Evaluation of The Cost Estimating System of Building Contractors in Addis Ababa

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Addis Ababa University


In Ethiopia, construction has been booming in the last ten years due to the growth and transformation plan linked with the Millennium Development Goal (MDG) adopted by the Government of Ethiopia (GOE). However, achieving this goal as its plan remains a challenge. Out of the many inter–related problems, difficulties and shortcomings of the construction sector, the contracting companies’ performance in completing the projects within the contractual time, quality and cost is one of the major issues in developing the sector to the highest level. Hence, improving the efficiency and effectiveness of local contractors with regard to cost estimating system is very vital since efficient and effective estimating and bidding process is a key to successful construction and to build sustainable development to the sector. The objective of this research is to evaluate cost estimating practice of local building contractors, identify shortcomings, deficiencies and limitations of the cost estimating system used by local contractors, explore factors that influence the accuracy of estimating the building project cost in Addis Ababa and suggest some ways to improve the existing practice in order to minimize the delay in time and maintaining the desired quality of the construction work. A survey questionnaire is used to explore the local practice in cost estimating. Basically, the shortage of qualified personnel and lack of available guidelines or established standards on cost estimating systems are considered the main obstacles for successful cost estimating. One of the main recommendations of this research is to encourage local contracting companies to have better awareness and attitude to use proper cost estimating systems in more modernized (computerized) ways to become more successful not only in winning the bids with the desired profit but also completing the work within the estimated time and the required quality. Key Words: Cost, Cost estimates, accuracy, building projects, local contractors.



Cost, Cost estimates, Building projects, Iocal contractors, Accuracy