Comparative Analysis of Cost Management Strategies in Public and Private Construction Projects

Thesis Abstract

The management of construction project costs remains a critical challenge affecting the successful delivery of projects within budget constraints, with notable differences observed between public and private sector projects. This study aims to conduct a comprehensive comparative analysis of cost management strategies employed in public and private construction projects, with the objective of identifying effective practices, prevailing challenges, and sector-specific distinctions. Specifically, the research seeks to evaluate the implementation of cost planning, control mechanisms, risk management practices, and stakeholder engagement within both sectors to offer actionable insights for improving cost efficiency. Employing a mixed-methods research design, the study integrates quantitative and qualitative approaches for robust analysis. The quantitative component involves administering structured questionnaires to a stratified random sample of 150 project managers and cost engineers drawn from a population of 300 actively managing projects across the construction firms operating within a metropolitan region with a diverse mix of public agencies and private firms. The qualitative aspect complements this by conducting semi-structured interviews with 20 key industry stakeholders, exploring contextual factors influencing cost management strategies. Data collection instruments include validated survey questionnaires assessed for content validity through expert review and reliability testing via Cronbach’s alpha (target value > 0.8), alongside interview protocols piloted prior to data collection. Quantitative data are analyzed using descriptive statistics (means, standard deviations), inferential techniques such as Analysis of Variance (ANOVA) to identify statistically significant differences in strategies between sectors, and multiple regression analysis to determine predictors of successful cost management outcomes. Qualitative data are analyzed thematically using NVivo software, following a grounded theory approach, to extract recurring themes and insights related to sector-specific practices and obstacles. The research further adopts the theoretical frameworks of the Theory of Constraints and the Stakeholder Theory to underpin the analysis of strategic priorities and stakeholder influences in cost management processes. Preliminary expectations suggest that private construction projects are more inclined to utilize advanced technological tools such as Building Information Modeling (BIM) and activity-based costing, resulting in more proactive and integrated cost control measures. Conversely, public projects may face regulatory and bureaucratic constraints, leading to more rigid and less adaptable cost management practices. The findings are anticipated to reveal significant sectoral differences, with private projects exhibiting higher cost performance metrics and more effective risk mitigation strategies. The study also expects to uncover contextual factors, including contractual arrangements and stakeholder collaboration, that critically influence the effectiveness of cost management strategies in both sectors. The study contributes to knowledge by providing a nuanced understanding of sector-specific cost management practices, highlighting gaps between best practices and actual implementation in public versus private projects. It advances the theoretical discourse by empirically validating the applicability of the Theory of Constraints and Stakeholder Theory in the construction cost management context. The insights derived can guide policymakers, project owners, and practitioners in developing tailored strategies that improve cost governance and project delivery outcomes. In conclusion, the research underscores the importance of adopting sector-specific, technologically supported, and stakeholder-inclusive cost management strategies to enhance project performance. The recommendations advocate for policy adjustments to foster greater innovation in public projects, capacity building among project professionals, and the integration of advanced digital tools across both sectors. Future research is suggested to explore longitudinal impacts of implemented strategies and extend analysis to other geographic regions. This study ultimately aims to bridge existing gaps in construction cost management literature and provide a basis for industry-wide improvements in project cost efficiency.