Entity-Based Investigation of Project Complexity Impact on Size and Frequency of Construction Phase Change Orders

Many large-scale construction projects suffer from issuance of construction phase change orders that ultimately leads to significant cost overruns and major scheduling delays. Researchers and practitioners have found complexity, as well as several project characteristics, to be the underlying cause of change orders. Therefore, the aim of this study was to investigate and analyze the impact of a project’s level of complexity on the value and number of change orders issued by each of the three primary stakeholders (owner, designer, and contractor) during the construction phase. To fulfill the objectives of this study, a survey questioning about the project characteristics was developed and distributed. After two follow-up emails, 44 complete survey responses were collected. Thirty were related to high complexity projects, and the rest were related to low complexity projects. The value and number of change orders dispensed during the construction phase by owners, engineers, and contractors for high and low complexity projects were studied and compared. Depending on the type of collected data, the two-sample t-test and analysis of variance (ANOVA) were utilized. Results revealed that there is a significant difference between the number of change orders issued for low and high complexity projects. Owner and contractor stakeholders issued significantly more change orders for high complexity projects than for low complexity ones during the same phase. Further investigation showed that for high complexity projects, the owner stakeholder derived the maximum value for a minimum number of change orders. For low complexity projects, the contractor stakeholder derived the maximum number and value of change orders. Finally, the impact of the complexity indicators on change order types (scope creep and rework) in complex projects was studied. The results revealed that the three primary determining indicators leading to issuance of scope creep and rework change orders in complex projects are directly related to the total number of joint venture partners in a project, the number of funding phases from concept to project completion, and the number of executive oversight entities above the project management level. The intent of this paper is to help project managers (PMs) accurately estimate the value and number of change orders derived by each of the three types of stakeholders, and to predict the behavior of complexity indicators on the issuance of scope creep and/or rework change orders at an early stage of a project. This would assist PMs to plan proactively to prevent change orders and related financial contingencies.