See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/309167373

Analysis of change orders in Qatari construction projects

Article  in  International Journal of Construction Management · October 2017

DOI: 10.1080/15623599.2016.1211973

CITATION READS

1 303

4 authors, including:

Ahmed Senouci Ahmed Alsarraj

University of Houston Hamad bin Khalifa University
90 PUBLICATIONS   1,221 CITATIONS    1 PUBLICATION   1 CITATION   

SEE PROFILE SEE PROFILE

Murat Gunduz
Qatar University
67 PUBLICATIONS   447 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Safety Performance Measurement View project

project schedule optimization models View project

All content following this page was uploaded by Ahmed Senouci on 10 November 2016.

The user has requested enhancement of the downloaded file.

 International Journal of Construction Management

ISSN: 1562-3599 (Print) 2331-2327 (Online) Journal homepage: http://www.tandfonline.com/loi/tjcm20

Analysis of change orders in Qatari construction

projects

Ahmed Senouci , Ahmed Alsarraj , Murat Gunduz & Neil Eldin

To cite this article: Ahmed Senouci , Ahmed Alsarraj , Murat Gunduz & Neil Eldin (2016):
Analysis of change orders in Qatari construction projects, International Journal of Construction
Management, DOI: 10.1080/15623599.2016.1211973

To link to this article: http://dx.doi.org/10.1080/15623599.2016.1211973

Published online: 14 Oct 2016.

Submit your article to this journal

Article views: 6

View related articles

View Crossmark data

Full Terms & Conditions of access and use can be found at

http://www.tandfonline.com/action/journalInformation?journalCode=tjcm20

Download by: [University of Houston], [Dr Ahmed Senouci] Date: 17 October 2016, At: 07:10
International Journal of Construction Management, 2016
http://dx.doi.org/10.1080/15623599.2016.1211973

Analysis of change orders in Qatari construction projects

a
Ahmed Senouci *, Ahmed Alsarrajb, Murat Gunduzc and Neil Eldin d

a
Associate Professor, Construction Management Department, University of Houston, Houston, United States; bMaintenance Engineer,
Electricity Network Affairs, Qatar General Electricity and Water Corporation, Doha, Qatar; cProfessor, Civil and Architectural
Engineering Department, Qatar University, Doha, Qatar; dProfessor and Interim Dean, College of Technology, University of Houston,
Houston, Texas, United States

Change orders affect the performance of construction projects and may induce significant cost overruns. The paper
identifies the main causes/factors that lead to change orders in Qatari construction projects. It also quantifies the cost
overrun impact of these change orders in Qatari construction projects. A total of 1122 change orders were collected from
22 Qatari residential and commercial construction projects. The collected data was analyzed using statistical methods such
as Pearson correlation and analysis of variance (ANOVA). The analysis results were used to quantify the change order
impacts on cost overruns in Qatari construction projects. Regression analysis models were also developed to predict
change order cost overruns with respect to project size/contract value. Finally, recommendations were developed to
address change order impacts on cost overruns in the Qatari construction industry.
Keywords: change orders; Qatari construction industry; ANOVA, cost overruns; change order causal factors

Introduction
The construction industry is one of the largest industries in the world. Developing countries allocate a significant portion of
their annual budgets to the construction sector. Qatar has experienced a high rate of economic growth and urban development
in the last two decades. The growth rate of its gross domestic product (GDP) is currently among the fastest in the world. The
Qatari construction industry budget is expected to double to reach US $15 billion per year by 2021 (ECHarris 2013). To
host the 2022 World Cup, Qatar plans to invest billions of US dollars in infrastructure projects such as a new airport, a rail-
way network, nine stadiums, hotels, and highways. Moreover, residential, commercial, and office buildings are being built to
accommodate the large number of foreign companies and workers brought to complete these infrastructure projects.
A change order, which is usually an alteration in the construction project scope, may have a significant impact on cost,
time, safety, labor productivity, and work quality. Moreover, the impacts of these change orders on Qatari construction
projects are still not well quantified. Delays and cost overruns have occurred in several major Qatari construction projects
such as the new Doha airport and Musheireb. Thus, the study of the impact of change orders on Qatari construction proj-
ects is timely and worthwhile.
This paper identifies the main causes/factors of change orders in the Qatari construction industry. It also quantifies the
impact of these change orders on cost overruns. Regression analysis models were also developed to predict change order
cost overruns with respect to project size/contract value. Finally, recommendations were developed for the construction
industry to reduce the cost impacts of change orders.

Literature review
An extensive literature review was performed to identify the major factors causing change orders in building construction
projects. Change order impacts on cost overruns were also analyzed and quantified.

