost of implementing activities in order to accomplish the set objectives of the
construction project within a particular time period. He suggested that in order for the
estimate to be accurate, it should be based on the detailed project information.
Cost estimating is defined as the predictive process of quantifying the financial resources
dependent upon the scope of investment to establish the project budget (Dysert, 2003).
Cost estimates conducted at the initiation of the project provide the basis for decision
making concerning whether to continue with the project; at other stages, the cost estimates
allow monitoring the progress of the project and to make the decisions in regards to project
completion or termination (Barzandeh, 2011).
Project cost estimation is crucial to the success of the project and should be
considered from the earliest stages of the project; otherwise, poor estimation could
lead to the project failure; in terms of time, cost or even in the stakeholder opinion
(Larson and Gray, 2010).
 Enshassi et al. (2013) considered that the cost estimate resulting in the most economical Accuracy of
project cost is a factor defining the project’s success or failure. In other words, estimating is cost estimate
determining the way to conduct the work in the most economical manner and within the
timeframe agreed upon (Shane et al., 2009).
Pasco and Aibinu (2008) referred to the estimate as a forecast of the project cost, which
could be biased or consistent with the actual cost, generated by the estimator’s forecast or
influenced by the project conditions. In general, cost estimation is the procedure of examining 115
a specific scope of work and forecasting the cost of completing the work (Holm, 2005).
Elhag et al. (2005) argued that the cost estimation is an experience-based process; the
estimator will be able to forecast the cost of project delivery upon understanding the factors
affecting the costs.
If the purpose of cost estimate is to persuade the client of a construction/engineering
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company to actually start with the detailed design of the project, the accuracy of the cost
estimate could be a decisive factor in client’s decision: the overestimate above client’s
expectations can discourage the client from dealing with the particular company, whereas
an underestimate could potentially result in misleading the client in the size of investment
with the consequent losses and even litigations (Barzandeh, 2011).
Numerous studies in many countries have been conducted to identify specific groups of
factors which affect estimation accuracy, considering these factors during the process of
cost estimation, and to investigate the occurrence of errors in accuracy of estimation in
isolation from the factors affecting the pricing accuracy (Akintoye, 2000; Shash and
Ibrahim, 2005; Dysert, 2003; Liu and Zhu, 2007; Odusami and Onukwube, 2008; and
Azhar et al., 2008).
Different sets of factors at each stage of the project define the effectiveness of cost estimation
according to the phase objectives and the available detailed information.
Project estimation is a complex process and, during the estimation process, there is no
such thing as an accurate estimate. A poor estimation would lead to the project failure;
in terms of time, cost or even on the stakeholder’s opinion (Larson and Gray, 2011).
Several research works have been conducted across several countries to identify factors
that affect the accuracy of cost estimation. For example, Mahamid (2015) identified and
ranked 41 factors affecting the accuracy of cost estimation for construction projects in the
West Bank in Palestine. He investigated the consensus among contractor and consultant
toward the ranking of the importance of factors affecting cost estimating accuracy between
contractors and consultants.
Barzandeh (2011) tabulated the most common factors affecting the estimation accuracy
based on the analysis of the existing literature and previous research works to show the
harmonization in selection of the factors that affect the estimation accuracy. He focused on
16 factors and studied the repetitiveness of these factors on the previous studies.
In Nigeria, such study had been conducted by Oladokun et al. (2011), who studied and
analyzed data extracted from 81 construction projects. The study found that the project size and
project sector have the highest impact on the accuracy of the pre-tender cost estimate in Nigeria.
Odusami and Onukwube (2008) discussed the factors that affect the pre-tender cost
estimation in a construction project in Nigeria. Their results identified six factors as the
most influencing factors per the study finding. These factors are expertise of consultants,
quality of information and flow requirements, the project team’s experience of the
construction type, the tender period and market condition, extent of completion of a
pre-contract design, and the complexity of design and construction. Considering these
factors at the inception stage, the quantity surveyors should enable them to provide a
satisfactory advice on cost estimate to the clients.
Azman et al. (2013) endeavored to improve the estimation accuracy of initial cost
estimates in the Public Works Department of Peninsular Malaysia. The author analyzed
 ECAM 83 projects and tender bids. Accuracy estimates is affected by the attitude of quantity
25,1 surveyors in relation to a number of factors: project size, number of bidders, location and
types of project, contract period, design scopes, cost data, location, and others. He concluded
that the availability of sufficient design information and cost data are the most important
factors in any approach used in preparing accurate estimates.
Pasco and Aibinu (2008) studied the project-related factors which influence the
116 discrepancy between the conceptual cost estimate and tender summation, consequently
affecting the estimation accuracy. According to their findings, the factors of the most
significant effect on the accuracy of the cost estimate are the project size, project
procurement method and location of the project.
Azhar et al. (2008) identified 42 factors causing cost overruns in local construction
contracting firms in Pakistan. They noted that the medium-sized contracting firms are
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subjected to a higher percentage of project cost overruns due to the tendency to assume
greater risk during the estimation process.
Alumbugu et al. (2014) conclude that the most influencing factor affecting the accuracy of
pre-tender cost estimate is the experience and skill level of the estimator (Table I).

