Cost Assessment of preconstruction phase for Construction Projects in Egypt

Abstract

The main premise of transaction cost economics is that project cost is not only production costs but there are also additional costs resulting from transactions between parties. Transaction costs include _but are not limited to_ the costs of preparing the bidding package, estimating and drawing up a contract, administering the contract, dealing with any deviations from contract conditions and any contractual problems include claims, change orders, and disputes. The main objective of this paper is to establish the factors that affecting transaction costs in construction projects in Egypt. The study was conducted on various types of construction projects in Egypt, which formed the sample size. To collect data, a questionnaire was used that was personally administered to the respondents, using emails and conducting semi-structured interviews. The collected data were analyzed by using SPSS program, and a software package named IBM. The findings indicated that the most important factors affecting positively (decreasing transaction cost value) on transaction cost value in construction projects in Egypt are: 1- The good financial position of the contractor 2- Lack of claims by the contractor 3- Non-substitution of materials during implementation by contractor 4- Contractor’s experience in similar type projects 5- The good relationship between the contractor and previous clients 6- Choose a more qualified contractor to do the job 7- The good relationship between the owner and contractor, designers, suppliers and government agencies 8- Implementation of the project in a stable security circumstance 9- Owner’s obligation to pay the contractor in time 10- The high efficiency of communication between project parties 11- Owner's commitment to his orders and not change during execution 12- The high efficiency of the owner’s organization 13- Choose the appropriate procurement method 14- Calculate the project time correctly 15- Choose the appropriate delivery type

Keywords

• transaction costs
• pre-transaction costs
• post-transaction costs
• construction management
• construction project