Impact of mobilization costs on schedule performance of highway projects

Abstract

Purpose The purpose of this study is to determine whether there is a correlation between mobilization costs and project schedule performance of highway projects. In addition to this, the study will also determine if the mobilization costs are helping small or large highway projects in terms of improving the schedule performance. Design/methodology/approach The data of 206 highway projects were collected from the Department of Transportation of two states with the help of questionnaire survey. The cost, schedule and mobilization costs data were collected. The performance metrics related to construction schedule growth and construction intensity were developed in order to test the research hypotheses: mobilization costs will increase the schedule performance of highway projects. The data were also divided into two groups based on project cost and analyzed to check whether the mobilization costs impact the schedule performance of these highway projects. Spearman's correlation test was conducted to determine the correlation between dependent and independent variables. In addition, a Mann–Whitney test was conducted to determine the difference in medians of construction schedule growth and the construction intensity of these two groups of projects. Findings One major study finding was that there was no strong linear correlation between the mobilization cost percentage and the construction schedule growth and construction intensity of highway projects. However, the study found the projects that have 9% or more mobilization costs had significantly better schedule growth compared to the projects that have less than 9% mobilization costs. When data were analyzed based on the project size, it was found that this pattern was seen only in large projects costing equal to or more than $5 million. Practical implications This study's findings have very crucial practical implications to state DOTs contract engineers. This study shows that the highway contract engineers need to provide the right amount of mobilization costs to complete their projects on and before schedule. If the correct amount of mobilization costs is not provided to the contractors, the impact of these mobilization costs on reducing the schedule growth will be negligible. The findings of this study will assist public agency decision makers to complete their projects on or before time by including the mobilization costs provision in the contract. The state DOTs can improve their schedule performance by providing enough financial help to the contractors so that they can improve their cash flows and complete projects successfully within the given timeframe. Originality/value This paper contributes to the existing body of knowledge by validating the impact of mobilization costs on the schedule performance of highway projects. There has been no empirical study conducted prior to this to identify the role of mobilization costs on reducing the schedule growth of highway projects.