Bad Rework Costs in Projects

Rework has become an endemic feature of the procurement process in construction, which invariably leads to time and cost overruns in projects. Thus, in order to improve the performance of projects it is necessary to identify the causes and costs of rework.

The case study projects’ rework costs were found to be 3.15 per cent and 2.4 per cent of their contract value. Changes initiated by the client and end-user, as well as errors and omissions in contract documentation, were found to be the primary causes of rework. (Peter E D Love, Amrik S Sohal, 2003)

Research undertaken by Cnuddle (1991) determined the failure costs in construction by investigating the amount of nonconformances that occurred on-site. Cnuddle (1991) found non-conformance cost to be between 10 per cent and 20 per cent of the total project cost. Furthermore, it was found that 46 per cent of total deviation costs were created during design, compared to 22 per cent for construction deviations.

The Building Research Establishment in the UK (BRE, 1981) found that errors in buildings had 50 per cent of their origin in the design stage and 40 per cent in the construction stage. In 1987 the National Economic Development Office conducted a survey (NEDO, 1987), which aimed to identify ways of improving quality control in building works. It was revealed that the main factors that influenced quality were attributed to design (e.g. lack of coordination of design, unclear and missing documentation) and poor workmanship (e.g. lack of care and knowledge). A further study was undertaken again by NEDO in 1988, and these findings were almost identical to the previous year’s study.

The costs of quality deviations in civil and heavy industrial engineering projects have been found to be significantly higher. Burati et al. (1992) studied nine major engineering projects to determine the cost associated with correcting deviations to meet specified requirements. The results of their study indicated that, for all nine projects, quality deviations accounted for an average of 12.4 per cent of the contract value.

A significantly lower figure was reported by Abdul-Rahman (1995), who found non-conformance costs (excluding material wastage and head office overheads) in a highway project to be 5 per cent of the contract value. Abdul-Rahman (1995) specifically makes the points that the non-conformance costs may have been significantly higher in projects where poor quality management is implemented.

Notably, Nylen (1996) found that when poor quality management practices were implemented in a railway project, quality failures were found to be 10 per cent of the contract value. Nylen (1996) further found that 10 per cent of the quality failures that were experienced accounted for 90 per cent of their total cost. Here significant proportions of the quality failures were attributable to design-related (76 per cent) issues, such as erroneous documentation and poor communication between project team members.

According to Davis et al. (1989), without a formal systematic quality management system in place, quality deviations may not be identifiable. Consequently, information is lost and activities that need to be improved in order to reduce or eliminate rework cannot be ascertained. Similarly, the BRE (1982) in the LTK has demonstrated that significant cost benefits can be achieved by implementing a quality management system. The BRE stated that 15 per cent savings on total construction costs could be achieved through eliminating rework, and by spending more time and money on prevention. For example, additional time spent upstream by designers (architects and engineers) on co-ordinating project documentation could significantly reduce downstream quality costs during on-site production, which may ultimately improve project performance. It is proffered that learning to design quality into internal processes may enable designers to yield first time quality on a regular basis, which may reduce their rework and thus improve interorganisational processes.

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