Current practices in building project contract price forecasting in the UK

• Published in: Engineering, construction, and architectural management construction, and architectural management, 2005-10, Vol.12 (5), p.446-457
• Main Authors: Fortune, Chris, Cox, Owen
• Format: Article
• Language: English
• Subjects: Accuracy; Benchmarks; Construction contracts; Construction industry; Economic theory; Forecasting; Investigations; Management activities; Measurement characteristics; Measuring instruments; Prices; Pricing; Professional practice; Professionals; Project management; Studies
• ISSN: 0969-9988; 1365-232X
• DOI: 10.1108/09699980510627144

Purpose - The selection and use of the most appropriate building project contract price forecasting model contribute to the provision of strategic advice that clients can use to make value-for-money business decisions. This work seeks to provide a snapshot of current practice in model selection by practitioners based in large-sized quantity surveying, project management and multi-disciplinary practices based in the UK.Design methodology approach - A quantitative research design was used to capture data from a sample of 300 such organisations in 2004. An initial and follow-up administration of the postal survey generated an overall response of 54 per cent.Findings - The findings of the study revealed that the traditional types of forecasting model continue to be in widespread use irrespective of organisational type. Lifecycle cost models and in-house knowledge-based systems were also found to be in use, but not on such a widespread scale. Newly developed models such as artificial neural nets, fuzzy logic nets, as well as environmental and sustainability cost models were found, as yet, to have only very limited application in practice. Practitioner assessment of model accuracy and value in-use provided statistically insignificant levels of variance between the organisational types and the models found to be in use.Research limitations implications - The work is limited due to the size of the sample frame and the measuring instrument used which could not uncover reasons for the selection of particular types of models.Originality value - The outcomes of the work provide benchmarks that can be used to evaluate organisational approach and future research. The paper contributes to the body of knowledge available on the process of building project contract price forecasting that is fundamental to the assessment of project value.