The root cause of cost overrun, is the fact that DoD teams keep underestimating scope changes and complexity in project after project. Unfortunately DoD leadership supports facilities cost problems by mandating dated, ‘ad-doc’ processes
While planners, cost estimators, and other professional are generally well aware of the factors that impact “capital projects” and how they may be mitigated, the fundamental cost estimation methods are flawed, dated, and ‘ad hoc’ from an organizational perspective. In short, DoD leadership has handcuffed their own people.
Bias and underestimation has become the the norm.
“We have met the enemy and the enemy is us” comes to mind.
It’s time to stop blaming the “complexity” and/or “uniqueness” of construction and deal with the fundamentals.
Competent, continuous LEADERSHIP is sorely needed, and has been for decades. We have great people actually doing the work, however, we tie there hands with inane practices. For example, the DoD continues to use national average cost data, construction cost indexes (CCI), and area cost factors (ACFs) for construction cost estimating. This approach has been proven error prone for decades. And that’s just one example of many. Don’t even get me started on “parametric” estimating.
The fundamental behaviors of LEANDERSHIP are what leads the causal chain of underestimating of scope of work during planning, procurement, and project delivery, and “unaccounted for” scope changes during delivery which lead to cost overrun.
This is not profound, just proven fact.
