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Reasons for contract changes in implementing Dutch transportation infrastructure projects: An empirical exploration

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  • Verweij, Stefan
  • van Meerkerk, Ingmar
  • Korthagen, Iris A.

Abstract

An important contributor to cost overruns of infrastructure projects is contract changes after the construction contract has been concluded. Using mainly descriptive statistics and non-parametric tests, real project data were analyzed from forty-five Dutch transportation infrastructure projects with a total construction contract value of over € 8.5 billion. First it was explored if we could find evidence for the presumption that contractors bid low on contracts to recover the loss of bid profit by claiming contract change costs in the project implementation. We conclude that we could not find evidence for the opportunistic behavior of contractors. Second, the different sizes and reasons for the contract changes were explored. We conclude that: scope changes are the most significant reason for contract changes, followed by technical necessities; smaller projects tend to have higher relative contract change costs; and contract changes due to omissions in the contract are more present in smaller projects than in larger projects. The results of the analysis suggest among other things that policymakers and planners should pay more attention to flexible contracting, and to the contract management of smaller projects.

Suggested Citation

  • Verweij, Stefan & van Meerkerk, Ingmar & Korthagen, Iris A., 2015. "Reasons for contract changes in implementing Dutch transportation infrastructure projects: An empirical exploration," Transport Policy, Elsevier, vol. 37(C), pages 195-202.
    • Handle: RePEc:eee:trapol:v:37:y:2015:i:c:p:195-202
    DOI: 10.1016/j.tranpol.2014.11.004
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    Cited by:

    1. Dejan Makovšek & Adrian Bridge, 2021. "Procurement Choices and Infrastructure Costs," NBER Chapters, in: Economic Analysis and Infrastructure Investment, pages 277-327, National Bureau of Economic Research, Inc.
    2. Cavalieri, Marina & Cristaudo, Rossana & Guccio, Calogero, 2019. "On the magnitude of cost overruns throughout the project life-cycle: An assessment for the Italian transport infrastructure projects," Transport Policy, Elsevier, vol. 79(C), pages 21-36.
    3. Kopańska, Agnieszka & Osinski, Roman & Korbus, Bartosz, 2024. "Private entities motivations to participate in public-private partnerships," Socio-Economic Planning Sciences, Elsevier, vol. 92(C).
    4. Verweij, Stefan & Meerkerk, Ingmar van, 2020. "Do public-private partnerships perform better? A comparative analysis of costs for additional work and reasons for contract changes in Dutch transport infrastructure projects," Transport Policy, Elsevier, vol. 99(C), pages 430-438.
    5. Love, Peter E.D. & Ahiaga-Dagbui, Dominic D. & Irani, Zahir, 2016. "Cost overruns in transportation infrastructure projects: Sowing the seeds for a probabilistic theory of causation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 92(C), pages 184-194.
    6. Love, Peter E.D. & Zhou, Jingyang & Edwards, David J. & Irani, Zahir & Sing, Chun-Pong, 2017. "Off the rails: The cost performance of infrastructure rail projects," Transportation Research Part A: Policy and Practice, Elsevier, vol. 99(C), pages 14-29.
    7. Chong, Uven & Hopkins, Omar, 2016. "An international experience on the evolution of road costs during the project life cycle," Transport Policy, Elsevier, vol. 48(C), pages 60-66.

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