Researchers Region Factors affecting accuracy of cost estimate

Akintoye (2000) UK Project complexity followed by technological requirements, project

information, project team requirement, contract requirement, project
duration and market requirement
Enshassi et al. Gaza Strip Location of the project, segmentation of the Gaza strip and limitation of
movements between areas, political situation, and financial status of the owner
Elhag et al. (2005) UK Absence of alterations and late changes to design (no “design-as-we-go” on
site philosophy), management team (suitability, experience, performance),
priority on construction time/deadline requirements, variation orders and
additional works (magnitude, timing, interference level), completeness and
timeliness of project information (design, drawings, specifications), intensity/
complexity of building services, quality of design and specifications,
complexity, level of competition and level of construction activity, certainty
of project brief
Chan and Park Singapore High technological level; contractor’s specialized skills; and public
(2005) administered contract have significant effects on cost. Other factors include
contractor’s technical expertise; owner’s level of construction sophistication
and contractor’s financial management ability
Toor and Singapore Lack of resources, poor contractor management, shortage of labor, design
Ogunlana (2008) delays, planning and scheduling deficiencies, changed orders and
contractors’ financial difficulties were also highlighted during the interviews.
Notably, problems such as “multicultural and multilingual environment
causing ineffective communication”, “large number of participants of
project” and “involvement of several foreign designers and contractors”
Odusami and Nigeria Expertise of consultants, quality of information and flow requirements, the
Onukwube (2008) project team’s experience of the construction type, the tender period and
market condition, extent of completion of pre-contract design, and the
complexity of design and construction
Verster and South the change in scope of work on site, incomplete design at the time of tender,
Ramabodu Africa contractual claims (extension of time with cost), lack of cost planning and
Table I. monitoring of funds, and delays in costing variations and additional works
A summary of Alumbugu et al. Nigeria Experience and skill level of the consultants, Project teams experience on the
previous studies (2014) construction type, clear and detail drawings and specification, completeness
on factor affecting of cost information, accuracy and reliability of cost information
the accuracy of Azman et al. (2013) Malaysia Contract period, use of mean of the bids, availability of design information,
cost estimate proper cost planning, using of historical cost data
 Research method Accuracy of
Sekaran (2003) explained that research methodology is “an organized, systematic, critical, cost estimate
scientific investigation into a set problem; engage with the objective of finding answers or
solutions.” Hence, the following sections illustrate research approach, methods of data
collection, and population and sample size calculation.

Research approach 117

To collect the information required, this study adopted a mixed research approach which is
a combination of quantitative and qualitative methods.
Semi-structured interviews were conducted to collect the qualitative data of the study.
The interview structure was prepared in a questionnaire form; the contents were based on a
literature review and consisted of 50 factors which have been investigated frequently by
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researchers in the last 13 years as shown in Table AI. In total, 11 project/construction

managers with more than 15 years of working experience were interviewed to revise the
factors and to choose only the most critical ones.
The Delphi technique was employed to collect the qualitative data. The Delphi technique
is a series of activities (each activity is called a round) that provides an interaction between
the researcher and a group of experts separately about some specific subject, commonly by
using a designed questionnaire (Yousuf, 2007).
In this study, the Delphi technique consisted of two rounds: in the first round, a
structured interview was conducted with experts in the construction project. The interview
consisted of a questionnaire that included 50 factors affecting the accuracy of the
estimation; the participants were asked to give an approximate percentage for the effect of
each factor in the accuracy of the estimate and to give their explanation for their answers if
they had one. After completing round 1, the data were analyzed and the factors were ranked.
Furthermore, the questionnaires were rewritten to include the percentage for each factor and
round 2 of interviewing the participants was started. Before starting the second round, the
percentage that participants gave to each factor affecting the accuracy of the estimation in
the first round was mentioned to them. Next, participants were asked to estimate these
factors again. The data collected from the second round were used to determine the most
important factors that have a high effect on the accuracy of estimation (i.e. factors have been
given an average percentage of more than 65 percent).
In total, 27 factors were selected by experts as the most critical factors affecting the
accuracy of cost estimation in Jordan. These factors were used to construct a structured
questionnaire in order to collect the quantitative data and determine the most important
variables that affect the accuracy of cost estimation.
Accordingly, the operational measures of these factors are categorized into three groups
as follows:
(1) factors related to consultants, contractor, design parameters, and information;
(2) factors related to market conditions (external factors); and
(3) factors related to project characteristics.
Table II shows the factors influencing cost estimate. The respondents were asked to rate the
extent that these factors affect the accuracy of cost estimate on a 5-point Likert scale, with 5
being “very large degree,” and 1 being “very small degree.”

