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32Stage 2: Data structuring and refinement, in which data were recorded into a database accordingto a pre-defined structure. For each project, there is one unique record in the database and aseparate file with hard-copies of its documents. Data also are stored and displayed in aspreadsheet.Stage 3: Data comparison and analysisData for each project were normalized to the same price level as was the actual cost (based oncalculation by the NPRA and stated in the Annual report and in the Final Project Report). Thecalculation is verified by the sector index compiled by Statistics Norway.Stage 4 comprises the presentation and display of data, of which Figure 6 is an example. Themain output of the study of differences in estimates is shown in Figure 6, in which the differencebetween the estimate proposed by the project organization prior to external review and theestimate recommended by the external consultant is calculated in percent. The estimates areassumed to be comparable in the sense that cost data have been brought to the same price leveland factors including price escalation, project changes, etc have been accounted for.
3330 %Difference (%) from the proposed estimate25 %20 %15 %10 %5 %0 %-5 %-10 %-15 %-20 %-25 %-30 %Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08Month of presented reportFigure 6 The difference between the project’s proposal and the revised estimate from theexternal consultant, N=61 (Magnussen 2009b)Figure 6 essentially shows that the experts responsible for external review recommend budgetincreases in two-thirds of the cases analyzed. As shown, a significant part of the differences inrelative terms suggest that for all practical purposes, the estimates are equal (the differences inestimates observed in 30 projects are within the ±5 % range). A few exceptions show thatdifferences in estimates experienced in single projects may be significant, but the averagedifference is 3.4 %. It is assumed that the observed discrepancies in estimates are real. However,the quantitative evidence is insufficient to reveal any possible underlying causes.In paper 9, Magnussen (2009a) analyzed the cost development from the early stages of definitionto the actual outcome of 28 major transportation infrastructure projects subjected to aninstitutionalized framework for up-front assessment and quality assurance. He found that thedevelopment of costs in the early stages of a project has the most significant impact on total cost.This illustrates that a cost control measure introduced at the time of decision to build has littleimpact on project’s budgeted cost. Comparison of estimates with actual outcomes show that costestimates may be more reliable, but that observed cost reductions are negligible, if costs at theearly stages of definition are taken into account. A sub-sample of the 61 projects for which costdata are obtainable, namely 28 transportation infrastructure projects under the Norwegian PublicRoads Administration (NPRA), is examined. In addition to the comparison of estimates made bythe project organization and the external consultant prior to the decision to build, this paper alsoincluded estimates prepared at the early stages of definition. Due to extensive redrafts of projectconcepts, estimates in 14 projects that could be said to be related to comparable projectalternatives, were used to trace the cost development from the earliest stages of definition todecision to build. Estimates were normalized to the same price level and comparisons ofestimates were prepared by the NPRA, the budgets were recommended by the external analyst,and the budgets were set at the times that decisions to build were made. The early estimates mostlikely are inaccurate (typically a ±40 % accuracy level). Consequently, it might be argued thatthese early estimates cannot be compared with later ones. Deviations from the early estimatesmay be characterized as ”tolerated inefficiencies”. Nonetheless, as frequently observed, estimates,despite their high levels of uncertainty, are used to prioritize between projects and even to finalize
Page 1 and 2: 3PrefaceThe research presented in t
Page 3 and 4: 5Table of contentsPART 1 ..........
Page 5 and 6: 7Summary/abstractThe work reported
Page 8 and 9: 101 IntroductionProjects are increa
Page 10: collection and interpretation of th
Page 13 and 14: 15normative agendas, in other words
Page 15 and 16: 17world of projects. The choice of
Page 17 and 18: 19Figure 3 Sources and dataThe proj
Page 19 and 20: 21In line with Flyvbjerg (2006b), t
Page 21 and 22: 233 Concepts and constructs of thep
Page 23 and 24: 25by most BOKs and textbooks in pro
Page 25 and 26: 274 Main topics covered by the rese
Page 27 and 28: 294.2 Empirical indications from ex
Page 29: 31Budget proposed by the Norwegian
Page 33 and 34: 3520 00018 000Cost development from
Page 35 and 36: 37In paper 9 (Magnussen 2009a) an a
Page 37 and 38: 395 Conclusions and directions for
Page 39 and 40: 41estimates must be implemented at
Page 41 and 42: 43Klakegg, Ole Jonny, Terry William
Page 43 and 44: 45List of government documents 11Fi
Page 45 and 46: 47Part 2 - Papers1. Magnussen, Ole
Page 47 and 48: Paper 1Magnussen, Ole Morten, and K
Page 49 and 50: AbstractCost overruns and delays ar
Page 51 and 52: Cost effectiveness considerations:
Page 53 and 54: demonstrates another fundamental is
Page 55 and 56: Figure 1 The Extended Quality Assur
Page 57 and 58: Expected effects of the revised qua
Page 59 and 60: ReferencesBerg, Peder, Kilde, Halva
Page 61 and 62: International Journal of Project Ma
Page 63 and 64: O.M. Magnussen, N.O.E. Olsson / Int
Page 69 and 70: Paper 3Magnussen, Ole M., and Nils
Page 71 and 72: MANAGING THE FRONT-END OF PROJECTS:
Page 73 and 74: Olsson, Samset, Austeng and Lädre
Page 75 and 76: 1995; Packendorff, 1995), mainly cr
Page 77 and 78: to a better way of managing the fro
Page 79 and 80: 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
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governance. International StudiesRe
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Paper 7Williams, Terry, Ole Jonny K
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The development of the frameworksUK
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notable characteristic of the Norwe
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Office to the National Audit Office
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highly complex and changing decisio
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ARTICLE IN PRESSAvailable online at
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ARTICLE IN PRESST. Williams et al.
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Paper submitted to the Internationa
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One constraint is that actual costs
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In other words, the QA scheme is a
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author, there apparently are no stu
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20,0 %15,0 %10,0 %5,0 %0,0 %P50 est
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The pre-eminent result is that the
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Results from the analysis of the de
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more fundamental assessments of pro
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Paper 10Magnussen, Ole M. 2009. Exp
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Explaining cost estimate difference
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changes and external factors. Facto
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30 %Difference (%) from the propose
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Table 2 Areas associated with expla
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agency. In this case, the observed
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ReferencesFlyvbjerg, B., Holm, M.K.
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