Determination Of Contingency Sum For Building Projects In Ghana
Keywords:
Determination, Contingency Sum, Building, Projects, GhanaAbstract
The building industry is always surrounded by many risks and uncertainties and their degree in a project results from a combination of factors which differ from one project to another. One of the attempts to handle risks is by allocating project contingency sum. Traditionally, construction professionals determine cost contingency simply by adding; say 10% contingency onto the estimated cost of a project. However, this conventional method is arbitrary arrived at and difficult to justify or defend and coupled with so many associated weaknesses. The aim of the study is to investigate into methods of determining project cost contingency. The specific objectives are : to identify the existing method(s) of determining project contingency sum in Ghana and to identify the factors influencing the determination of building project contingency sum in Ghana This study has adequately reviewed some methods of determining project contingency sum, factors that influence the determination of project contingency sum in Ghanaian construction industry and elsewhere. A random sampling technique was used to select a sample size of 92 construction professionals practicing. A total of Ninety-Two (92) questionnaires were distributed to the respondents in the building industry out of which 67 representing 72.9% were completed and returned. The collected data on factors were analyzed using the relative important index (5 - most important and 1 - least important rankings). The study identified Deterministic approach (percentage addition) as the most widely known and used method by the construction experts in making provision for contingency. Unexpected ground conditions (substructure works), design consideration, project duration and project specification have also emerged as the most influencing factors.
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