Change order causal factors

Change orders can lead to cost and schedule overruns. A change order occurs when there is a change in the original work
scope. Most common change orders are due to: (1) scope change or creep, (2) changes to product/service specifications,
(3) errors and omissions in project drawings, (4) unexpected site condition variations, (5) delays in the procurement and
manufacture of deliverables, (6) force majeure, and (7) defective or delayed owner-furnished materials (OFM) (Al-Najjar
2008; Alnuaimi et al. 2010; Egan et al. 2012; Abdul Rahman et al. 2013).

*Corresponding author. Email: asenouci@uh.edu.

Ó 2016 Informa UK Limited, trading as Taylor & Francis Group

2 A. Senouci et al.

Table 1. Major change order causal factors for Qatari construction projects.

No. Causal factors References

1 Design errors (Egan et al. 2012)

2 Inconsistencies in design (Egan et al. 2012)
3 Change in design request (Ismail et al, 2012)
4 Inadequate design (Al-Dubaisi 2000)
5 Noncompliance of design with owner’s requirements (Egan et al. 2012)
6 Specified material became unavailable (Al-Najjar 2008)
7 Significant changes in the quantities of work (Al-Dubaisi 2000)
8 Plan errors (Serdar et al. 2012)
9 Change of plans or scope by owner (Ismail et al. 2012)
10 Owner dissatisfaction (Mahamid et al. 2013)
11 Differing site conditions (Alnuaimi et al. 2010)
12 Suggestions to initiate more quality (Ismail et al. 2012)
13 Delays in the project (Al-Najjar 2008)
14 Consultant’s lack of judgment and experience (Ismail et al. 2012)
15 Contractor’s lack of judgment and experience (Ismail et al. 2012)
16 Utility companies (Al-Dubaisi 2000)
17 Local governments (Al-Dubaisi 2000)
18 User needs (Al-Dubaisi 2000)
19 Mechanical and electrical provision (Yehiel 2014)
20 Technology changes (Al-Dubaisi 2000)
21 Safety considerations (Al-Dubaisi 2000)

Major factors causing change orders in Qatari construction projects

The literature review identified a total of 21 factors that cause change orders in Qatari construction projects (Table 1).

Change order impact on cost overruns

Hanna and Gunduz (2005) studied change order impacts on labor productivity in small, medium, and large projects. Ques-
tionnaire surveys were prepared and distributed among professionals in electrical and mechanical construction industries
because of their labor-intensive requirements. To quantify labor productivity, the term Delta was used to represent the differ-
ence between the actual hours spent on the project and the estimated base hours plus the change order hours. It is worth not-
ing that impacted and non-impacted projects are characterized by positive and negative delta values, respectively. The
projects with large change rate percentage toward their ends were more impacted. Analysis of variance (ANOVA) was con-
ducted for each variable to compare the statistical differences between impacted and non-impacted projects. Eshofonie et al.
(2008) studied cost overruns in Nigeria. Questionnaires were prepared and distributed among 16 owners, 22 consultants, and
32 contractors. The analysis of the questionnaire results showed that the most important factor causing cost overruns is the
cost of materials. Al-Jurf et al. (2010) studied the cost overrun causes in the Qatari residential construction industry. A ques-
tionnaire was sent to contractors specializing in building and maintenance work. The questionnaire results were validated by
face-to-face interviews with the respondents. Causal factors were gathered through a literature review. The significance of
the causal factors in the local market was analyzed. The causal factors were ranked based on: (1) overall importance index,
(2) cost and schedule, (3) pre-construction importance and construction stages, and (4) project size and duration. The authors
identified the following cost overrun causal factors ranked based on their overall importance: (1) price hikes of basic materi-
als in the local market, (2) change of other material prices in the local market, (3) inflation, (4) procurement cost for materi-
als imported into the country, (5) pressure from owners on contractors to reduce contract prices, (6) delays on the part of
subcontractors and nominated suppliers, (7) work orders, (8) design deviations, (9) planning and scheduling changes or defi-
ciencies, and (10) ineffective construction methods. Serdar et al. (2012) summarized the most significant cost overrun factors
for cost overruns in Turkish residential construction projects using the Relative Importance Index (RII).
Abdul Rahman et al. (2013) studied the factors causing cost overruns in the Malaysian construction industry. They
prepared and distributed questionnaire surveys among contractors, consultants, and clients having more than five years of work
experience. The authors reported the following significant causal factors: (1) material price fluctuations, (2) contractor cash
 International Journal of Construction Management 3

flow and financial problems, and (3) inefficient site management. Yehiel (2014) performed a root-cause analysis on cost over-
run factors in general, considering about 146 factors mentioned in the literature. The author used ‘event analysis’ to identify
root causes that triggers cost overruns. He reported 15 universal root causes out of the 146 factors initially considered. Du
et al. (2015) present an object-oriented discrete event simulation (DES) model to investigate the change order management
process. A case study has been performed to investigate the change order management process at a Midwestern land-grant uni-
versity with the proposed simulation model, where the bottlenecks of as-is process have been identified and improved.

