Evaluating the direct and indirect costs of rework in construction

Abstract

Purpose of this paper This paper investigates the potential for compromise in quality as a consequence of direct and indirect costs associated with undertaking rework in a construction project. Design/methodology/approach A literature review was conducted on direct and indirect cost of rework and associated waste. A quantitative approach was adopted and data was collected via a questionnaire survey targeting purposively selected construction professionals in the Cape Peninsula metropolitan area. Descriptive (mean) and inferential (One way analysis) statistics were used to analyse the data. Findings A total of 78 firms participated in this study. It was found that the mean of direct and indirect costs of rework were 2.93% and 2.20% of the contract value respectively. In addition, it was established that the majority of the respondents do not always have systems in place for tracking and recording the incidence of rework and its cost impact, especially the indirect costs. The study also revealed that there are significant differences between respondents’ estimates for direct rework costs. The study revealed no significant difference between respondents’ estimates for indirect rework cost. Originality/value of paper To reduce these costs and therefore improve overall project performance, it is posited that design and construction organisations must improve their quality management practices by introducing a tracking mechanism for continuously quantifying the direct and indirect costs of rework, so that an understanding of their magnitude can be captured and effective containment strategies implemented.