Citation: Abdel-Monem, M.; Alshaer, K.T.; El-Dash, K. Assessing Risk Factors Affecting the Accuracy of Conceptual Cost Estimation in the Middle East. Buildings 2022, 12, 950. https://doi.org/10.3390/ buildings12070950 Academic Editors: S.A. Edalatpanah and Jurgita Antucheviciene Received: 30 May 2022 Accepted: 1 July 2022 Published: 4 July 2022 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affil- iations. Copyright: © 2022 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). buildings Article Assessing Risk Factors Affecting the Accuracy of Conceptual Cost Estimation in the Middle East Mohamed Abdel-Monem 1 , Kareem Tarek Alshaer 1, * and Karim El-Dash 2 1 Department of Civil Engineering, Shoubra Faculty of Engineering, Benha University, Cairo 4351026, Egypt; m.abdelmonem@feng.bu.edu.eg 2 Department of Civil Engineering, Misr University for Science and Technology, 6th of October City 3236101, Egypt; karim.eldash@must.edu.eg * Correspondence: k.elshaer89@gmail.com Abstract: The construction industry is subjected to more risk and uncertainty than many other industries, in addition to poor risk-tracking records. This usually causes the late completion of projects, surpassing their estimated budgets even without achieving the desired quality and operational requirements. This study first identified the most critical factors affecting the accuracy of cost estimates. A questionnaire has been designed and distributed to construction experts; the results indicated stakeholders’ perception to improve their cost estimation using a proper and predefined risk management plan. Following the respondents’ judgment, this study identified 51 risk factors and their potential root causes and presents a response plan for the most critical risks that might affect cost estimates to improve construction-industry performance. Then, a new simple model has been developed to analyze risk factors affecting the accuracy of conceptual cost estimates, from both clients’ and contractors’ perspectives. The developed model will provide the decision-makers with a list of risks accompanied by guidelines/response plans to mitigate their effect on project cost to help the estimators identify the most effective cost contingency against the project’s scope creep. Keywords: risk management; construction management; cost estimation 1. Introduction Construction projects are more complex than before, technically and contractually, with the negative impacts on their execution having become higher due to increased risks. Thus, in order to manage the project’s risks properly, it is mandatory to identify and analyze risks in a timely manner [1,2]. Cost estimation is an essential process in construction project management. There are numerous uncertainties in the project that may affect determining the probable construction-project cost to be handled by estimators [3]. Increasing uncer- tainties in any project will reduce the reliability of cost estimation and reduce the success of any project; hence, the application of risk management in the construction project in an early stage will increase the chances of the project’s success [4,5]. Regardless of the contract type, any project must prepare a realistic cost estimate [6]. The construction industry’s performance has always remained a matter of concern in the middle east, so identifying the root causes of the cost overrun helps in determining the response plans to reduce the impact on the project performance [7]. A cost estimate is divided into two steps (base estimate and cost contingency). The base estimate is the total estimate of the activities cost, and activities duration is considered as certain value (risk-free). The total allowance of time and cost to cover all uncertainties in the project is the definition of contingency. Monte Carlo simulation is one of the quantitative risk-analysis techniques that helps in improving the contingency. This technique is a process that leans on repeated random sampling and has been used successfully in many industries, including construction projects, for reliable and accurate prediction of project cost and associated probability. The most common cost estimation methodology is adding Buildings 2022, 12, 950. https://doi.org/10.3390/buildings12070950 https://www.mdpi.com/journal/buildings