Finalyear

CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
A building project like any other construction project is a one of the activity that often cut across multiple disciplines and involves professionals who offer their expertise towards its realization. The cost of securing professional services, otherwise known as consultancy services, the cost of labours material resources plants and sometimes the cost of adopted methods of execution if the building contains some aspects of engineering works and contractors allowance for profit and overheads all weigh to the total estimated cost of the building contract.
Having considered all the activities with the financial consequences in the contract and having carefully computed the labour cost, materials and plant cost, before allowing some elements of profits and overheads, there is a common belief that the sun total which is the initial estimated cost (initial tender figure) would be sufficient for the completion of the said building work without further claims from the contracted handling the work. Against the background, Buchan et al.(1991), proffered that it is erroneous to think that all estimators can accurately estimate the cost of carrying out the work and that the only variable in the tenders of different estimators tendering for the same project is the level of makeup. In another contribution, Foreman (1998) opined that to establish the main factors of a contract baseline (i.e the terms condition, or price below which one will not accept the contract).one must come up with an accurate and technically established construction cost estimates. This sustains the opinion of atton (1968) that construction companies owe their continued existence to the success of their tenders. Furthermore, the assumption of all construction estimates are realistic and can reasonable the actual cost of the have been disproved, especially in cases of abandoned projects.
Accordingly, onukwube (2002) concluded that in defining a construction cost estimate as a predicted value, it on is good to remember that the prediction is based certain key factors such as contractual relationships and project information existing at the time of the tender. This is to say, there are variables that determine how much the estimate represents the actual cost. However, the understanding and skillful control of resources and work items noted to be the main cause of variations between initial and final cost of the building project by experience contractor /tenders as well as that of the project term, makes or render few projects dispute-free at completion. On the other hand, neglects of these factors may result in project cost overrun. This continuous variability of building projects costs aroused by interest to carry out this research. This is to bring the general understanding of the causes and the degree to which the project cost vary across local government areas in Akwa Ibom state, as well as measures that could help to reduce occurrences.
1.2 Statement of the Problem
Over the years, several cases of project cost overrun have been recorded. An evaluation of majority of these projects proved that the target costs (budgeted costs) for the completion of these projects were either wrongly estimated, the project miss-managed, or there was the occurrence of unforeseen circumstances. As such, the clients cost limits were exceeded. Some of these project either private or public, are so vital that if completed would have gone a long way to improve the economy through the creation of employment for the youth within a given geographical territory and beyond. Lay persons often wonder why the initial cost of projects vary from the final cost on completion. After careful analysis and computation of the projects, costs have been made by the project team as well as other parties involved in the procurement of the contract. The reason may be as a result of ignorance of the importance of the estimating, but a lack of understanding of the factors which must be accommodated to arrive at a reliable estimate. Failures to analyze the projects carefully before all project circumstances are the same are also contributory factors. Owning to the later, some contractors continue to use unit rates of past building projects.
Forman (1998) noted that poor estimating and scheduling are two of the biggest causes of project failures. When a contractor fails to fulfill his obligation under the contract, he stands to lose his performance bond. In addition, when a clients representative fails to carryout proper analyses of each elements of the proposed building project at the pre-construction period, he is bound to be confronted with frequent claims made by the contractors, or otherwise may face a lengthy dispute between himself and the contractor. It is against this backdrop that this research project seeks to determine the variability between the initial and final cost/m2 of bungalow and as well, determine the percentage increase/risk cost adjustment factor “which could be used as cost multipliers for Uyo, Eket and Ikot Ekpene L.G.A of Akwa Ibom state.
1.3 Aim and Objective of the Study
This study is aimed to determine the variability between initial cost and final cost of building project in Akwa Ibom state with the view of comparing the variation cost using three local government areas in Akwa Ibom state. The objectives to achieve this aim are as follows
1. To identify the factor affecting the variability between the initial cost and the final cost of a building project in akwa ibom state.
2. To give suggestive recommendation in order to reduce the cost variability between the initial cost and the final cost of a building project in akwa ibom state.