Comparative Analysis of Cost Management Strategies in Public vs. Private Construction Projects

Thesis Abstract

Effective cost management is a critical determinant of project success, yet the strategies employed often differ significantly between public and private construction sectors due to divergent organizational objectives, regulatory environments, and resource constraints. Despite the pivotal role that cost control plays in safeguarding project viability, limited empirical research has systematically compared the effectiveness, methodologies, and underlying organizational influences of cost management strategies across these two sectors. This study aims to fill this gap by conducting a comprehensive comparative analysis of cost management practices utilized in public and private construction projects, with a focus on identifying sector-specific strengths, weaknesses, and influencing factors. The specific objectives of the research are (1) to examine the prevalent cost management strategies employed in public and private construction projects; (2) to evaluate the effectiveness of these strategies in achieving project cost objectives; (3) to identify organizational, procedural, and contextual factors influencing the selection and success of cost management techniques; and (4) to develop a framework for improving cost control practices tailored to each sector. Employing a mixed-method research design, the study integrates quantitative and qualitative data collection approaches. Quantitatively, a stratified random sampling technique was used to select a sample of 120 construction projects (60 public and 60 private) completed within the past five years across a metropolitan region. Project managers, cost engineers, and financial controllers were surveyed using structured questionnaires designed to capture data on implemented cost management practices, project characteristics, and perceived effectiveness. Qualitative data were collected through semi-structured interviews with 24 key stakeholders in both sectors to gather in-depth insights into contextual factors and organizational influences. Data validity and reliability were ensured through pre-testing of instruments, triangulation, and Cronbach’s alpha analysis, respectively. Data analysis involved descriptive statistics to profile the sample, followed by inferential statistical techniques such as analysis of variance (ANOVA) to compare the prevalence and effectiveness of specific strategies. Multiple regression analysis was employed to identify key predictors of successful cost management outcomes, with the application of the Theory of Constraints and the Agency Theory providing a conceptual framework for understanding organizational influences. Thematic analysis was used for qualitative data to identify recurring themes related to sector-specific challenges and facilitators. It is anticipated that the findings will reveal significant differences in the types of cost management strategies employed, with private projects favoring innovative, risk-sharing approaches, while public projects lean towards compliance-driven, rigid frameworks. The analysis is expected to show that organizational agility, stakeholder engagement, and transparency significantly influence strategy success, with variations explained by sector-specific regulatory and contractual environments. The study’s results aim to contribute to the existing body of knowledge by providing empirical evidence on sectoral differences and generating a tailored framework for optimizing cost control in diverse construction contexts. The study concludes that integrating sector-specific best practices, supported by organizational culture and regulatory reforms, can substantially improve cost management effectiveness. Recommendations include adopting flexible, collaborative strategies in public projects to enhance efficiency and leveraging technological advances such as Building Information Modeling (BIM) for real-time cost monitoring. The research further suggests avenues for future investigations into the impact of digital transformation and project governance on cost management efficacy. Overall, this study provides valuable insights for practitioners, policymakers, and researchers seeking to enhance project performance through refined and context-adapted cost management strategies in the construction industry.