Abstract
Abstract : Contingency provision on a construction project is one of the risk management techniques embraced by project owners to deal with project unanticipated expense and spending overrun. The estimation is an unavoidable issue as the amount that is incorporated into project budget cost are sometimes insufficient or higher to carter for the actual cost overrun. Hence, the objective of this study will be to determine the predominant factors considered during the planning of contingency amount, the components influencing the management of contingency and the use for contingency amount in the Gauteng province of South Africa. This study necessitated the use of primary and secondary sources. The secondary information is comprised of existing literature and materials identifying with the topic. The primary data collection method was a field survey approach that used a structured questionnaire to obtain data from programme manager, project manager, quantity surveyors, site supervisor, engineers and other professionals in the study area. Data was analysed using descriptive and inferential statistics. Mean and standard deviation values as well as principal component (from exploratory factor analysis) was then conducted. The findings from the study using the principal component method of extraction identified six factors structure that had eigenvalues greater than 1 with a total variance explained accounting for 72.934 %. These factors includes, technical determinants, expert determinants and design completeness determinants. The choice to retain was supported by the result of the scree test. On the other hand, the findings on the management of cost contingency using principal component method of extraction identified five factor structure with total variance explained accounting for 28, 17%. This findings revealed that the control of cost contingency is the project manager’s responsibility not subsystem managers such as program managers, cost planner, site supervisor and quantity surveyors. It also revealed that the approval of contingency is according to its defined purpose and the release of cost contingency is the sole responsibility of the project manager with the guidance and consent of the management board. Furthermore, the results revealed that the cost contingency is used to cater for assessed risk on a project, contingency is used to cater for project scope inadequacies and contingency is used to cater for variation on a project. Based on the identified factors meaningful conclusion were drawn regarding the planning process and management of construction contingency which will without a doubt aid as a framework in the construction industry. It will equally assist all practitioners, policymaker and professionals in the construction industry to reassess and improve on their contingency planning process.
M.Phil. (Engineering Management)