DEMITONResearch / Rework statistics / Contractor bore rework cost directly on 93% of projects; 23% of yearly profit lost
Contractor bore rework cost directly on 93% of projects; 23% of yearly profit lost
No figure nobody has published a defensible one: Contractor bore rework cost directly on 93% of projects; 23% of yearly profit lost (Love, Ika, Ahiaga-Dagbui, Locatelli & Sing, 2019; Australia; moderate confidence).
What it is. Incidence and profit impact, not a share of contract value.
Sample. 98 projects with complete cost data (of 346 projects and 19,605 rework events), one contractor, six years of ledger data, public and private clients, building and infrastructure.
What it is not. Recorded rework was only 0.39% of contract value - the ledgers undercount. Margins were 6-9%, which is why 0.39% wiped out roughly a quarter of yearly profit. The 2018 paper on the same data reports 28%; cite one and say which.
Where it came from
- Love, Ika, Ahiaga-Dagbui, Locatelli & Sing (2019), Make-or-break during production: the costs of reworkabstract; results p.11 of the accepted manuscript · source record