Population and sample

Determining the sample size of the targeted population is an essential component
of any survey since inadequate or inappropriate sample size results in inaccurate findings
(Barlett et al., 2001).
 ECAM Factors no. Factors
25,1
Factors related to consultant, contractor, design parameters and information
F1 Experience of pricing construction projects
F2 Clear and detail drawings and specification
F3 Availability of database of bids on similar project (historical cost data)
F4 Accuracy and reliability of cost information
118 F5 Project’s team experience of the construction type
F6 Completeness of cost information
F7 The estimating method used
F8 Level of involvement of the project manager
F9 Quality of information and flow requirements
F10 The quality of the assumptions used in preparing the estimate
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F11 Time allowed for preparing cost estimates

F12 Perception of estimation importance
F13 The padding estimates
F14 Contractor bidding strategy
F15 Risk sharing between the parties
Factors related to market conditions (external factors)
F16 Level of competition (number of competitors)
F17 Material availability
F18 Labor cost
F19 Labor availability
F20 Equipment (cost/availability/performance)
F21 Level of workmanship (productivity and performance)
F22 Market conditions/ economic climate
Factors related to project characteristics
F23 The project complexity
F24 A clear scope definition
Table II. F25 Financial capabilities of the client
Cost estimate F26 Impact of project schedules
influencing factors F27 Site constraints (access, storage, services)

For this study, the target population is civil engineers who are working in the construction
industry in Jordan. According to Jordan Engineers Association ( JEA) statistics for 2015, there
are 34,297 civil engineers currently registered in JEA and working within the Kingdom.
The relative required sample size was calculated based on the equations below
(Barlett et al., 2001):

  
N 0 ¼ t 2  s2 = d 2

where t ¼ value of the selected α level of 0.025 in each tail ¼ 1.96 ; s ¼ estimate of standard
deviation in the population ¼ 1.25; d ¼ acceptable margin of error for mean being
estimated ¼ 0.15; N0 ¼ 276.
According to Barlett et al. (2001), the correction shall be made using the following equation:


N ¼ N 0 = 1 þ N 0 =pop
In total, 265 questionnaires, therefore, were distributed to civil engineers working in Jordan.

Pilot study
In order to eliminate possible misunderstandings and inconsistencies from the
questionnaire and to improve its form, design, structure of the statements and the
 overall content, a pilot study was conducted with 30 respondents in the construction field. Accuracy of
Based on their feedback, several expressions were revised or elaborated and the cost estimate
questionnaire was put in its final form.

Reliability and validity

Pilot study was carried out to evaluate the reliability content and the validity of
the questionnaire. Reliability of the tool means that the results of the research 119
are stable and can be replicated for another experiment under the similar conditions;
validity means that the measure is assessing the intended concept of the research
(Roberts et al., 2006).
Cronbach’s α coefficient test is used for appraisal of the reliability. The measure is
considered to be reliable if the value of Cronbach’s α coefficient equals or exceeds 70 percent
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(Cronbach and Shavelson, 2004). In this research, the values of Cronbach’s α Coefficient for
each group ranged from 0.783 to 0.967. Since these values were more than 0.7, the
instrument of questionnaire was stable and reliable.
To ensure the validity of the questionnaire, two statistical tests were conducted. The first
test (Spearman test) was conducted to ensure criterion validity. For this purpose, the
Spearman coefficient and p-value were calculated between each item in one group and the
whole groups. The obtained results of the p-values are less than 0.05. Hence, the correlation
coefficients of the trait are statistically significant, meaning that the instruments used are
valid to measure what they are purposed to measure.
The second test (Spearman test) is conducted to ensure construct validity. The Spearman
coefficient and p-value are calculated for each of three groups. The p-values are less than
0.05. Hence, the correlation coefficients of the trait are statistically significant; this means
that the instruments used are valid.

Results and discussion

Demographic description
Demographic information section of the questionnaire in this study was designed to get the
following information from respondents. Frequencies and percentages are conducted in
order to describe the profile information of the respondents as shown in Table III.
The degree of their company classification:
• the first category;
• the second category;
• the third category; and
• the fourth category.
According to the Ministry of Public Works and Housing in Jordan, these categorization
should be given to the company considering some specific criteria such as the
administration staff, technical staff, technical manager experience, machinery, and
equipment. To obtain the first category, the company needs to satisfy the highest
requirements.

