Stakeholder impacted cost contingency model (SICC)

Abstract

In 2007, the Federal Transit Administration, an arm of the US Department of Transportation, published a detailed analysis of contractor performance for specific transit projects across the United States, including the downtown Seattle tunnel project. The project was estimated to cost less than {dollar}299.6 million, but it was eventually completed for {dollar}468.7 million. Among the reasons for the cost overrun were mainly the complaints from downtown municipality interests. The major problem facing project managers is the inefficient stakeholders cost contingency procedures being the main cause behind the projects cost overrun. This paper develops the Stakeholder Impacted Cost Contingency (SICC) model. The SICC model is used to evaluate the stakeholders cost contingency of a project. The model considers five main stakeholders of the project: the project manager, the client/owner, the engineer, the contractor and the government. The developed model analyses the complete project life cycle: the conceptual phase, the design phase and the construction phase. The SICC model i) uses the Analytic Hierarchy Process (AHP) in order to evaluate each stakeholder power weight in each phase; ii) then uses Fuzzy Set theory (FST) in order to evaluate each stakeholder influence in each phase; iii) it uses the Multi-Attribute Utility Theory (MAUT)in order to evaluate each stakeholder impact on cost in each phase; finally iv) it determines the project Stakeholder Cost Contingency (SCC). This research is relevant to project managers and academic researchers, since it develops a tool for evaluating the cost contingency of projects due to stakeholders influence.