Data analysis
The data for 1122 change orders was collected from 22 construction projects in Qatar (i.e., 11 residential and 11 commer-
cial). The change orders were issued in the design and construction phases. The change order data included the following
information: description, specialty or trade, project stage (e.g., design or construction phases), and the party responsible
for it. Moreover, it included the percent cost overruns as shown in Table 2. The percent cost overrun was computed using
the following equation:

Project cost after change order
Project original contract value

Cost Overrun D £100% (1)
Project original contract value

The change orders were arranged into the following specialty/ trade categories:

 Civil: construction work (i.e., walls, beams, excavation, road works, concreting, ducting, etc.).
 Design: design work (i.e., drawings, specifications, etc.)

Table 2. Project cost overrun summary.

ID Project type Project value (QR) Cost overrun (QR) Final project value (QR) Cost overrun (%)

1 Commercial 139,169,727 18,760,340 157,930,067 13.48

2 Residential 23,089,179 1,677,947 24,767,126 7.27
3 Residential 91,810,138 21,409,552 113,219,690 23.32
4 Residential 9,082,534 87,712 9,170,246 0.97
5 Commercial 28,500,000 359,921 28,859,921 1.26
6 Commercial 44,215,115 406,731 44,621,846 0.92
7 Residential 88,435,781 101,511,930 189,947,711 114.79
8 Residential 151,000,000 8,008,624 159,008,624 5.30
9 Residential 245,000,000 21,673,623 266,673,623 8.85
10 Commercial 185,000,000 14,601,307 199,601,307 7.89
11 Commercial 278,950,000 34,861,894 313,811,894 12.50
12 Residential 49,400,000 4,660,848 54,060,848 9.43
13 Commercial 6,541,250 23,487 6,564,737 0.36
14 Residential 158,000,000 26,325,095 184,325,095 16.66
15 Commercial 22,639,414 2,872,631 25,512,045 12.69
16 Commercial 81,631,412 761,191 82,392,603 0.93
17 Residential 19,212,093 358,527 19,570,620 1.87
18 Commercial 64,873,781 1,990,041 66,863,822 3.07
19 Residential 6,765,000 268,476 7,033,476 3.97
20 Residential 50,439,823 23,847,697 74,287,520 47.28
21 Commercial 62,175,940 22,907,322 85,083,262 36.84
22 Commercial 478,032,233 43,376 478,075,609 0.01
Average 63,524,860 3,766,740 78,340,062 7.58
Minimum 6,541,250 23,487 6,564,737 0.01
Maximum 478,032,233 101,511,930 478,075,609 114.79
Total 2,283,963,419 307,418,273 2,591,381,692 13.46
4 A. Senouci et al.

 Finishes: internal construction work (i.e., doors, windows framing, painting, kitchen and toilet, etc.)
 Mechanical, electrical and plumbing (MEP): HVAC, water supply, and electrical wiring.

The parties that cause change orders were defined as owners, contractors, and design consultants.

Impact of change order causal factors on cost overruns

As previously mentioned, a total of 21 factors were identified to cause change orders with varying impact strength. Using
the collected data, each change order item was linked to a causal factor. The cost increase due to each causal factor (21
causal factors in total) was obtained by adding the cost increase of the corresponding change order item in each project (22
projects in total). The average percentage cost increase of each causal factor over the 22 projects was also calculated. This
technique was used to rank the factors. It was found that the factor ‘change in plans and scope by owner’ was the one that
caused the highest percent cost increase percentage (i.e., 16.6%). This shows that a project scope change by the owner dur-
ing the construction phase has the highest impact on cost overruns in Qatari construction projects.
The causal factors ‘differing site conditions’ and ‘contractor’s lack of experience’ were ranked second and third with
an average percent cost increase of 10.9% and 10.8%, respectively. On the other hand, the causal factor ‘local gov-
ernment’s new rules’ was ranked fourth with an average percent cost increase of 8.8%. It is worth mentioning that the new
fire protection regulations set by the Qatari Civil Defense authority increased the number of change orders. The causal fac-
tor ‘unavailability of specified material’ was ranked fifth with an average percent cost increase of 8.4%.
This is due to the fact that the specified materials in construction contracts are usually not found in the market because
they are usually selected from older projects. Table 3 summarizes the ranking of the causal factors.

