Finding Significant Factors to Affect Cost Contingency on Construction Projects Using ANOVA Statistical Method -Focused on Transportation Construction Projects in the US-

  • Lhee, Sang Choon (Gyp-Hyun ENC)
  • Received : 2014.03.04
  • Accepted : 2014.05.12
  • Published : 2014.06.30


Risks, uncertainties, and associated cost overruns are critical problems for construction projects. Cost contingency is an important funding source for these unforeseen events and is included in the base estimate to help perform financially successful projects. In order to predict more accurate contingency, many empirical models using regression analysis and artificial neural network method have been proposed and showed its viability to minimize prediction errors. However, categorical factors on contingency cannot have been treated and thus considered in these empirical models since those models are able to treat only numerical factors. This paper identified potential factors on contingency in transportation construction projects and evaluated categorical factors using the one-way ANOVA statistical method. Among factors including project work type, delivery method type, contract agreement type, bid award type, letting type, and geographical location, two factors of project work type and contract agreement type were found to be statistically important on allocating cost contingency.


Cost Contingency;Construction Project;Empirical Model;Analysis of Variance (ANOVA);Categorical Factor


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