Benchmarking construction rework in Australian housing

The direct cost of rework in the construction industry accounts for 12.4% of total contract value. Considering the annual turnover of Australian construction industry was $43.5 billion in 1996, the cost of the rework may be about $5.4 billion per annum. Although defects represent a large cost, few participants in the construction process have a clear understanding of why rework exists, or how to tackle the problem. Construction managers tend to 'bury' the errors on site without determining the causes and effects of those errors. Unlike the manufacturing industry, quality management is not applied consistently in the construction industry; as a result, rework is accepted as an inevitable part of the construction process. This study benchmarks the cost of rework in Australian house construction based on a database on building defects supplied by a government insurance organization and interviews with construction contractors. The results show that type of construction, size of the contacting organization and the use of quality assurance systems effect the cost of rework.