Comparative Construction Cost Analysis of Selected Design -Bid-Build and Design -Build Road Projects in Ethiopia
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Date
2020-11-01
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Addis Ababa University
Abstract
Design-bid-build (DBB) and Design-build (DB) are the two common Project Delivery
Systems (PDSs) that have been used widely in the international and local construction
industry. For DB projects, during tendering, unlike the DBB’s contractor, the responsive
design-builder offers a lump-sum amount using incomplete detailed engineering design.
Although the DB PDS provides better cost certainty, that certainty may come at a higher
premium as compared to DBB. This is because the design-builder allocates a certain risk
factor to compensate for the design risk as well as for the lack of information to estimate
the work quantities. Previous studies have demonstrated the cost certainty in favor of DB
projects than DBB; however, it lacks to examine the amount of risk that comes with cost
certainty. To fill this gap, this research undertakes a cost comparison between road
projects delivered through the DBB and DB PDS using their cost-per-kilometer. It
involves seven road projects (three DBB and four DB projects) tendered by the Ethiopian
Roads Authority (ERA) from 2009 to 2017. It used a holistic multiple-case study design,
primary sources of data, and document analysis. After ensuring the similarity between
the projects, the DB’s bill quantities for selected pay items were multiplied by the
corresponding nearby and similar DBB’s bill item-unit rates. The first, second, third, and
fourth case analysis shows that DB projects exhibit a higher cost-per-kilometer and they
are found to be 12.7%, 17.1%, 11.6%, and 13.5% costly than DBB projects respectively.
Therefore, DB PDS can increase the project cost on average by 13.7% than the DBB
PDS. This is also expected from the theoretical justification that, due to the lack of
detailed information, the design-builder can be argued to include higher markup for
possible risks. As a result, unless the project has a high state of urgency, the DBB PDS is
the better option than DB PDS from a static cost performance perspective for the ERA
context.
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Keywords
Comparative Cost Analysis, Design-bid-build, Design-build, Road Project Costs, ERA, Case Study