Impact of change orders in different project stages on cost overruns

Construction projects consist of three main phases, namely design, construction, and commissioning. A change order item
can happen during one of these three phases. The percent cost increases due to change orders in the design and construction
phases were 54.16 and 45.84%, respectively. These results also show that scope changes made during the construction

Table 3. Change order causal factor cost overrun impacts.

Factor description Average cost

increase (%)
Change of plans or scope by owner 16.64
Differing site conditions 10.96
Contractor’s lack of judgment and experience 10.82
Local governments 8.80
Specified material became unavailable 8.42
User needs 8.08
Suggestions to initiate more quality 7.45
Change in design request 6.28
Owner dissatisfaction 5.19
Inadequate design 5.08
Utility companies 3.54
Inconsistencies 2.66
Significant changes in the quantities of work 1.34
Mechanical and electrical provision 1.15
Consultant’s lack of judgment and experience 1.15
Noncompliance of design with owner’s requirements 0.87
Design errors 0.78
Plan errors 0.38
Technology changes 0.27
Delays in the project 0.14
Safety considerations 0.02
 International Journal of Construction Management 5

phase cost more than those made during the design phase. The changes in the regulations and rules made by the Qatari
Civil Defense authority also contributed to the results.

Impact of change orders in different construction categories on cost overruns

The collected data included change order items classified in four major categories. The first category is concerned with
design and documentation work including changes in bond values and contractual work. The second category includes all
civil work (i.e., geotechnical and structural work). The third category includes all electrical, water supply, air conditioning,
and plumbing (MEP) work. Finally, the fourth category includes all finish work (e.g., cladding, painting, ceramic floors
and walls, doors, windows, etc.).
The average percent cost increases were calculated the same way for project phases. Change order items belong to one
of the four categories (i.e., design, civil, MEP, or finishes). The cost increase in each category for each project was com-
puted by adding the cost increase of the change order items that belong to that category. The percent cost increase for each
category for each project was obtained by dividing the cost increase of that category with the summation of the cost
increases in all categories. Finally, the average percent cost increase for the civil, MEP, finishes, and design were equal to
42.90, 26.29, 25.78, and 4.28%, respectively. The results show that a change order in civil work had the highest cost
increase impact compared to the other categories. On the other hand, the results show that a change order in design work
had the lowest cost increase impact compared to the other categories. The civil work category had the highest percentage,
representing 42.9% of the total cost increase. This is due to the high cost impact of change orders in civil work. MEP and
finish categories had the second highest percentage of around 25%. Finally, the design category had the lowest percentage
representing 4.28% of the total cost increase.

Impact of change orders by construction stakeholders on cost overruns

The owner, contractors, and consultants are stakeholders in construction projects. Change order items were classified based
on the stakeholder who caused them. Change order items were caused by one of the three parties (i.e., owner, contractor, or
consultant). The cost increase caused by each party in each project was computed by adding the cost increase of the change
order items that are caused by that party. The percent cost increase caused by each party in each project was obtained by
dividing the cost increase caused by that party by the summation of the cost increases caused by all parties. Finally, the
average percent cost increase caused by owners, contractors, and consultants were found to be equal to 44.79, 36.68, and
18.53%, respectively. The results show that a change order caused by an owner had the highest cost increase impact com-
pared to the other parties. On the other hand, the results show that a change order caused by the consultant had the lowest
cost increase impact compared to the other parties.

Pearson’s correlation coefficient analysis

The correlation coefficient (r) evaluates the weakness or strength of a linear relationship between two variables. The value
of r varies between C1 and ¡1. The closer the r value is to 1, the stronger is the relationship between the two variables.
The correlation coefficient analysis was used to measure the importance of the factors causing change orders with respect
to the project budget size. As mentioned previously, a total of 21 factors were identified to cause most change orders. The
correlation coefficients were calculated for the factors with respect to the percentage change of the project cost. Table 4
summarizes the correlation coefficients for the 21 factors causing change orders. Table 5 summarizes the ranking of the
factor correlations to cost increases. The highly correlated factors are design errors, change in design request, inadequate
design, changes in quantity of work, plan errors, change of scope by the owner, differing site conditions, utility companies,
and mechanical and electrical provisions.
The highly correlated factors are as follows:

 Design errors
 Changes in design request
 Inadequate design
 Significant changes in quantity of work
 Change of plan or scope by owner
 Differing site conditions
 Utility companies
 Mechanical and electrical provisions
6 A. Senouci et al.

