Construction projects are argued to be the most complex of all production undertakings (Baccarini, 1996). Williams (2002, 2005) states that the complexity of these projects is a contributing factor to project failures, such as cost overrun, which are commonly seen in infrastructure project (Cantarelli, Molin, Van Wee, & Flyvbjerg, 2012). As one of the first Morris & Hough (1988) describe that cost overruns are common and that many projects appear as failures, while Flyvbjerg et al. (2003) agrees with Morris & Hough, by stating that this is a long-lasting problem since cost estimates have not improved and cost escalations have not decreased in the past 70 years. However, between the 1990s and 2000s, western governments were reassessed and more tasks were privatized (England & Ward, 2007; Pollit & van Thiel, 2007). Governments expected that private contractors would be able to innovate more, deliver quicker, reduce costs, and operate more efficient (Savas, 2000) resulting in integrated contract types. This research aims to provide insight into the relationship between the contract type and the management of cost groups, in Dutch national infrastructure projects in order to improve cost management. To provide an answer to the main research question, a literature study has been performed followed by a statistical analysis of 68 infrastructure projects with contract types including, RAW (n=24), E&C (n=22), and D&B(M) (n=22). Combined with the expectations of the expert panel this study concludes that there is no relation between the contract types RAW, E&C, and D&B(M) and the cost management of Dutch national infrastructure projects. However, it has been observed that project members of a contractor overestimate the relationship that D&B(M) projects should have higher cost overruns. This study concludes that the cost performance, of cost groups other than engineering, differ insignificantly and marginally small between contract types with varying design responsibilities. Moreover, the expert panel assumes that more information leads to less uncertainty and risks resulting in less cost overruns. Which is a common reasoning as stated in the GWW market analysis performed by McKinsey. However, this study concludes that the unavailability of information depending on the moment of contracting does not have an influence on the uncertainty of the cost performance nor the cost performance itself. Therefore, this study does not believe that the “two-phase-process” as proposed by McKinsey will contribute to less uncertainty about the cost performance. Instead, this study illustrates that Dura Vermeer confidently applies percentages to estimate relatively small, often process-related indirect cost groups which on average incur a cost overrun. Therefore, both the client and contractor should improve the process of constructing large complex infrastructure projects in order to improve the cost performance.

Many construction projects experience cost overruns (Flyvbjerg & Holm, 2002), which is the difference between the estimated cost and the final costs of a project. In Design & Build procured projects, the contractor is responsible for both designing and constructing the project (De Ridder, 2009). During the tender phase, the contractor creates a schematic design and a corresponding cost estimate (De Ridder, 2009), based on client’s functional requirements. After contract award, the contractor elaborates the schematic design into a detail design. Even though this detail design yet has to be created, the budget for the project is already fixed. It is often difficult for the contractor to keep track of the current cost position relative to the cost baseline (budget) during the design stage because of inadequate interaction between designers and actors with practical on-site expertise, often leading to exceedances of the budget, detected at a later point in the design stage (Kim & Park, 2016) The goal of this research was to improve cost estimation and cost monitoring of the contractor during the design stage in Design & Build procured projects to enable the contractor to keep track of the current cost position of the design, relative to the cost baseline (budget). This research’s literature study provided the following insight into the into the structure of both the design and cost management processes (cost management covers cost estimation and cost monitoring) of the contractor and their dependencies in Design & Build procured projects. In the tender, both the design and the cost estimation processes dynamically converge into a tender design with a corresponding price estimate. After contract award, the design is further elaborated upon through a dynamic and iterative process while the budget to build the design ‘outside’ is fixed. Potential differences between the fixed budget and the cost estimate of the developing design occur at different timepoints in the design stage. Only after the detail design is created the working budget is revised, based on a far more accurate estimate of the cost of the detail design. In this research’s case study, four main team members of three ongoing construction projects of Dura Vermeer infra landelijke projecten were interviewed, resulting in the following general findings in practice: 1) The difference between the costs of the design and the budget, is often inaccurate and incomplete as the responsible actors are not perfectly capable to make accurate estimates of the ever-changing costs for the design, neither to they make them for all design changes. 2) The responsibility for communicating the difference between the costs of the design and the budget is unclear within the project team in terms of initiative and frequency. 3) Designers lack background information of the material quantity’s that support the tender design even though monitoring material quantities is key for designers to keep their design within budget. This research delivered a framework that aims at improving alignment between the design, and cost estimation and cost monitoring processes by structuring actor responsibility and information sharing.