Descriptive analysis
In order to describe the attitude of respondents toward the factors affecting the accuracy of
cost estimation, relative importance index (RII) was conducted for overall respondents.
The RII was widely used to quantify the factors which may have an effect on the estimation
accuracy. Many researchers (such as Elhag et al., 2005; Enshassi et al., 2013) used RII to
rank these factors. Thus, based on the RII values, the ranking of cost estimate-influencing
 ECAM Respondents’ information Frequency Percent
25,1
Type of participation in project implementation
Contractor 170 64.2
Consultant 95 35.8
The company classification
120 Roads 27 10.2
Buildings 147 55.5
Electromechanical 47 17.7
Water and sanitation 11 4.2
Other works 33 12.5
The degree of the company classification
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The first category 156 58.9

The second category 38 14.3
The third category 49 18.5
The fourth category 22 8.3
Current position
Company/organization manager 10 3.8
Project manager 56 21.1
Construction manager 44 16.6
Office engineer 72 27.2
Site engineer 45 17.0
Other 38 14.3
Working experience in the construction industry
o3 years 35 13.2
3-5 years 90 34.0
Table III. 5-10 years 80 30.2
Demographic 10-15 years 37 14.0
description W15 years 23 8.7

factors were done. To calculate the RII, the following equation was used:
P
w 5n5 þ 4n4 þ3n3 þ2n2 þ1n1
RII ¼ 100% ¼  100%
AN 5n
where W is the weighting given to each factor by the respondent, ranging from 1
(not important) to 5 (very important). A is the highest weight (which is 5 in this study). N is the
total number of samples.
Table IV shows that the RII values ranged between 67.2 and 83.0 percent. These values
mean that all of these factors are considered important from the respondent’s perspective.
As shown in the table “Clear and detail drawings and specification” was ranked as the
most important factor, while “Contractor bidding strategy” was ranked as the least
important factor.
Besides RII, coefficient of variation (COV ) was computed to compare the relative variability
of various responses. It represents the standard deviation as a percentage of the mean: it is a
measure of predictability of evaluating bias. Large COV means that the evaluated bias is
dispersed and unpredictable.
COV was computed using the following equation from Elhag et al. (2005):
s
COV ¼  100%
m
where S is the standard deviation and µ is the mean.
 Rank
Accuracy of
COV RII within Overall cost estimate
Group Factor µ ɕ (%) (%) group rank

Factor related to Experience of pricing construction 4.0906 1.09376 26.6 81.8 2 2

consultant, projects
contractor, design Clear and detail drawings and 4.1547 1.05647 25.3 83.0 1 1
parameters and specification 121
information Availability of database of bids on 3.7547 1.08197 28.8 75.0 5 10
similar project (historical data)
Accuracy and reliability of cost 3.8038 0.99582 26 76.0 4 7
information
Project’s team experience of the 3.7660 0.97214 25.7 73.2 8 14
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construction type
Completeness of cost information 3.6604 1.02882 27.8 73.0 9 15
The estimating method used 3.5170 1.03385 29.4 70.2 11 20
Level of involvement of the project 3.5057 1.12182 32 70.0 12 21
manager
Quality of information and flow 3.4792 1.09083 31.4 69.6 13 22
requirements
The quality of the assumptions used 3.7245 1.11275 29.8 74.7 7 12
in preparing the estimate
Time allowed for preparing cost 3.7472 1.02997 27.5 74.9 6 11
estimates
Perception of estimation importance 4.0453 0.91174 22.5 80.9 3 3
The padding estimates 3.4642 1.11449 32.1 69.3 14 23
Contractor bidding strategy 3.3623 1.05748 31.4 67.2 15 24
Risk sharing between the parties 3.5321 1.16446 32.9 70.6 10 19
Factors related to The project complexity 3.9170 0.98890 25.1 78.2 1 5
project A clear scope definition 3.9019 1.09657 27.9 78.0 2 6
characteristics Financial capabilities of the client 3.7623 1.15474 30.5 75.2 4 9
Impact of project schedules 3.6038 1.0684 29.6 72.0 5 16
Site constraints (access, storage, 3.8000 1.17163 30.7 76.0 3 7
services)
Factors related to Level of competition 3.6830 1.11017 29.8 73.6 4 13
market conditions Material availability 3.7887 1.04477 27.5 75.7 2 8
(External factors) Labor cost 3.7208 1.09637 29.3 74.4 3 12
Labor availability 3.5434 1.02940 28.8 70.8 6 18
Equipment (cost/availability/ 3.9585 1.00103 25.3 79.0 1 4 Table IV.
performance) Descriptive analysis
Level of workmanship (productivity 3.5472 1.18011 33.2 70.9 5 17 of factors affecting
and performance) the accuracy of
Market conditions / economic climate 3.5245 1.09422 31.1 70.0 7 21 cost estimation