Table 4. Change order causing factor correlation coefficients.

Factor description Pearson’s correlation coefficient

Design errors 0.8868

Inconsistencies ¡0.1699
Change in design request 0.7716
Inadequate design 0.8098
Noncompliance of design with owner’s requirements 0.3074
Material unavailability 0.2210
Significant changes in the quantities of work 0.8661
Plan errors 0.7432
Change of plans or scope by owner 0.9473
Owner dissatisfaction 0.3235
Differing site conditions 0.5352
Suggestions to initiate more quality 0.4679
Delays in the project ¡0.0634
Consultant’s lack of judgment and experience 0.0028
Contractor’s lack of judgment and experience ¡0.1396
Utility companies 0.5555
Local governments 0.0124
User needs 0.3798
Mechanical and electrical provision 0.8592
Technology changes 0.1112
Safety considerations 0.2019

Table 5. Change order causal factor correlation coefficients.

Pearson’s coefficient Correlation Causal factors

¡0.5 r 0.5 High 1,3,4,7,8,9,11,16,19

¡0.3  r  0.3 Medium 5,6,10,12,18,21
¡0.1 r  0.1 Low 2,13,14,15,17,20

The medium correlated factors are as follows:

 Non-compliance of design with owner’s requirements

 Specified material became unavailable
 Owner dissatisfaction
 Suggestions to initiate more quality
 User needs
 Safety conditions

ANOVA single-factor test

A statistical analysis was used to compare the means of the different groups of change order variables cost increase with
respect to the project size. Single-factor analysis of variance (ANOVA) was used to study the similarity significance
between the different categories and groups. A confidence level of 95% (i.e., alpha level of 0.05) was selected for the anal-
ysis. The ANOVA assumes a null hypothesis, which denotes that the means of the compared groups are statistically equal.
The assumptions of the ANOVA are listed below:
H0: The means of population or groups are equal, or m1 D m2.
H1: The means of population or groups are not all equal, or m1 6¼ m2.
 International Journal of Construction Management 7

Table 6. Analysis of variance (ANOVA) results.

Analysis Variables Mean Variance F-Value P-Value F-critical ANOVA result Conclusion

Project phase Construction 0.55 0.13 0.81 0.37 4.07 F < F-critical null Similar sample means
Design 0.45 0.13 hypothesis is accepted
Causal party Consultant 0.1853 0.0346 5.1745 0.0281 6.0727 F > F-critical null Sample means not similar
Contractor 0.3668 0.1057 hypothesis is rejected
Owner 0.4479 0.1270 9.3873 0.0038 4.0727 F > F-critical null Sample means not similar
Consultant 0.1853 0.0346 hypothesis is rejected
Contractor 0.3668 0.1056 0.6214 0.4350 4.0727 F < F-critical null Similar sample means
Owner 0.4479 0.1270 hypothesis is accepted
Construction Civil 0.4294 0.1910 16.0649 0.0002 4.0727 F > F-critical null Sample means not similar
trade Design 0.0429 0.0134 hypothesis is rejected
Civil 0.4294 0.1911 1.9136 0.1739 4.0727 F < F-critical null Similar sample means
Finishes 0.2583 0.1455 hypothesis is accepted
Civil 0.4294 0.1911 1.7479 0.1933 4.0727 F < F-critical null Similar sample means
MEP 0.2694 0.1309 hypothesis is accepted
Design 0.0429 0.0135 6.4219 0.0151 4.0727 F > F-critical null Sample means not similar
Finishes 0.2583 0.1455 hypothesis is rejected
Design 0.0429 0.0135 7.8189 0.0078 4.0727 F > F-critical null Sample means not similar
MEP 0.2694 0.1309 hypothesis is rejected
Finishes 0.2583 0.1456 0.0099 0.9213 4.0727 F < F-critical null Similar sample means
MEP 0.2694 0.1309 hypothesis is accepted

MEP: mechanical, electrical, and plumbing.

