Post Contract Cost Management Practices of Contractors in Nigeria

It is a well-known fact that a lot of problems have arisen during the construction projects implementation; out of which, the main distinctive problem is cost overruns. Cost overruns are evidently frequent problems in the construction industries of many developed and developing countries. Once the construction projects implementation begins, the project's costs rarely remain static. There is need for cost control on the part of contractor in order to guarantee profit and ensure the continued achievement of long term goals of the company. This study was therefore carried out to examine the post contract cost management practices of contractors in Nigeria. The study examined the frequency of use of contractor’s cost control methods and their effectiveness. A cross-sectional survey research design was adopted for the study. A structured questionnaire was used as the principal instrument for collecting data from respondents. Random sampling method was used to drawn up sample from the population. A total sample of eighty (80) was drawn from these collections of building construction contractors of various categories (small, medium and large) from Lagos, Nigeria. Thirty four (34) were completed and returned representing a 44% response rate. Frequency, percentage, mean score, spearman rank order correlation and analysis of variance were used in analysing data collected for the study. Findings reveals cost projection measure is the most frequent cost control method used by contractors, while actual versus forecast reconciliation (labour/material/plant) is regarded as the most effective control method. Expatriate and partly expatriate contractors agree on the effective cost control methods in the construction industry. It was recommended that building contractors should ensure reliable and accurate cost estimating, the quantification of actual costs for labour, equipments and plants should be done on site during construction to ensure cost control on construction sites. The feedback which requires adjustments during pricing future estimates should be kept and updated in the form of bills of quantities. This study further recommends contractors should embrace cost control methods which ensure close monitoring and reporting of work progress and cost performance. This is very important for effective cost control process during post contract stage. The report also claimed that IT integration is the only way to get quick and accurate reports to solve cost overrun and its associated problems identified by several literature and professionals. Keywords: Construction project, cost control, cost overrun, Nigeria, post contract