Impact of pre-contract cost planning methods on the cost of building projects in Uganda

Abstract

Uganda's construction industry continues to face persistent cost overruns primarily due to inadequate pre-contract cost planning, a challenge highlighted in both local and regional studies. This has slowed the industry’s growth and hindered achievement of housing development goals under Uganda’s Vision 2040. The main objective of this study was to investigate the impact of pre-contract cost planning methods on the cost of building projects in Uganda. Specifically, the study identified commonly applied cost planning methods, examined their effectiveness in minimizing overruns, and proposed a methodological framework for cost optimization. A cross-sectional research design was adopted, and data were collected from 180 practicing Architects and Quantity Surveyors in Kampala, Uganda’s capital city. Data were analyzed using the Statistical Package for Social Sciences (SPSS version 23) as the primary analysis tool, while Regression Analysis (RA) and the Relative Importance Index (RII) were employed as statistical methods. The findings revealed that unit cost planning, elemental cost planning and cost-benefit analysis are the most widely used methods. Others such as least cost planning, life cycle cost planning, comparative cost planning, and functional cost planning are moderately applied, while the superficial area cost planning method is rarely employed. Results further indicated that methods relying on historical data (unit, elemental, and comparative) provide more reliable cost estimates with overruns of 2–14%. In contrast, least cost, life cycle, cost-benefit and functional planning indicated overruns of 15–20%, while superficial area planning exhibited the highest overruns of 20–30%. The study developed a methodology integrating appropriate methods with practical measures to enhance cost control. It concluded that selecting suitable pre-contract cost planning methods is critical to budgetary success and recommends stronger professional standards, industry-wide guidelines, awareness programs, and continuous professional development.