A Comparative Case Study to Evaluate the Impact of the Formal Pre-Planning Phase on Risk Management Efforts by Contractor’s Team

It has become widely understood throughout the construction industry that a direct linear relationship exists between project cost overruns and schedule delays. Much of this relationship is a product of identifiable risks encountered due to issues resulting from contractor’s capabilities, owner’s change in scope, designer’s caused errors and omissions, and unforeseen conditions. On behalf of this study, 2,195 construction, renovation, and repair projects were analyzed among two large public organizations, which occurred from 2005 to 2012. Despite the industry's recognition of inherent risk and its subsequent impact, the research associated with understanding of correlation between project delay rate and change order rate is vastly limited; hence, the research team evaluated the magnitude of correlation between the project performance parameters to quantify the risk management efforts by the contractor’s team. The primary objective of this paper is motivated by the notion that formal pre-planning phase is a critical element in an owner's ability to enhance the risk management efforts by contractor’s team to mitigate the impact of encountered risks. Specifically, Pearson’s correlation test helped to identify the sensitive risk source categories and sub-categories among the two owners to compare the effect of the formal pre-planning phase on risk mitigation.