| Indirect construction costs (IDCC) comprise from as little as 10 percent to 40 percent or more of the total cost of construction projects, in part dependent upon the type and nature of the project. Yet at either end of this range of percentages, IDCC account for a significant component of total project costs which justifies the need for practices to estimate, control and manage IDCC. When IDCC practices are not afforded the appropriate attention and resources, key outcomes of construction projects are affected. This research operationally defines IDCC and proposes a structured categorization framework for use in understanding and communicating IDCC functions among construction project participants. Empirical recommendations contained within this dissertation are premised upon data collected through testimonials, interviews and brain-storming of an extensive set of construction industry professionals, specifically including a 25-member Construction Industry Institute research team. Statistical findings are based upon data collected through 56 one-on-one data collection interviews with subject matter experts, and 47 project-level surveys. Qualitative data were filtered, organized, aggregated and technically presented as instructional guidelines, including 12 empirical checklists containing 216 consideration items, nine detailed process flowcharts and 20 practical tools for estimating, controlling and managing IDCC. These recommended practices and tools were verified and validated through rotational progressive reviews by experts and through project level case studies. Quantitative data were statistically analyzed using hypothesis testing and correlation analysis. The statistical methods utilized include Mood’s median test, Mann-Whitney U test, Pearson’s Chi-square test, Spearman rank correlation analysis, and Phi correlation analysis. These tests assess the presence of any statistically significant relationships between 15 representative IDCC practices and six construction project outcome metrics. The two most statistically significant, positively-correlated relationships found are the frequency of project manager-field supervisor meetings for review of IDCC to quality performance metric and to an index representing five hard project performance metrics. In summary, this research operationally defines IDCC, tests the association between IDCC practices and construction project outcomes, and offers process improvement opportunity by recommending leading IDCC practices. The predictability of construction project outcomes can be improved through application of the full collection of IDCC practices outlined and detailed in this research. Financial and time resources are constrained on construction projects, so practitioners may elect to focus their efforts on those specific IDCC practices most closely related to the construction project outcome(s) considered of highest value to the owner. |