As shown in Table IV, COV of factors ranged between 22.5 and 33.2 percent, indicating that
the variations of respondents’ attitude related to factors affecting cost estimation accuracy
is relatively low. This is a good indication which demonstrates a relatively high level of
agreement between the respondents.
The top ten factors affecting the accuracy of cost estimate are clear and detailed
drawings and specification, experience of pricing construction projects, perception of
estimation importance, equipment (cost/availability/performance), project complexity, clear
scope definition, accuracy and reliability of cost information, site constraints (access,
storage, services), material availability, financial capabilities of the client, and availability of
database of bids on similar project (historical data).
This result suggests that there is a very slight variation in the ranking of each group.
Among the top ten factors, five factors were common between consultants and contractor.
 ECAM Three of which are design parameters, and information-related factors and two factors related
25,1 to market conditions (external factors). It should be noted that the same factors were also
among the top ten factors but with different ranking in many studies, such as Akintoye,
MohdAzrai (2012), Enshassi et al. (2013), and Alumbugu et al. (2014). Furthermore, these
factors are interrelated and have direct consequences on the project performance and on its
profitability. During the estimation phase, the estimator should focus on these factors due to
122 importance of these factors:
• Without the clear and detail drawings and specification, some of the information will
be missing, which might lead to an inaccurate estimate, disputes, and litigations.
• The experience in pricing construction project could play an important role in the
assumptions that the estimator will use to achieve an accurate estimate.
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Cost estimation process is a project team responsibility who work to determine the
quality and quantities of cost estimation in order to match the project type and
quality expectation. Hence, loss of experienced staff leads to poor estimate.
This factor asserts the significance of the experience level not only of the estimating
team but also of the engineering staff.
• Perception of estimation importance: if the estimators consider the importance of the
estimate during the estimation process, they will make sure to achieve a flawless
estimate, consistent with the estimation importance.
• Equipment (cost/availability/performance): any change in the equipment cost affects
the accuracy of the estimates by impacting the overall estimate, the same concept
also applies to the equipment availability and performance.
• The project complexity should be examined carefully: the project should be fully
understood by the estimators in order to provide the best price for each activity
(in case of a complex project, a detailed study should be implemented to recognize
each and every task on the project). The project complexity factor is related to the
scope of a project, complexity of design and site constraints. Project complexity can
be examined in terms of size and kind of work, extent of repetition, number of
operations and operations predictability. Project complexity is the determinant factor
for performance on site which affects contract duration and consequently the
construction cost.
• A clear scope definition is important since a project scope is related to client’s
requirement and specifications. Project scope determines the appropriate project
team and works breakdown units and project’s cost and duration. Hence, project
team and estimators should eliminate any ambiguity in scope and make it clear and
easy to read and understand.
• Accuracy and reliability of cost information: the preparation of a pre-tender
construction plan and cost estimate in the construction firm should collect sufficient
project information, project details, drawings and project specification. The importance
of this information requirement is to determine the type of work and the resources
required. Hence, the cost information that the estimator use in the estimate should be
accurate and from a reliable source to insure an accurate estimate.
• The estimator should take in his account the site constraints (access, storage,
services), because these might cost an over charge that was missed in the original
estimate. The site of the project is important. Constraints of site must be analyzed
completely for cost elements that are unique to the location and have the greatest
effect on the cost estimate.
 • Material availability: when the estimator makes his estimate, he should consider the Accuracy of
availability of the material that will be used in the project; if the material cannot be cost estimate
purchased on the right time or even from a local source during the construction
phase, it must be purchased from another source which will cause an extra cost that
was not included in the original estimate.
• Financial capabilities of the client: if the estimate is above the capabilities of the
client, it might intimidate the client which means losing the project. 123
• Availability of database of bids on a similar project (historical data) and keeping a
record for the past estimates could help in achieving an accurate estimate in the future.
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Hypothesis testing
To achieve the final aim of this study mentioned earlier, three main hypotheses were
formulated. To test these hypotheses written below, two non-parametric tests, Mann-Whitney
test and Kendall’s coefficient of concordance (W) were performed. Mann-Whitney test was
used here to investigate if there is a significant difference at α ⩽ 0.05 in ranking the factors
affecting the estimate accuracy, while W was used to estimate the degree of agreement
between contractors’ and consultants’ opinions related to the ranking of each of the tested
factors, and whether this agreement is statistically significant. The range of the value W is
between 0 and 1 (1 represents the perfect agreement between contractors and consultants,
while 0 represents completely no agreement between contractors and consultants).

