"Underestimated" redirects here. For the Jennifer Paige song, see Underestimated (song).
Unexpected incurred costs in excess of budgeted amounts
A cost overrun, also known as a cost increase or budget overrun, involves unexpected incurred costs. When these costs are in excess of budgeted amounts due to a value engineering underestimation of the actual cost during budgeting, they are known by these terms.
Cost overruns are common in infrastructure, building, and technology projects. For IT projects, a 2004 industry study by the Standish Group found an average cost overrun of 43 percent; 71 percent of projects came in over budget, exceeded time estimates, and had estimated too narrow a scope; and total waste was estimated at $55 billion per year in the US alone.[1]
Many major construction projects have incurred cost overruns; cost estimates used to decide whether important transportation infrastructure should be built can mislead grossly and systematically.[2]
Cost overrun is distinguished from cost escalation, which is an anticipated growth in a budgeted cost due to factors such as inflation.
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Standish Group (2004). CHAOS Report (Report). West Yarmouth, Massachusetts: Standish Group.
^Flyvbjerg, Bent; Holm, Mette K. Skamris; Buhl, Søren L. (2002). "Underestimating Costs in Public Works Projects: Error or Lie?". Journal of the American Planning Association. 68 (3): 279–295. arXiv:1303.6604. Bibcode:2013arXiv1303.6604F. doi:10.1080/01944360208976273. S2CID 5807225. SSRN 2278415.
A costoverrun, also known as a cost increase or budget overrun, involves unexpected incurred costs. When these costs are in excess of budgeted amounts...
staging the Games. The costoverrun for Montreal 1976 is the highest costoverrun on record for any Olympics. The cost and costoverrun for Montreal 1976 compares...
related to staging the Games. The cost and costoverrun for Nagano 1998 compares with costs of US$2.5 billion and a costoverrun of 13% for Vancouver 2010, and...
which cost US$15 billion with a costoverrun of 76%, and those of Rio 2016 which cost US$4.6 billion with a costoverrun of 51%. The average cost for the...
often underestimated, resulting in costoverrun during execution. Cost-plus pricing is where the price equals cost plus a percentage of overhead or profit...
to staging the Games. The cost and costoverrun for Lillehammer 1994 compares with costs of US$2.5 billion and a costoverrun of 13% for Vancouver 2010...
and costoverrun at US$51 billion and 289%, respectively. The average cost for the Winter Games since 1960 is US$3.1 billion, while the average cost overrun...
related to staging the Games. The cost and costoverrun for Torino 2006 compares with costs of US$2.5 billion and a costoverrun of 13% for Vancouver 2010, and...
environment will be the key influencing factors. The sunk cost effect may cause costoverrun. In business, an example of sunk costs may be an investment...
either temporarily or permanently, and/or have suffered from significant costoverruns. For a list of successful major custom software projects, see Custom...
billion over budget, and five years late as of 2022[update]. Projected costoverruns exceeding 70% from $7.4 billion to $12.7 billion due to poor planning...
Games, at 324%. London 2012 had a costoverrun of 76%, Sochi 2014 of 289%. It has been documented that cost and costoverrun for the Games follow a power-law...
takeoff or a problem on landing CostoverrunOverrun is the amount of air injected into soft serve ice creams Overrun (film), a 2021 American action crime...
provision may be made for a cost or price realism analysis to take place during the evaluation process. Accountancy Costoverrun Fixed asset turnover Management...
expensive concert hall ever built at the time. The former record holder for cost had been the Walt Disney Concert Hall in Los Angeles at 274 million dollars...
expenditure (capex) Capital recovery factor Capital Cost Allowance (CCA) Cost of capital Costoverrun Illinois Institute of Technology CCP Exam Questions...
estimating process. The cost estimate has a single total value and may have identifiable component values. A problem with a costoverrun can be avoided with...
million, more than the cost of one Boeing VC-25 "Air Force One" airplane. Lockheed Martin blamed the Navy for the costoverruns, saying that more than...
due to the costoverruns. The decision was made following a report by auditing firm KPMG that showed that Canada's purchase would cost C$45bn over 42...
scope creep (see Megaprojects and Risk). Scope creep often results in costoverrun. A "value for free" strategy is difficult to counteract and remains a...
by over 50% because of supply-demand imbalance. Cost escalation may contribute to a project costoverrun but it is not synonymous with it. Over long periods...
the costoverruns on the inaugural Games. The 1987 Games did not occur due to cost issues. In 1986, it was estimated that the 1987 Games would cost $3...
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