Love et al. (2012) carried out a qualitative case study of cost overrun explanations in public building projects (Hospitals and schools), using a narrative, specific to the design of social infrastructure building projects.
The objective of the study was to understand the chain of intermediary events and actions of project participants that culminated in cost overruns, and whether any form of strategic misrepresentation was evident. A narrative framework was conceptualized (See Figure 3.9), showing that when a project commences, design consultants often proceed with highly optimistic intent of producing error-free design documentation. However, revisions are frequently undertaken on the initial design documents produced. As such, most design organizations have adopted circumstantial market-driven strategies, that define the quality of consultancy service offered relative to fees, to stay afloat in the competitive environment. It was stated:
“Management within architectural firms focus on the administration of contracts and offices rather than the management of projects and practices” (Love et al., 2012: 3). Design quality offered in practice was thus conceptualized as a function of how fees are negotiated, with competitively procured services, yielding restricted consultancy services, in the face of the disproportionate and impracticable demands often imposed by the public sector. This latent condition, combined with the limited time frame available during the initial conceptual phases, activates trade-offs during the performance of tasks: design shortcuts against fee maximization, thereby setting off an additive chain of concomitant errors which creates significant ‘error traps’. Such significant errors when discovered latter during the construction phase, may necessitate rework and variations, with the resultant resolution of conflicts and contractual disputes, leading to cost overruns.
Pathogens as represented in the framework thus represent “the latent conditions that lay dormant within a system until an error comes to light” (Love et al., 2012: 3). Such pathogens may thus be considered part and parcel of the everyday functioning in an organization, which are considered normal practice, because they have been in existence over a considerable period of time. But in actuality, such practices negate or significantly deviate from best practice. Love et al.’s framework thus maps out the practices within design organizations, that constitute the latent issues, which combine with errors to result in active failures. Several forms of pathogens were identified by Love et al. (2012: 3) as leading to errors in design organizations:
“Practice: arising from people’s deliberate practices; Task: arising from the nature of the task being performed; Circumstance: arising from the situation or environment the project was operating in; Organization: arising from organizational structure or operation; System: arising from an organizational system”.
Typical deliberate practices cited by Love et al. (2012: 3) as existing in design consultancy firms, was:
“the recycling of design details, specifications, and other contract documentation to reduce time and save money, without giving due consideration to the project’s bespoke nature”
As such, design errors in the original contract documentation prepared by consultants, termed ‘Latent organisational and circumstantial Pathogens’, serves as the blue print which fosters dysfunctional contractual climate, where corner cutting measures in consultant’s practices, and remedial tasks that ought to be taken, where stifled by their efforts at self-preservation. Using this narrative, twenty-four in-depth interviews with project participants who had been involved in the selected projects were conducted by Love and his co-authors. Allowing the researchers to gain an in-depth understanding of the contextual design based cost overrun triggers and errors, that each project experienced over its life span. From the data, Love and his colleagues developed the explanation for cost overruns within social infrastructure projects undertaken in Australian. This qualitative study by love et al. (2012) led to the following other principal findings traced as common to the projects studied:
Value for Money was subconsciously downplayed as clients did not adequately plan for project risks, whilst being over optimistic, as a fixed budget had already been set for the projects;
Initial project estimates were under-estimated by clients who did not account for potential hikes in material and local labour rates due to inflationary pressures;
A series of design related errors occasioned by client’s change related demands and pressures were placed on consultants, who were awarded contracts on the basis of lowest bid;
A culture of risk avoidance by clients and consultants, compounded by the typical inclination to adopt the lowest bid system of contracting and poor project management provided, served as a catalyst for the consultancy firms to exploit unethical avenues to maximize their fees and profits.
Love et al. (2012) further emphasised that no evident form of strategic misrepresentation by clients were discerned, but a rather that of optimism bias, against the backdrop of political expediency and community pressures to satisfy user needs and to douse criticism by political opposition. It can further be inferred from the findings of Love et al. (2012), that in the Australian context, technical explanations as well as theories of game signalling advanced by Cantarelli et al. (2013), and efforts at risk avoidance, hypothetically conceptualised by Ganuza (2003), prevail, and not the assertions of strategic under-estimation by clients, asserted by Flyvbjerg et al. (2002).
Although the commendable empirical work of Love et al. (2012) generated a systematic qualitative framework of cost overrun explanations, emerging from primary data, it is lacking in the quantitative cost overrun data analysis, necessary to compliment the qualitative findings. As Yin (2014) prescribes, data from multiple sources strengthen the analytical generalisability and external validity of case studies, against the backdrop of its notable critique. This is also necessary, to overcome the several critiques which plague the output of purely qualitative research, resounded by advocates of methodological pluralism in construction management research (Dainty, 2007). These shortcomings may thus undermine the external validity of Love et al.’s study, as being no more than ideographic. Furthermore, Love et al.’s study uses a technical narrative contextualised in the development of building infrastructure in the Australian setting, which may limit the generalisability of the developed framework to developing countries or the specific context of highway projects.
3.7.3 Relay Race Project Governance Evolution Framework by Gil and Lundriganm (2012)