CBPM Conference 2026 · Vol. 2026, Issue 1

An analysis of the impacts of pre-contract and contract escalation for project success in Short Form Contracts

K’homotho Nester Mokhojane Thabo Khafiso and Kedinametse Mogotloane

Keywords: Pre-Contract and Contract Escalation, Short Form Contracts, Cost Estimation, South Africa

Abstract

This. study examines the effects of pre-contract and contract-stage escalation on project success in Short Form Contracts, as escalation is usually not incorporated leading to several project delivery challenges. It also identifies key drivers of escalation and proposes strategies to mitigate associated risks in construction project delivery. A mixed-methods design was adopted, combining 22 structured questionnaires analysed using descriptive statistics with 15 semi-structured interviews analysed through thematic analysis to provide deeper insight into industry practices and challenges. Findings indicate that escalation significantly affects project performance, leading to cost overruns, schedule delays, and reduced quality outcomes. Poor consideration of escalation during the pre-contract stage results in financial inefficiencies, strained client–contractor relationships, disputes over variations, reduced profitability, and cash flow challenges. Key drivers include inflation, market volatility, and delays in applying escalation adjustments. The study highlights the importance of proactive cost management strategies such as comprehensive cost planning, life cycle costing, realistic budgeting, and strategic investment planning. It further emphasises the need for digital technology adoption, competent contractor engagement, and improved project delivery methods, alongside strengthened regulation, financial literacy, and capacity development. Overall, this research contributes to knowledge by offering an integrated framework for managing escalation across both project stages in Short Form Contracts, improving understanding of cost control, risk management, and project performance outcomes.