Quantifying the cost of quality in construction projects: an insight into the base of the iceberg

Abstract Construction projects are complex endeavors where achieving higher quality standards is challenging due to the intrinsic difficulties and dynamic quality management processes. Several quality management techniques exist to overcome quality concerns, such as the cost of quality (COQ). However, implementing COQ in building construction is challenging due to the absence of a comprehensive quality cost-capturing system. Several studies have tried to quantify different quality costs but are mainly focused on visible failure cost—the tip of the iceberg while the base of the iceberg has rarely been explored. This study develops and quantifies each component of the visible and hidden quality costs—the base of the iceberg. Accordingly, a modified prevention, appraisal, and failure model is developed and applied to the primary data of 25 building projects. The findings highlight the unfamiliarity and passive attitude of the involved construction firms towards quality, thus, incurring higher failure costs amounting to over 12% of the total project cost. Most of this cost remains hidden as traditional accounting systems cannot capture it. Such costs must be eliminated by implementing COQ systems as utilized in the current study. Further, a quality costing framework is established for building projects and applied to the local construction industry to reduce construction failures and improve the quality performance of building projects.