Estimating Cost Contingency for Highway Construction Projects Using Analytic Hierarchy Process

Based on previous research, usually most of the contractors set a percentage of cost as contingencies. This approach of setting the contingency percentage intuitively could either lead to losing the bid or leaving money on the table. Therefore, the objective of the presented research in this paper is to identify financial impacts of the risk factors during the bidding stages that affect cost contingency and to develop a fast and reliable model that can be used in estimating the expected cost contingency of highway construction projects. A survey was conducted on ninety construction companies and experts in Egypt. The data obtained from the survey was then processed using Analytic Hierarchy Processes technique on the most important fourteen factors out of 175 ones that effect on cost contingency. The developed model was tested using historical completed projects and results show that the predicted cost contingency matches with (96.31%) the average estimated contingency for real case projects. The developed cost contingency model showed robust results.