Cost overrun in construction project: factor and impact

Cost overruns in construction projects are a significant concern for the industry, often resulting in financial strain and project delays. Cost overruns need to be restrained in construction project so that the problem of financial tension can be resolved. The three objectives of the research are (1) to identify critical factor of cost overrun in construction project, (2) to determine the positive and negative impact of cost overrun in construction project, (3) to determine the best solution that occur to overcome cost overrun in construction project. This research aims to identify the critical factors contributing to cost overruns in construction projects and propose solutions to mitigate these issues. The research employed a quantitative methodology, involving a questionnaire survey distributed to 317 respondents from Contractor G7 in Kuala Lumpur. The data was analyzed using SPSS software and the findings were presented in the form of tables and charts. The research found that changes in project scope were the most significant factor contributing to cost overruns, followed by delays in project completion, and insufficient planning. The results also highlighted the importance of regular supplier/subcontractor evaluation, performance-based contracts, and prequalification and selection criteria in managing and collaborating with suppliers and subcontractors. The research concludes that effective cost management in construction projects requires a comprehensive understanding of the factors contributing to cost overruns. The determine solutions include implementing performance-based contracts, conducting regular supplier evaluations and ensuring early involvement of suppliers and subcontractors in the project planning process. These findings can serve as a guideline for construction firms to prevent cost overruns.