2 nd International Conference “From Scientific Computing to Computational Engineering” 2 nd IC-SCCE Athens, 5-8 July, 2006 © IC-SCCE A SPREADSHEET BASED BUDGETING OF PUBLIC CONSTRUCTION PROJECTS Georgios N. Aretoulis 1 , Georgios Papadakis 2 , Glykeria P. Kalfakakou 1 , Demos C. Angelides 1 1 Department of Civil Engineering Aristotle University of Thessaloniki Thessaloniki, 54124, Greece e-mail: garet@civil.auth.gr, web page: http://users.auth.gr/~garet/ 2 Overseas Director ELTER S.A. Athens, Greece e-mail: gpapadakis@elter.gr Keywords: Construction Industry, Cost Estimation, Spreadsheets. Abstract. The process of competitive bidding in the Greek Construction Industry is of vital importance. Usually the task of creating project budgets and producing a bidding offer is taking place in an ad hoc manner and a piecemeal way. That is the main reason why most of the construction projects that span over a long period of time tend to experience severe cost overruns. It becomes quite obvious that the task of estimating should be carefully considered. Creating accurate and reliable estimates could potentially lead to a high level of profit for the project contractor. The prediction of project cost depends on the experience of the cost engineer and the available means and methods for the necessary estimations. This paper presents firstly the architecture for a spreadsheet based system which aims at facilitating the task of project cost estimation. This system is implemented using MS Excel and VBA (Visual Basic for Applications) with a case study. The advantages and disadvantages of such an approach are discussed and at the same time the required improvements and performance of the system are analyzed. Finally, future work concerning a proposal for the development of a more sophisticated and improved approach is presented. 1 INTRODUCTION There have been significant changes nowadays in the construction industry and its means and practices. Markets are now more global in character. There has been a significant decline in public sector construction activity and an increase in the importance of the private client – especially the private corporate client. Technological change, driven by the rise in the use of information technology (IT), has increased site and off-site productivity and enabled pre-project modeling of designs with the use of computers. Procurement patterns have moved away from traditional design – tender – build methods towards design and build and construction management and partnering methods [8] . However some things have not changed. Fragmentation and confrontation are still endemic in the industry’s culture and are slow to change in spite of new methods of contract creating cooperative opportunities. Too many high profile projects still come in late and vastly over budget [8] . It is a fact that in construction project management, time, quality and cost are parameters which require special attention, due to the unique characteristics of construction industry [1] . Variation in project costs usually results in exceeding the initial estimated cost. In general, projects that span over a long period of time tend to present time and cost overruns [2] . The goal is to achieve construction quality, with minimum time and cost [3] . A traditional system reports the amount of money spent, where and by whom, but fails to provide the cost of activities and processes [14] . Conventional procedures and tools have proved inadequate in providing a structured decision aid that maximizes the contractor’s chances of winning a job with maximum potential profit [12] . Traditional cost accounting has been criticized for cost distortion and lack of relevance during the last twenty years [14] .