Definition
Overruns are the primary cause of failure in the construction industry. A Cost Overrun occurs when the actual expenditure of a project vastly exceeds the original baseline BOQ estimate (due to material price inflation, rework, or poor estimation). A Time Overrun occurs when construction extends far beyond the contractual handover date (due to poor scheduling or labor shortages), which often directly causes further financial hemorrhaging via Liquidated Damages.
Practical Example
A developer estimated a highway project would cost ₹100 Crores and take 24 months. However, delays in acquiring the NA land caused a 6-month Time Overrun. During those 6 months, the price of structural steel spiked by 30%. The project ultimately finished 6 months late at a final cost of ₹130 Crores, suffering a massive ₹30 Crore Cost Overrun.
Application in Superwise
Preventing overruns is the absolute core mission of Superwise. The platform utilizes Earned Value Management (EVM) algorithms to constantly compare real-time site expenditures and DPR progress against the baseline master plan. If the "Cost Performance Index" drops dangerously, directors receive automated red alerts long before the overrun becomes fatal, allowing them to intervene.
Related Feature
Learn how Superwise handles this in our dedicated feature:
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