If the F-value is greater than the F-critical-value and the P-value is less than 0.05, then null hypothesis is rejected. This
means that the group variances are not equal and a significant difference exists between them. If the F-value is less than
the F-critical-value and the P-value is greater than 0.05, then the null hypothesis is accepted. This means that the group
variances are equal and no significant difference exists between them. The following groups were used in the ANOVA:
(1) project stage (i.e., design or construction), (2) change order causal party (i.e., owner, contractor, or consultant), and
(3) construction category (i.e., civil, design, MEP, or finishes).
Table 6 summarizes the ANOVA results. The analysis results show the following findings:

(1) The cost impact of change orders in the construction phase was higher than that in the design phase and the means
were statistically similar.
(2) The cost impact of change orders caused by the contractor was higher than that caused by the consultant and the
means were statistically different.
(3) The cost impact of change orders caused by the owner was higher than that caused by the consultant and the
means were statistically different.
(4) The cost impact of change orders caused by the owner is higher than that caused by the contractor and the means
were statistically equal.
(5) The change orders in the civil work category had a higher cost impact than those in the design category and the
means were statistically different.
(6) The change orders in the civil work category had a higher cost impact than those in the finishes category and the
means were statistically similar.
(7) The change orders in the civil work category have a higher cost impact than those in the MEP category and the
means were statistically similar.
(8) The change orders in the finishes category had a higher cost impact than those in the design category and the
means were also statistically different.
(9) The change orders in the MEP category had a higher cost impact than those in the design category and the means
were also statistically different.
(10) The change orders in the finishes category had a higher cost impact than those in the MEP category and the means
were statistically similar.
8 A. Senouci et al.

Table 7. Project cost overrun percentage.

Project value (QR) Cost overrun (%)

6,541,250 4.55
6,765,000 2.42
9,082,534 1.98
19,212,093 0.94
22,639,414 9.04
23,089,179 0.58
28,500,000 7.75
44,215,115 8.17
49,400,000 3.77
50,439,823 24.1
62,175,940 23.17
64,873,781 1.16
81,631,412 4.24
88,435,781 77.77
91,810,138 32.43
139,169,727 11.62
151,000,000 3.48
158,000,000 10.05
185,000,000 9.67
245,000,000 13.74
278,950,000 22.98
478,032,233 3.02

Regression analysis
Regression analysis was used to find a relationship between cost overruns and project contract values/sizes. Moreover,
relationships between different change order groups and project costs were also found. The project size and cost overrun
were selected as the independent and dependent variables in this research, respectively. If a high value of R2 could not be
obtained, the project cost can be divided into several ranges. All scattered data was plotted in one chart. Then, the outliers,
if any, were removed. The contract cost varies between 6 and 280 million QAR (Qatari Riyals) (1 US$ D 3.65 QAR).
Table 7 summarizes the cost overrun percentage in each project. Figure 1 shows the variation of the percent cost overrun
versus the project contract value. The regression analysis yielded a very low R2 value. Figure 2 shows the cost overrun
regression model after removing the outliers marked as triangular shape in Figure 1. The regression model also yielded a
very low R2 value of 0.159. To improve the regression analysis results, two ranges for the project value were considered
as follows.
1 – Project values between 0 and 100 million Qatari Riyals:
The regression analysis yielded an R2 value of 0.34. The rate of cost overrun increase is 0.2% per one million Qatari
Riyal increase in the project value (Figure 3).
2 – Project values between 100 and 300 million Qatari Riyals:
The regression analysis yielded an R2 value of 0.68. The rate of cost overrun increase is 0.09% per million QAR
increase in project value. This is lower than the rate in the first interval which is 0.2%. It shows that the rate of increment
of cost overrun is higher if the project size is between (100–300 million) (Figure 4).

Discussion of results
The purpose of the ANOVA was to determine whether the means of the different groups of construction projects were sim-
ilar. First, the project phases (i.e., construction or design) were compared. The analysis results showed that the cost overrun
means in both phases behaved in a similar way. This is because the design errors and revisions may have caused more cost
 International Journal of Construction Management 9

Figure 1. Cost overrun regression model.

overruns than change orders during the construction phase and vice versa. Although the construction phase cost overruns
are slightly higher, errors in the design can generate change orders with cost overruns as high as those in the construction
phase. For example, plan revisions caused more than 85% of the cost overruns in project 15.
The cost impacts of the change orders that were caused by the construction stakeholders (i.e., owner, consultant, and
contractor) were also analyzed. It was found that the means of cost overruns caused by the contractor and the consultant
were statistically similar. This is due to the fact that change orders are mainly due to an owner change of scope or a con-
tractor attempt to increase project profits. The results show that on average more than 80% of cost overruns are caused by
either the owner or contractor. Thus, the means of cost overruns of the consultant is different than those of the owner and
contractor. We can conclude that owners and contractors should make efforts to avoid change orders.

Figure 2. Cost overrun regression model without outliers.

10 A. Senouci et al.

Figure 3. Cost overrun regression model (contract values between 0 and 100 million QR).

