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agency. In this case, the observed difference in results was 2.0 % (budget reduction), but thecritique of the agency’s approach to estimation was repeated in nearly similar terms, and actionsto improve cost estimation were sought after. This may indicate some reluctance by agencies toimplement changes based on recommendations from quality assurers. However, the agencywhich was criticized, particularly by one of the consultancy firms, for employing a method withpossible bias responded by hiring the same firm to facilitate the cost estimation process inprojects which subsequently were encompassed by the procedures for quality assurance. Theseexamples show some of the practical responses by project organizations to quality assurerrecommendations.7. Concluding discussionThe objective of this paper has been to investigate the difference in estimates in projectssubjected to an institutionalized framework for up-front assessment and quality assurance. This isdone to explore how external quality assurance with particular emphasis on review of cost in thefront-end of major projects may contribute to more consistent achievement of project success.First, quantitative differences in a sample of 61 projects were presented as a follow-up to thestudy of 31 projects reported by Magnussen and Olsson (2006). Second, emphasis in this paperwas extended to include approaches to explaining why differences occur.The data of quantitative differences revealed that external review by quality assurers is likely toresult in recommendations for budget increase (66 % of the cases), although the combined costimpact for the projects seen as a whole seems to remain low (3 % budget increase on average).As can be seen in Figure 1 and as suggested by some summary statistics, there seem to be greaterdifferences in the early stages of the quality assurance scheme, yet it was concluded that analysesinvolving only quantitative aspects are inadequate to reveal any underlying reasons for theobserved differences. Therefore, contextual information, data which could have the potential toidentify explanations for differences was sought. The most important lesson was that projectswhich displayed small differences in estimates were just as important as those with largedifferences. Explanations were just as readily available and informative even if differences weresmall, and estimates for all practical purposes could be said to be equal. This implies that analysesof quantitative differences alone are insufficient to determine how up-front assessment andquality assurance may affect planning and implementation.The identified explanations were structured within three overall issues, two of which were brokendown into subcategories. That different perceptions of the uncertainty involved accounted for asignificant part of the explanations for differences did not come as a surprise. As suggested byMagnussen and Olsson (2006), whenever project organisations and quality assurers have differentviews about uncertainty elements, results may be affected. Magnussen and Olsson (2006) furtherassumed that independent quality assurers may be more prone to include impacts of uncertaintiesof a more unpredictable and unmanageable nature. This can not be said to be supported by theresults of this study. The data have revealed that explanations most often are concerned withinternal issues such as project management and control, the project organisation, contracting andthe methods employed for cost estimation. These are issues that to a great degree may becontrolled by the project organization. Cost estimation issues alone, which sort into thetraditional category of technical causes, account for 33 of the 70 identified explanations ofdifferences. Of course, this should be interpreted relative to the background that a larger part ofthe QA2 exercise concerns projected cost verification. Both the numbers proposed and themethods used to produce those numbers are scrutinised by independent commercial qualityassurers. However, while the analysis of quantitative differences suggests that methodical issuesmay be insignificant, in the sense that observed differences are small, a closer look at the9
contextual information shows the contrary. One of the examples above illustrated that althoughdifferences were small, it was argued by the quality assurer that the approaches applied showedsuch significant inequalities that the size of the quantitative difference was judged to becoincidental.Some practical steps taken by agencies in response to some of the issues raised by the qualityassurers were identified, but a main weakness of this study is that little is known about the projectorganizations’ reactions to QA2. Clearly, this study might have been more comprehensive hadmore information been available from the project organizers. Moreover, this study has not beenconcerned with psychological or political issues (misleading and intentionally biased forecasts),which have been pointed out by previous studies as relevant explanations for cost overruns.10
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3PrefaceThe research presented in t
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5Table of contentsPART 1 ..........
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7Summary/abstractThe work reported
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101 IntroductionProjects are increa
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collection and interpretation of th
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15normative agendas, in other words
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17world of projects. The choice of
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19Figure 3 Sources and dataThe proj
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21In line with Flyvbjerg (2006b), t
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233 Concepts and constructs of thep
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25by most BOKs and textbooks in pro
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274 Main topics covered by the rese
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294.2 Empirical indications from ex
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31Budget proposed by the Norwegian
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3330 %Difference (%) from the propo
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3520 00018 000Cost development from
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37In paper 9 (Magnussen 2009a) an a
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395 Conclusions and directions for
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41estimates must be implemented at
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43Klakegg, Ole Jonny, Terry William
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45List of government documents 11Fi
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47Part 2 - Papers1. Magnussen, Ole
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Paper 1Magnussen, Ole Morten, and K
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AbstractCost overruns and delays ar
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Cost effectiveness considerations:
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demonstrates another fundamental is
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Figure 1 The Extended Quality Assur
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Expected effects of the revised qua
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ReferencesBerg, Peder, Kilde, Halva
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International Journal of Project Ma
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O.M. Magnussen, N.O.E. Olsson / Int
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Paper 3Magnussen, Ole M., and Nils
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MANAGING THE FRONT-END OF PROJECTS:
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Olsson, Samset, Austeng and Lädre
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1995; Packendorff, 1995), mainly cr
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to a better way of managing the fro
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Figure 1 Basic structure of the ind
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from empirical investigations has b
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among organizations, not individual
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actors, the relationships are repro
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the network approach has been used
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established based on the views of i
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IHFJKGAELDMBCA - The focal projectB
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the NDEA. The communication strateg
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Directorate for Cultural Heritage (
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the project. The basic activity was
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assumed to be more important than o
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Another interesting observation was
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REFERENCESEngwall, Mats. 2003. No p
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Söderlund, Jonas. 2002. On the dev
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Flexibility at Different Stages in
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Reproduced with permission of the c
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Paper 5Olsson, Nils O. E., and Ole
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PAPERSGovernance Frameworks for Pub
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supporting setting of and achieving
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The study proceeded as follows:•
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y the Chief of Defence Materiel, he
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(within MoD but independent of thep
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Norway U.K. (MoD) U.K. (OGC)Charact
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from the external consultants was s
Page 140 and 141: governance. International StudiesRe
Page 142 and 143: Paper 7Williams, Terry, Ole Jonny K
Page 144 and 145: The development of the frameworksUK
Page 146 and 147: notable characteristic of the Norwe
Page 148 and 149: Office to the National Audit Office
Page 150 and 151: highly complex and changing decisio
Page 152 and 153: ARTICLE IN PRESSAvailable online at
Page 154 and 155: ARTICLE IN PRESST. Williams et al.
Page 164 and 165: Paper submitted to the Internationa
Page 166 and 167: One constraint is that actual costs
Page 168 and 169: In other words, the QA scheme is a
Page 170 and 171: author, there apparently are no stu
Page 172 and 173: 20,0 %15,0 %10,0 %5,0 %0,0 %P50 est
Page 174 and 175: The pre-eminent result is that the
Page 176 and 177: Results from the analysis of the de
Page 178 and 179: more fundamental assessments of pro
Page 180 and 181: Paper 10Magnussen, Ole M. 2009. Exp
Page 182 and 183: Explaining cost estimate difference
Page 184 and 185: changes and external factors. Facto
Page 186 and 187: 30 %Difference (%) from the propose
Page 188 and 189: Table 2 Areas associated with expla
Page 192 and 193: ReferencesFlyvbjerg, B., Holm, M.K.
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