A study of Factors Influencing toward Overhead Cost for Residential Construction Projects

Abstract

This research is a study of the factors influencing toward the overhead cost for the residential construction projects in Bangkok Metropolitan and vicinity area by sending questionnaires to 100 contractors. Among those, 69 companies returned valid questionnaires for the analysis. The research was to study various components of the overhead cost for the residential construction projects, influential factors and their levels in order to find a guideline in controlling and reducing the overhead cost of any residential construction project. The overhead costs incurred in the main office and on the job site could be classified into 10 groups consisting of 59 subgroups. The most problematic group which was hard to control was utilizing equipment, machines and vehicles on the job site in which the average evaluation score was 3.34 of 5.00. The top five most problematic subgroups were employee’s salary, cost of machinery’s acquisition, cost of equipment’s renting, cost of setting up field office and cost of fuel, in which the average evaluation score was 3.57-3.75. The analysis presented that the contractors estimated their average overhead cost before construction at 11.55 percent of the project’s value that was less than the actual overhead cost after the project’s completion which was found to be 13.26 percent. Construction contractors should have overhead cost estimate method considering all related factors, record overhead costs from previous projects for future projects cost estimate, especially, factors that have direct impact to project overhead costs. The research results could be used as a guideline for estimating and controlling of overhead costs for contractors, as a result reducing project total costs.