| Abstract: | Estimating is one of the most important functions of a successful project. Accurate estimates
optimize good contracting as well as the process of calculating and analyzing all the costs
that will enter into a particular job to arrive at a set total. (Barzandeh, 2011)
This research assesses factors affecting the accuracy of cost estimation and analyzes their
effect on project management in water works design and supervision enterprise. The
implications of errors in cost estimation are discussed. Descriptive research design is
employed in this research. The financial & physical performance report of large scale
projects are also reviewed in order to assess to what level of accuracy the cost estimation is
predicted. Then the data collected through questioner are analyzed and interpreted.
The findings have indicated most of the estimated cost of the projects is either under-utilized
or over utilized which shows there is undeniable inaccuracies in the project’s cost estimation.
The most influential factors that affect the accuracy of project cost estimation identified by
this study are completeness of technical and socio economic information, work load during
estimation, Availability of adequate time for estimation and Insufficient number of estimating
staff, nonattendance of project managers in cost estimation, the effect of client on cost
estimation, financial situation and budget of client, location, site constraint, weather
condition and complexity of projects, availability of skilled labor in the market at
predetermined cost, the impact of government policies.
The conclusion that have been drawn shows that the under utilization or over utilization of
estimated project cost with large variance are seen and there is inefficiency in project
management. The wide variance between the estimated and actual cost of the projects can
make the actual profit to be different from the forecasted one with extensive gap. Therefore it
is recommended that the management of the enterprise to give more attention to the most
influential factors that affect the accuracy of projects cost estimation that are identified in this
research in order to achieve more reliable and realistic estimates. |
