Effect of Cost Estimation on Project Performance in Construction Firms in Abuja

Abstract

Adverse profitability in the construction industry is associated with the organizational leaders’ inability to accurately estimate project costs and manage project schedules. This results to high rate of abandoned project and building, to be able to boost of successful completed projects, effective and efficient cost estimation and planning is the very key. The study investigated the effect of cost estimation on project performance in construction firms in Abuja. The objectives of the study are; To determine the effect of bottom up cost estimating and parametric cost estimating on the realization of work scope / specifications in construction firms in Abuja, To assess the impact of bottom up cost estimating and parametric cost estimating on time / schedule performance in construction firms in Abuja, To ascertain the impact of bottom up cost estimating and parametric cost estimating on cost performance in construction firms in Abuja. The researcher adopted the descriptive research design and structured questionnaire was used as instrument for data collection. The purposive sampling technique was adopted in the study. Data analysis was committed to descriptive statistics of mean and percentages as well as inferential statistics of correlation and multiple regression analysis. The results showed that both bottom-up estimation and parametric cost estimating are both positively and significantly influenced by scope/specifications, time/schedule and cost. The study concludes that project managers need to be cognizant of this relationship and focus on developing estimates and schedules using modern project management tools that would project accurate costs and schedules. It was recommended that for successful completion of projects, construction project managers should be fully abreast of cost estimating techniques through intensive training awareness and the use of both bottom up and parametric estimating techniques be adopted for construction projects as appropriate.