The first main hypothesis

H1. There is no significant difference between contractors and consultants toward the
ranking of factors related to contractors, consultants, design parameters, and
information.
This category includes 15 factors. These factors achieved RII between 68.2 and 82.4 percent
according to contractors’ perception, and RII between 63.2 and 84 percent according to
consultants’ perception. The relatively high values of RII for both contractors and
consultants indicate that these variables have a relatively high degree of influence on project
cost estimation.
Table V shows that Mann-Whitney ¼ 103.5 and p-value ¼ 0.708 are larger than the 0.05
significance level. The null hypothesis is therefore accepted at p W0.05. Hence, there is a no
statistically significant difference between contractors and consultants towards the factors
related to contractors, consultants, design parameters, and information.
Also, Kendall’s coefficient is found to be 0.683 and the p-value is 0.00 which is smaller
than 0.05 significance level. The conclusion to make here is that there is a significant and a
strong degree of agreement between contractors and consultants toward the factors related
to contractors, consultants, design parameters, and information.
This category contains some factors which are considered more subjective, costly and
time consuming to elicit as project data.
The second main hypothesis
H2. There is no significant difference between contractors and consultants toward
ranking of factors related to market conditions (external factors).
This category includes seven factors. Again, these factors achieved RII between 70.4 and 81
percent regarding contractors’ perspective, and RII between 68 and 79 percent regarding
consultants’ perspective. This indicates that these variables have a relatively high degree of
influence on project cost estimation.
 ECAM Factors Contractors Consultants
25,1 RII (%) Rank RII (%) Rank

Experience of pricing construction projects 81.4 2 82.4 2

Clear and detail drawings and specification 82.4 1 84 1
Availability of database of bids on similar project 71.4 9 81.6 4
Accuracy and reliability of cost information 75.4 5 77 5
124 Projects team experience of the construction type 76 4 74 8
Completeness of cost information 72.2 8 74.6 7
The estimating method used 69.6 11 71.2 9
Level of involvement of the project manager 69.4 12 71.2 9
Quality of information and flow requirements 69.4 12 69.8 12
The quality of the assumptions used in preparing the estimate 73 7 76.8 6
Time allowed for preparing cost estimates 75 6 74.4 8
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Perception of estimation importance 80 3 82.2 3

The padding estimates 68.2 13 70.9 10
Contractor bidding strategy 69.4 12 63.2 13
Risk sharing between the parties 70.9 10 70 11
Overall 68.92 – 74.88 –
Mann-Whitney 103.5
Table V. Sig 0.708
The results for the Kendall’s coefficient 0.683
first hypothesis Sig 0.000

Table VI shows that Mann-Whitney ¼ 19.5 and p-value ¼ 0.619 are larger than
0.05 significance level. The null hypothesis is therefore accepted at p W0.05. Hence, there
is a statistically insignificant difference in mean between contractors and consultants
toward the factors related to market conditions (external factors) (Table VI).
Also, Kendall’s coefficient was found to be 0.195 and the p-value is 0.619 which is larger
than 0.05 significance level, indicating an insignificant agreement between contractors and
consultants toward the factors related to market conditions (external factors).
Two factors that belong to this category were ranked as the top ten factors. This is an
indication that the market and economic boom and bust in the construction industry have a
strong effect on tender prices and cost estimation.

The third hypothesis

H3. There is no significant difference between contractors and consultants toward
ranking of factors related to project characteristics.

Contractors Consultants
Factors RII (%) Rank RII (%) Rank

Level of competition 70.4 6 79 1

Material availability 76.4 2 74.4 4
Labor cost 74.4 3 74.2 5
Labor availability 71.2 5 70 6
Equipment (cost/availability/performance) 81 1 75.4 3
Level of workmanship (productivity and performance) 76.4 2 77.2 2
Market conditions / economic climate 71.7 4 68 7
Overall 74.5 – 63.7 –
Mann-Whitney 19.5
Table VI. Sig. 0.619
The results for the Kendall’s coefficient 0.195
second hypothesis Sig. 0.619
 This category includes five factors, these factors achieved RII between 71 and 78.4 percent Accuracy of
regarding contractors’ perspective and RII between 69.4 and 82 percent regarding cost estimate
consultants’ perspective. This indicates that these variables have a relatively high degree of
influence on project cost estimation.
Table VII shows that Mann-Whitney ¼ 12.5 and the p-value ¼ 0.950 is larger than 0.05
significance level; the null hypothesis is therefore accepted at pW 0.05. Hence, there is a
statistically insignificant difference in the mean between the perception of contractors and 125
consultants toward the factors related to project characteristics.
Also, Kendall’s coefficient is found to be 0.100 and the p-value is 0.900 which is larger
than 0.05 significant level. Therefore, there is an insignificant agreement between
contractors and consultants toward the factors related to project characteristics.
Three factors that belong to this category were ranked as the top ten factors. This is an
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indication that the characteristics of project, project specification and client’s requirements
have a strong effect on tender prices and cost estimation.
The results of hypothesis testing revealed that a high agreement between contractors
and consultants occurred in the ranking of the factors related to consultant, contractor,
design parameters, and information. A slightly weak agreement between contractors and
consultants occurred in the factors related to market conditions (external factors) and
factors related to project characteristics, this was confirmed by low W obtained within each
category. Same results were supported by many studies such as Mahamid, 2015;
MohdAzrai, 2012; and Enshassi et al., 2013. This proves that there is some agreement
between contractors and consultants.

