Understanding Overruns in Construction Projects: Causes, Implications, and Management Strategies

Overruns refer to the amount by which the actual cost of a project exceeds its budgeted or estimated cost. Overruns can occur due to various reasons such as changes in project scope, unforeseen site conditions, delays in construction, and poor project management.

For example, if a construction project has a budget of $100,000 and the actual cost of the project ends up being $120,000, then there is an overrun of $20,000 ($120,000 - $100,000).

Overruns can have significant financial implications for project owners, contractors, and other stakeholders. They can lead to increased costs, delays in completion, and disputes between parties involved in the project. Therefore, it is important to carefully manage and monitor project costs throughout the construction process to minimize the risk of overruns.