The results showed that change orders in the civil, MEP and finish work categories are statistically similar. This is
because removal and reconstruction of civil or MEP work will cost more than design changes. The new requirements and
regulations set by the Qatari Civil Defense authority have also increased cost overruns with a higher rate.
The results also showed that civil work changes did cost more on average than MEP and finish work. Change orders in
the civil work caused 42% of the project cost overrun. Therefore, it is recommended to take all necessary precautions to
avoid change orders before starting the construction process.

Figure 4. Cost overrun regression model (contract values between 100 and 300 million QR).
 International Journal of Construction Management 11

The Pearson’s correlation coefficient analysis was used to find the strength of the relationship between a project cost
overrun and the causal factors. The factors strongly related to the increase in project cost were: (1) design errors, (2)
changes in design request, (3) significant changes in quantity of work, (4) change of plan or scope by owner, (5) differing
site conditions, (6) utility companies, and (7) mechanical and electrical provisions.
Design errors and changes in design request were usually associated with high cost overruns because they will lead to
work repetition and reconstruction activities. Significant changes in the work quantity and scope changes by the owner are
common problems in the Qatari construction industry. Thus, they were highly correlated with project cost overruns.
The new rules and requirements set by the Qatar Civil Defense authority generated a high number of change orders.
Many projects were already in the construction phase when the new rules were issued. Thus, electrical and mechanical pro-
visions were highly correlated with cost overrun. This can be seen in projects 4 and 19 where they caused more than 90%
of cost overruns.

Conclusions
This paper investigated the impact of change orders on cost overruns in Qatari construction projects. An extensive litera-
ture review was conducted to determine the main factors that cause change orders and cost overruns. The change order
data, which was collected from 22 Qatari construction projects, was analyzed using Pearson’s correlation coefficient, sin-
gle-factor ANOVA, and linear regression. The research identified a total of 21 factors that cause change orders in Qatari
construction projects. Pearson’s correlation coefficient method was used to analyze the relationship between the causal fac-
tors of change orders and project cost overruns. The analysis showed that the following causal factors had the highest cor-
relation: (1) design errors, (2) changes in design request, (3) significant changes in quantity of work, (4) change of plan or
scope by owner, (5) differing site conditions, (6) utility companies, and (7) mechanical and electrical provisions. The
ANOVA showed that change orders in the design stage had a similar cost overrun impact to those in the construction
phase. The analysis also showed that the project owner is the main causal party of change orders in Qatar. This is due to
the owner’s frequent changes of project scope and requirements. Differing site conditions and lack of experience of con-
tractors were major causal factors of change orders in Qatar. Moreover, the analysis showed that change orders of the civil
category had the largest impact on cost overruns.
Recommendations to reduce the impact of the major causal factors on change orders and cost overruns are listed below.

(1) Design errors and changes in design requests:

a. Owner:
i. Assign qualified staff to the project during the feasibility and design phases.
ii. Hire a knowledgeable design office.
iii. Hire a design consultant to supervise the design work.
iv. Involve construction professionals early in the design process.
b. Design office:
i. Hire knowledgeable design consultants.
ii. Use updated material lists to avoid erroneous material specifications.
iii. Use Building Information Modeling (BIM) to reduce design errors and conflicts.
iv. Avoid miscommunications between the design team members (architects, MEP, engineers).
v. Prepare a good checklist and detailed plans and specifications.
vi. Conduct a risk analysis to mitigate design errors and changes.
c. Contractor:
i. Promptly inform the design office about any design mistakes.
(2) Significant changes in quantity of work:
a. Owner:
i. Provide the design office with accurate site plan and elevation information.
ii. Provide the design office with accurate geotechnical data.
iii. Hold regular meetings with project stakeholders (contractor, sub-contractors, government agencies, etc.)
and provide them with accurate information.
b. Design office:
i. Improve the accuracy of initial cost estimates.
ii. Use BIM for accurate quantity take-off.
iii. Visit the project site to get a clearer idea of the site.
iv. Conduct a risk analysis to mitigate significant changes in work quantities.
12 A. Senouci et al.

v. Hire experienced cost estimators and quantity surveyors.

