**Giuliano Marella and Valentina Antoniucci \***

ICEA, Department of Civil, Architectural and Environmental Engineering, University of Padova, via Venezia 1, 35131 Padova, Italy; giuliano.marella@unipd.it

**\*** Correspondence: valentina.antoniucci@unipd.it

Received: 15 October 2019; Accepted: 4 December 2019; Published: 10 December 2019

**Abstract:** Cost and time overruns in public mega-projects have been widely studied and considered as interdependent factors in the literature on project management and the public economy. On the other hand, small-scale projects for public works (costing under €100 million) are far more common and contribute to transforming cities and territories even more than mega-projects. Is the development of these kinds of projects affected in the same way by overrun issues? Do cost and time overruns always go hand in hand? The present contribution tries to answer these questions by means of an empirical study on a dataset of 4781 small public works planned and built in the Veneto Region (north-east Italy) from 1999 to 2018. Specifically, the analysis refers to the stage of development when the decision is made to outsource the work, that is, after the project's design and before its construction. Our sample of data is considered both as a whole and clustered by period, cost, contractor and category of work. The results of our analysis and statistical modeling are counterintuitive, suggesting that time overruns do not depend on the cost dimension, whereas norms and regulations play a crucial part in extending the duration of public works. The threshold by law of 1 million € costs implies time-consuming procedures to verify abnormal offers in the bid, that double the average award time from 244 days to 479 days.

**Keywords:** risk assessment; public investment; economic feasibility; time overrun; public works

### **1. Introduction**

A large body of literature is devoted to the adequacy of cost and time assessments for major public projects, focusing specifically on the cost overrun of such projects (see, among others, References [1–3]). Nevertheless, the performance of the project and design of public works does not seem to improve, regardless of location or typology of work. The present contribution is focused on the time needed for the procedures of the awards by public authorities, which is one of the less-studied phases of the development of public work. Specifically, the aim is to verify whether the law's requirements affect the time to fulfill the awards. In times of scarce economic resources and public funds, cost and time overruns are particularly damaging to communities. Worse still, "particular groups, who are often already disadvantaged, are sometimes forced to carry a disproportionate share of negative environmental and social impacts from projects that do not even deliver the promised benefits" [1]. The purchase of works and services by public authorities guarantees the homogeneous urban and regional development of cities and territories. Inefficiencies in public procurement consequently damage individuals and communities, while an efficient delivery of public works may "hamper the full satisfaction of public needs" ([4], p. 809). The cost and time overrun of projects is a relevant issue all over the world, affecting all categories of works, from civil engineering projects like highways, dams and railways to urban landmarks such as theaters, libraries and to urban brownfield restoration works.

Public works are not just a public service to the communities and they are also one of the most relevant issues for the sustainability of the National public economy. Public procurement represents in the OECD's Countries the 12% of Gross Domestic Product (GDP) (while in the EU public procurement is the 14% of GDP) and the 29% of government expenditure on average, which is a total amount of 6 trillion euros per year [5]. Looking at the values and goals of the public economy, "public procurement has been included in the Sustainable Development Goals, as part of Goal 12, Responsible consumption and production" ([5], p. 4).

Much attention has been paid to mega-projects [6], such as the Channel tunnel or Sydney Opera House, because of their vast impact on the public purse and their relevance to regional development. However, the idea that high cost overruns and long delays are only associated with major projects seems to be questionable. A few studies have already described different patterns of cost and time overrun depending on the size of the projects concerned [7] but the effectiveness of public procurement and development methods for small projects has been scarcely analyzed to date. It is well known, however, that most public works are relatively small in terms of cost, physical dimension and time of execution—especially in times of severe budget constraints—in Southern European countries, at least. Hence the relevance of assessing these kinds of project too, which mostly involve the ordinary maintenance of cities and territories. According to Bruzelius et al. [8], mega-projects can be defined as works with an expected lifetime of at least 50 years and implying investments of US \$1 billion and more. The bigger the project, the more difficult it is to forecast the uncertainty and volatility of features affecting the execution of the works. This means that any discussion of large-scale works often boils down to telling the unique story of a given construction and it is very hard to obtain a homogeneous historical track record of such works.

Small-scale projects should be more straightforward and more common than mega-projects, so it should be easier to forecast the cost and time of their completion. The aim of the present contribution is to see whether accountability for small projects is actually greater than for mega-projects by focusing on time overrun issues in public project management. In our scenario, we found that delays are at least partly due to Italian legislation on public works.

Unlike the case of other building works, a public works contract has to strictly follow the various phases imposed by legislation and the structure of public procurement. This aspect has rarely been considered in the existing literature, which focuses mostly on methods for predicting the uncertainty over time in a project's management. The procedures and timing required by public authorities have become more and more relevant in Italy, where the legislation governing public works has changed more than six times in the last 25 years.

To measure the influence of legislation on time overruns for public works in Italy, we collected and analyzed a large dataset concerning public works scheduled from 1999 to 2018 in the Veneto Region (north-east Italy). The maximum investment was always under €100 million and the works ranged from small urban maintenance works to highway projects.

The goals of this paper are—(1) to provide additional original data on the magnitude of time overruns in public works projects in northern Italy; (2) to highlight any differences between the time overruns affecting small-scale projects and the more often-studied major projects; and (3) to suggest an empirical framework to explain time overruns in Italy, focusing on the role of Italian legislation.

The remainder of the article is divided as follows—Section 2 provides an overview of the literature on the topic of time overruns in public works and a brief account of Italian legislation on public works; Section 3 illustrates our dataset and descriptive statistics; Section 4 discusses our model and the results of our statistical analyses; and the Conclusion provides some suggestions for further research on the topic.
