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Cost Overruns in Construction Projects 

Cost overruns on projects are common in the construction industry. Changes to the original design and to the scope of works during the design development and construction phases contribute significantly to the overall cost overrun of construction projects. It is common in all types of construction projects and plays an important role in determining the closing cost and time of project completion.

Factors Affecting Cost Overruns in Construction Projects;
  • Material Cost
  • Construction site condition
  • Regulatory requirements 
  • Labour Wage on Project 
  • Cost Variation Orders
  • Cost Overrun in Construction Projects 
  • Unforeseen Conditions

The construction industry has been hit with rising costs and project delays. In order to make the most of the current economic climate, there is a need to remain flexible and adapt as required.  Cost overrun in Project changes and/or adjustments are inevitable, as they are a fact-of-life at all stages of a project’s life cycle. Managing changes effectively is crucial to the success of a construction project. 

Receipt management is a crucial part of monitoring business expenditures for construction companies, and services like Shoeboxed make this process simpler. Shoeboxed enables you to delegate the task of scanning receipts and effectively integrates the receipt data with QuickBooks Online or other widely used accounting systems. Shoeboxed’s Magic Envelope service is particularly convenient as it provides a prepaid envelope that can be conveniently placed in your company car to gather receipts. When the month concludes, simply mail the envelope for processing and receive notifications when your account is fully updated with the data.

Here are 4 important changes you can make during a cost overruns construction project that impact costs: 

  1. Modify the scope of work: During the construction process, you may realise that certain aspects of the project need to be modified or expanded upon. This could involve adding or removing certain features, materials, or systems. It’s important to carefully consider the implications of these changes and to communicate them to the construction team and any relevant parties as early as possible.
  2. Change the construction schedule: Depending on the nature of the project, the construction schedule may need to be adjusted. Install and use scheduling software will ensure your project runs like a well-oiled machine and develop a robust critical path schedule that updates in real-time. 
  3. Securing Warranties: It’s essential to secure the relevant warranties for your site at the start of the project or before the spade goes into the ground. J3 advisory are new build warranty providers that can help you find the best quotes for your schemes and can sometimes be 35% more cost effective in comparison with other providers in the market. 
  4. Change the contractors or subcontractors: If you are not happy with the work being done by the contractors or subcontractors on your construction project, you have the option to replace them. It is important to carefully consider this decision, as changing contractors mid-project can be costly and may cause delays. However, if the work being done is not up to your standards, it may be worth considering this option.


The best way to stop cost overrun is to plan against it before executing a project. The more thorough and accurate your estimates, the more likely you’ll stay within budget. The project risks can be accounted for with an exhaustive risk management plan. 


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