The amoebic growth of project costs

a cultural literary review

When projects fall off-track, costs can quickly add up--often far exceeding estimates. Such escalation is especially surprising when project managers know the source and understand the reasons causing delays and disruptions. This paper examines project overruns--to understand why and how project costs escalate exponentially--via a in-depth post-delivery claims analysis of several large private industrial projects that far exceeded budget. It begins by explaining its use of an amoeba as a model for depicting the causes and effects of cost escalation. It then describes why the perspective described in this paper--that costs increase exponentially and surprisingly--contrasts the general assumptions of linearity in cost build-ups and the additivity underlying much work in project risk management. This paper then outlines this study's seven-stage, project expenditure-based structure--one progressing from "estimating for the bid" to "accelerating to compensate."
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