The Cost of Rework

May 6th, 2011

Rework is a significant factor that contributes to time and cost overruns in construction projects, and is largely caused by poor management and planning. Ensuring quality construction that is in line with the client’s requests can have many obvious benefits, and also some less noticeable advantages. Understanding the causes of rework and how to assess quality of material or design are crucial factors in ensuring you are able to avoid this expensive mistake.

Causes of rework

Rework basically refers to rebuilding. Rebuilding can occur because there has been a deviation when it comes to quality. It can also occur because there has been non-conformance to the original plan or defects and failures in terms of quality. Finding a cause or series of causes behind rebuilding though is a topic not without contention among researchers and construction companies.

A study conducted in 1992 attributed documentation errors as one of the major causes for rework. It was also found that projects without quality systems in place incur cost increases of around 10% because of rework.

The next year a different study also reported that a major Australian contractor incurred significant rework at a cost increase equating to 5% of contract value in one of their major projects. The cause was attributed to poor documentation on the part of design consultants working on the project.

Furthermore, it was found that the concreting subcontract incurred a 31% cost increase due to rework.

As a result of their studies, researchers estimated that design consultant errors resulting in rework could incur cost increases which equate to a massive 20% of their fee.

Short-term Solutions

The projects with the greatest tendency to incur higher rework costs are renovation and refurbishment projects. The reason why can be attributed to the complexity and uncertainty regarding the extent of work required.

However, studies from within one construction company demonstrated that the implementation of quality assurance systems dramatically reduced instances and cost of rework in a variety of construction types.

The implementation of such a system requires cooperation, coordination, and commitment by all those involved in a project. There must also be a free flow of information about changes, errors, and omissions between participants.

Long-term benefit and solutions

The specific problem of rework has continually plagued construction industry efforts to raise production performance and company profitability, this despite the cumulative efforts of various academics and industry practitioners. If avoided, the turnover is greater and ultimately has a flow on effect to boost wages, salaries and financial health within the industry.

There have been problems with developing a definition of rework that is universally acceptable to industry practitioners. Competition and pressures on resources may also create the temptation to cut corners during construction, which almost always results in the cost of rebuilding exceeding the initial funds saved.

Although the calculation of rework can be an arduous and time-consuming task, there is a need to do so in order to establish benchmark standards of performance, which can be used to monitor rework cost occurrence.

The long term solution to reducing rework costs is implementing documentation and auditing systems within your business which can be used to supplement further research.

For a more comprehensive explanation of what is known about the causes and solutions associated with rework, see the research articles "Calculating total rework costs in Australian construction projects" by Peter E. D. Love and David J. Edwards.