Factors Influencing Change Orders in Horizontal Construction Projects: A Comparative Analysis of Unit Price and Lump Sum Contracts

TL;DR

This study analyzes factors affecting change order frequency in Florida's horizontal construction projects, comparing Unit Price and Lump Sum contracts, and proposes a model to optimize contract selection to reduce change orders.

Contribution

It introduces a discrete choice model to improve contract type selection, aiming to reduce change orders in DBB projects based on project-specific factors.

Findings

Project size significantly affects change order frequency.

Project duration influences change order occurrence.

Contract type choice can be optimized to reduce change orders.

Abstract

Change orders (COs) are a common occurrence in construction projects, leading to increased costs and extended durations. Design-Bid-Build (DBB) projects, favored by state transportation agencies (STAs), often experience a higher frequency of COs compared to other project delivery methods. This study aims to identify areas of improvement to reduce CO frequency in DBB projects through a quantitative analysis. Historical bidding data from the Florida Department of Transportation (FDOT) was utilized to evaluate five factors, contracting technique, project location, type of work, project size, and duration, on specific horizontal construction projects. Two DBB contracting techniques, Unit Price (UP) and Lump Sum (LS), were evaluated using a discrete choice model. The analysis of 581 UP and 189 LS projects revealed that project size, duration, and type of work had a statistically significant influence on the frequency of change orders at a 95% confidence level. The discrete choice model showed significant improvement in identifying the appropriate contract type for a specific project compared to traditional methods used by STAs. By evaluating the contracting technique instead of project delivery methods for horizontal construction projects, the use of DBB can be enhanced, leading to reduced change orders for STAs.