Impact of Change Orders on Cost Overruns and Delays in Large-Scale Construction Projects
Received: 31 October 2024 | Revised: 26 November 2024 and 14 December 2024 | Accepted: 29 December 2024 | Online: 9 January 2025
Corresponding author: Jatiaryo Sidiq Ramadhan
Abstract
This study investigates the impact of Change Orders (CO) on construction project performance, focusing on cost overruns and project delays. Partial least square structural equation modeling was used to analyze the relationships between key causal factors, including design changes, planning errors, and project outcomes. Data were collected from 127 construction practitioners involved in large-scale projects managed by PT XYZ, a leading Indonesian contractor. The analysis identifies that design changes contribute to 56.5% of cost overruns and 40% of project delays, while planning errors account for 34.5% of cost overruns and 23.1% of delays. These findings highlight the critical importance of improving project planning accuracy and enhancing design management processes to reduce the adverse effects of CO. Structured protocols for managing CO, better coordination among stakeholders, and adopting advanced technologies are recommended to minimize their effect. These insights are particularly relevant for large-scale projects where CO frequently disrupt budgets and timelines. By addressing these issues, project managers can enhance overall performance and reduce risks associated with cost and time escallations. This research provides practical strategies applicable to various construction contexts, supporting more efficient project delivery and better management of CO.
Keywords:
change orders, cost overrun, project delays, PLS-SEM, design changes, planning errorsDownloads
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