Conclusions
Based on the results obtained from this research, the following conclusions of the research
are drawn:
• There are slight differences between the contractors’ response and consultants’
response over the importance factors affecting the accuracy of cost estimate.
This result indicates that each of them looks at the process of cost estimation almost
the same. Many of the cost estimate-influencing factors discussed in this study do not
have a high level of importance regarding their influence on the accuracy of cost
estimate. Such as, “the padding estimate,” “contractor bidding strategy,” “quality of
information and flow requirement,” “the estimating method used,” “level of
involvement of the project manager,” “risk sharing between the parties,” “level
of workmanship (productivity and performance)” and “labor availability.” Some of
these types of variables are considered more subjective in nature and difficult to be
measured, while others like availability of labor, and level of workmanship have a

contractors consultants
Factors RII (%) Rank RII (%) Rank

The project complexity 76.6 2 81.2 2

A clear scope definition 75.7 3 82 1
Financial capabilities of the client 78.4 1 69.4 5
Impact of project schedules 71 5 73.6 4
Site constraints (access, storage, services) 75.2 4 77.2 3
Overall 75.4 76.7
Mann-Whitney 12.5
Sig. 0.950 Table VII.
Kendall’s Coefficient 0.100 The results for the
Sig. 0.900 third hypothesis
 ECAM varied nature and perhaps the availability of these variables in a country like Jordan
25,1 makes a limited impact on the overall cost. Also, these factors still have an effect over
the long-term period or indirect impact.
• The top ten factors emphasize the importance of human effect on estimate accuracy,
not only of the estimating team but also of the engineering staff. Furthermore, the
ranking of “clear drawing and specification” as the most important factor indicates that
126 construction project costs were more influenced by architects and consultants than by
contractors. This means that the project costs are more determined by decisions at the
initial, feasibility, and early design stages rather than by later construction stages.

Significance of the research

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As previously stated, there are many studies seeking to examine the impact of different
factors on the accuracy of cost estimates. However, there is no consensus among researchers
on the most important and influential factor on the accuracy of cost estimate. Also, to the
knowledge of researcher, there is no study conducted in this area in Jordan. Hence, these are
the most important reasons that prompted the researchers to conduct this study.

Limitations
This research was applied only in the ordinary construction projects, which are considered
not that complex, because it does not include high-tech, marine, major infrastructure
projects, and heavy construction projects in Jordan.
However, it seems that there is a necessity to focus also on the perspectives of other
stakeholders. Their perspective can help in evaluating the success of the project
performance regarding some extra aspect of the project success indicators like safety, health
of the laborers, and the surrounding environment.
Furthermore, the study has limited its focus for collecting the data on the interview as a
qualitative approach, and questionnaires, as a quantitative approach. The result of this study
depends only on the data obtained from these approaches. However, there is a need to use
other resources of data, such as examining case studies of one or more accomplished projects.

Implications
This study is a preliminary review to collect data that will be used to evaluate the impact of
these factors on the accuracy of cost estimate. In addition, it investigates the impact of the
accuracy of cost estimate on the project performance.

Recommendations
Through the results obtained from the theoretical framework of the study and through the
results obtained from the statistical analysis of the data, the following recommendations are
being proposed:
• The results showed that there is an impact of the different factors on the estimation
accuracy; despite some of these factors being critical, through the study it appeared that
they have an insignificant effect on the accuracy of cost estimation from the consultants’
perspective. Therefore, the Jordanian construction sector should pay more attention to
these factors by means of using the historical data, choosing the appropriate estimating
method, increasing the level of involvement of the project manager, improving quality of
information and flow requirements, reducing site constraints, etc.
• The alliance of the contractor and the consultant and good communications help to
achieve the project objectives, especially in the early stages of the project. There is a
need to increase the awareness about the importance of the alliance and the effective
 communication between the contractor and the consultant to make sure that the Accuracy of
project is on the right track. cost estimate
• The study recommends to use a case study approach in the collection of data in the
future studies to check the exact impact on the estimation accuracy and to relate the
project performance indicator to the estimation process in each case.

