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16 activities become more difficult processes to satisfy all project parameters such as
specified quantity and quality of activities, within limited time durations, and authorised budgets Sears et al., 2008.
2.3.6.2. Potential Challenges for PROCOM
These complexities of project constraints are the real potential challenge to be faced by project leadership Maznevski et al., 2007. As well as being opportunities, if the
project could be successfully completed, there would be great rewards to be gained. Project managers shoul
d understand the project‟s complexity, it‟s nature and intricate operation on site to deal with the sophistication of clients‟ and the complexity of the construction
demands CIOB, 2009, buildability of project designs Gould and Joyce, 2009, constructability of project delivery methods and techniques McDowall, 2008,
predictability of project costs Winch, 2009, and reliability of project participants on site at the frequent times and appropriate durations.
2.3.6.3. A Group of Important CSFs for PROCOM
These important factors become the group of CSFs of managing the Nature of project complexity PROCOM which should be given appropriate attention and careful
consideration, so that the improvement of the cost management and controlling practices - the CMCPs of project overheads can be achieved during the construction stage of
construction projects.
2.3.7. Improving Contractors’ Current Roles in Practice ROPRAC
2.3.7.1. Relevant Issues for ROPRAC
Overheads are described as indirect expenses for particular productions or processes Bunbury, 1931, or indirect cost items for cost objects Tatikonda and
Tatikonda, 1994. Project overheads are unclearly defined in regard to particular activities, inaccurately estimated on the percentage cost basis, and arbitrarily allocated to
construction activities. Average overheads are distributed to every activity on a direct labour basis Mansuy, 2000; and Giammalvo, 2007. Contractors‟ current roles in project
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17 practices allocate project overheads and profits of construction building cost on a
percentage addition basis RICS, 2009; and CIOB, 2009. Project overheads cannot be variably accounted in the same way as aggregating material and labour costs. They must
refer to different cost behaviours appropriate to each of them such as direct-variable, direct-fixed, and indirect-fixed Beaulieu and Mikulecky, 2008. Implications of contractor
roles in allocating overheads in practice have to reflect a detailed process of particular construction activities for the occurrence of project overheads e.g., supervision,
equipment, operators, power, etc.. These project overheads should be associated with physical building works e.g., site mobilisation, excavation, precast concrete pile, concrete
formwork, reinforced steel bar, concrete pouring, etc.. Project overheads are also influenced by many other factors such as market flux, development focus, resources,
investment, technology, project complexity, site characteristics, etc. Therefore, the contractors‟ role and current practices may need specific adjustment.
2.3.7.2. Potential Challenges for ROPRAC
Contractors are responsible for estimating accurate overheads and meeting the competitive criteria of the project tendered, and the successful bidder would have to reflect
the real construction process on site. The project overheads have to be managed and controlled appropriately generating additional profits and project benefits. The activity-
based costing system could be implemented to estimate project overheads accurately on the basis of diverse cost drivers, and distribute them to all activities in order to control and
trace project expenses clearly during the construction stage Jaya
et al.,
2010b and 2010c, instead of contractors‟ current method of cost measurement which is to add compound
overheads and profits on the basis of adding a percentage to the construction building cost arbitrarily RICS, 2009; and CIOB, 2009.
2.3.7.3. A Group of Important CSFs for ROPRAC
