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Journal of Construction Engineering
Volume 2016 (2016), Article ID 2814126, 8 pages
http://dx.doi.org/10.1155/2016/2814126
Research Article

Deviations between Contract Sums and Final Accounts: The Case of Capital Projects in Ghana

1Building and Road Research Institute, CSIR, Kumasi, Ghana
2Attachy Construction Limited, Kumasi, Ghana

Received 8 February 2016; Revised 22 April 2016; Accepted 12 May 2016

Academic Editor: Eul-Bum Lee

Copyright © 2016 Kofi Offei-Nyako et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Cost estimation is particularly difficult, often leading to considerable deviations. For capital projects, especially transport infrastructure projects, deviations hover around an average of 28% of the estimated cost. There are several factors that cause these deviations between the final accounts and the contract sum. How these factors combine to cause deviations between the contract sum and the final account in recent times has been of great concern to construction managers and researchers alike. This study sought to identify the significant factors that result in deviations between contract sums and the final accounts of capital projects. Using a sample size of 45, comprising contractors, consultants, and clients, the factors identified using Relative Important Indices were “price fluctuations,” “late material delivery,” “changes in the scope of work,” “fluctuations in the market demand,” and “changes in design.” Using Kendall’s coefficient of concordance, a coefficient value of 0.068 was obtained. As such, the null hypothesis was rejected as there was a level of agreement among the respondents. Again, based on a significance test run, 26 out of the 40 identified factors used for the analysis were seen to be significant in influencing the deviations between contract sums and final accounts figures.