Analysis of construction project cost risk in bidding documents preparation phase

Abstract

Construction projects usually involve high investments. Hence, the project cost risk analysis during the project bids phase is important. In fact, the costs of construction projects nearly always exceed the planned scenario. This research presents the cost risk analysis method during the project bids phase with the input parameter as the uncertainty variable. The uncertainty variable distribution in this research built on the historical data set of 130 projects invested in the period of 2015-2019. The research has shown that the input parameters as the uncertainty variables are the causes affecting the risks encountered when the contractor executes the project. Moreover, this research also has shown that the Monte Carlo simulation and sensitivity analysis is the tool to detect and risk management.