c. Contractor:
i. Conduct site visits before bidding to get a clearer idea of the site.
(3) Change of plan or scope by owner:
a. Owner:
i. Get involved in the design at an early stage to make sure all requirements are met.
ii. Maintain a clear scope definition at early stages and to share this information with stakeholders and execut-
ing team.
iii. Stop the work if the project doesn’t meet the scope to avoid large cost overruns.
b. Design office:
i. Understand the owner’s scope of work thoroughly to avoid scope changes.
ii. Follow the owner’s instructions and scope of work.
iii. Provide clear communications in the plans, spec, and contract, so that all parties know what is expected.
iv. Prepare clear and complete plans and specifications.
v. Use updated lists of materials to avoid erroneous material specifications.
vi. Avoid miscommunications between the design team members (architects, MEP, structural engineers) to
reduce change orders and cost overruns.
(4) Differing site conditions:
a. Owner:
i. Conduct a complete and thorough subsurface exploration.
ii. Hire experienced geotechnical engineers to supervise the geotechnical investigations.
iii. Provide the design office with a complete geotechnical analysis report.
b. Design:
i. Hire experienced geotechnical engineers for the substructure design.
ii. Study the geotechnical analysis report and report to the owner any discrepancies.
iii. Conduct a risk analysis to mitigate differing site conditions.
(5) Utility companies:
a. Owner:
i. Be up to date with all government regulations.
b. Contractor:
i. Make requests to utility companies well ahead of time.
ii. Closely follow up the requests made to utility companies.
iii. Conduct risk analysis to mitigate delays caused by utility companies.
(6) Mechanical and electrical provisions:
a. Government:
i. Accelerate the approval process.
ii. Review forms.
iii. Modify and improve regulations.
b. Design office:
i. Coordinate between civil and MEP designers well ahead of the construction phase.
c. Contractor:
i. Prepare correct shop drawings to avoid rework at site.

Disclosure statement
No potential conflict of interest was reported by the authors.

ORCID
Ahmed Senouci http://orcid.org/0000-0003-0735-9473
Neil Eldin http://orcid.org/0000-0002-0344-3670
 International Journal of Construction Management 13

References
Abdul Rahman I, Memon AH, Tarmizi Abd. Karim A. 2013. Significant factors causing cost overruns in large construction projects in
Malaysia. J Appl Sci. 13: 286–293.
Al-Dubaisi AH. 2000. Change orders in construction projects in Saudi Arabia. MSc Thesis. Saudi Arabia: Faculty of College of Gradu-
ate Studies, King Fahad University of Petroleum and Minerals.
Al-Jurf NA, Beheiry S. 2010. Qatar residential construction projects. Second engineering systems management and its applications inter-
national conference (ICESMA). IEEE,p. 1–6.
Al-Najjar J. 2008. Factors influencing time and cost overruns on construction projects in the Gaza Strip. MS Thesis, Gaza Strip: Islamic
University of Gaza.
Alnuaimi AS, Taha RA, Al Mohsin M, Al-Harthi AS. 2010. Causes, effects, benefits, and remedies of change orders on public construc-
tion projects in Oman. J Constr Eng Manage. 136. Available from: 10.1061/(ASCE)CO.1943-7862.0000154, 615–622.
Du J, El-Gafy M, Zhao D. 2015. Optimization of change order management process with object-oriented discrete event simulation: case
study. J. Constr. Eng. Manage. 10.1061/(ASCE)CO.1943–7862.0001092, 05015018.
Serdar D, Ismail S, Abu Bakar N. 2012. Factors causing cost overruns in construction of residential projects; case study of Turkey. Int J
Sci Manage.1 : 3–12.
Egan JJ, Seder JE, Anderson DL. 2012 Practices in construction change order management. J Cost Eng. (March/April issue). 12–17.
ECHarris built asset consultancy 2013. Avoiding the inflation bubble, Qatar inflation construction forecast. Available from: http://www.
echarris.com/pdf/8503_Qatar_Inflation_Report_FINAL.pdf, September 2013.
Eshofonie FP. 2008. Factors affecting cost of construction in Nigeria. M. Sc thesis.Akoka, Lagos: University of Lagos.p. 5–7.
Gunduz M, Hanna AS. 2005. Benchmarking change order impacts on productivity for electrical and mechanical projects. Build Environ.
40: 1068–1075.
Ismail A, Pourrostam T, Soleymanzadeh A, Ghouyounchizad M. 2012. Factors causing variation orders and their effects in Roadway
Construction Projects. Res J Appl Sci, Eng Technol. 4: 4969–4972.
Mahamid I, Dmaidi N. 2013. Risks leading to cost overrun in building construction from consultants’ perspective. Organization, Tech-
nology & Management in Construction: An International Journal. 5: 860–873.
Moubaydeen S, Pope J, Tuck J, Walker M, Mackay N. 2013. Construction and projects in Qatar: Overview. Construction and Projects
Multi-jurisdictional Guide(2013/2014), Qatar: Dentons & Co.
Yehiel R. 2014. Root-Cause analysis of construction-cost overruns. J Constr Eng Manage. Available from: 10.1061/(ASCE) CO.1943-
7862.0000789, 04013039.

View publication stats