127
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Further reading
Bourne, M., Neely, A., Platts, K. and Mills, J. (2002), “The success and failure of performance
measurement initiatives: perceptions of participating managers”, International Journal of
Operations & Production Management, Vol. 22 No. 11, pp. 1288-1310.
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International Journal of Quality & Reliability Management, Vol. 17 Nos 4/5, pp. 423-442.
Cheung, S.O., Suen, H.C. and Cheung, K.K. (2004), “PPMS: a web-based construction project
performance monitoring system”, Automation in Construction, Vol. 13 No. 3, pp. 361-376.
Hatamleh, M.T. (2016), “Factors affecting the accuracy of cost estimation and its impact on the overall
project performance for construction projects in Jordan”, Master thesis, The University of Jordan,
Amman.
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Bylaw No. (71) Of 1986 as amended, available at: www.mpwh.gov.jo/English/Pages/inst3
(accessed February 5, 2017).
Ling, F.Y.Y (2004), “Key determinants of performance of design-bid-build projects in Singapore”,
Building Research & Information, Vol. 32 No. 2, pp. 128-139.
Oberlender, G.D. and Trost, S.M. (2001), “Predicting accuracy of early cost estimates based on estimate
quality”, Journal of Construction Engineering and Management, Vol. 127 No. 3, pp. 173-182.
Trost, S.M. and Oberlender, G.D. (2003), “Predicting accuracy of early cost estimates using factor
analysis and multivariate regression”, Journal of Construction Engineering and Management,
Vol. 129 No. 2, pp. 198-204.
Verster, J.J., Ramabodu, M.S. and Van Zyl, C.H. (2013), “Problems, preferences and processes related to
dispute resolution in construction in South Africa”, International Journal of Project Organisation
and Management, Vol. 5 Nos 1-2, pp. 127-144.

Corresponding author
Rateb Jalil Sweis can be contacted at: rateb.sweis@gmail.com
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Liu Odusami
Trost and and and Azhar
Oberlender Zhu Onukwube et al. MohdAzrai MohdAzrai Enshassi Alumbugu Mahamid Appendix
(2001) Elhag Dysert (2007) (2008) (2008) (2012) (2012) (2013) et al. (2014) (2015)

The project duration * *

The project type * *
The project complexity * * *
A clear scope definition for the client * *
Financial capabilities of the client * *
Clients method of payment *
Experience of pricing construction * * * *
Client evaluation and awarding
policy *
Type of client *
Project teams experience of the
construction type * *
Experience and skill level of the
consultants *
Clear and detail drawings and
specification * *
Decision making ability *
Perception of estimation importance *
Quality of information and flow
requirements * *
Completeness of cost information * * *
Accuracy and reliability of cost
information * * * *
Completeness of project documents * *
Availability of all fields of
specialization in a project team * *
The estimating method used * *
The padding estimates *

(continued )
cost estimate

129
Accuracy of

factors
Table AI.

estimate influencing
Source of cost
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25,1

130
ECAM

Table AI.
Liu Odusami
Trost and and and Azhar
Oberlender Zhu Onukwube et al. MohdAzrai MohdAzrai Enshassi Alumbugu Mahamid
(2001) Elhag Dysert (2007) (2008) (2008) (2012) (2012) (2013) et al. (2014) (2015)

Availability of database of bids on

similar project (historical cost data) * *
Procedure for updating cost
information * *
Time allowed for preparing cost
estimates * * *
Impact of team integration and
alignment *
The quality of the assumptions used
in preparing the estimate * * *
Level of involvement of the project
manager *
Level of workmanship *
Category of contractor *
Management ability of the
contractor *
Level of competition (number of
competitors) *
Labor (cost/availability) * * *
Equipment (cost/availability/
supply/conditions/performance) * * * *
Unforeseeable changes in taxation *
Knowledge of contractor * *
Contractor bidding strategy *
Financial status of the contractor *
Site constraints (access, storage,
services) * * *

(continued )
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View publication stats

Liu Odusami
Trost and and and Azhar
Oberlender Zhu Onukwube et al. MohdAzrai MohdAzrai Enshassi Alumbugu Mahamid
(2001) Elhag Dysert (2007) (2008) (2008) (2012) (2012) (2013) et al. (2014) (2015)

Risk sharing between the parties

Construction method and
requirement *
Type of contract *
Value of specialist work *
Clear contract conditions *
Tender selection method (open, etc) *
Impact of project schedules *
Inflationary Pressures *
Time between project
announcement, bid submission and
award of contract * *
Social and cultural requirements *
Market conditions/economic climate * *
Material availability and price * * * * *
Political factor/government
requirements/policy * *
cost estimate

131
Accuracy of

Table AI.