Rework in construction development projects can significantly degrade project cost and schedule performance. In a typical construction development project which involves design and construction, rework in the construction phase could increase construction cost by 10%-15% of the contract price (Burati. 1992, Josephson & Hammerlund 1999, Love & Li 2000). The proportion of money and time spent on rework in the design phase is usually higher (Smith & Eppinger 1997). In large, complex projects, undiscovered rework in the design phase can induce rework in the construction phase. The time when rework is discovered during the project development process affects the impact of rework on overall project performance. However, available knowledge is not always successful in improving project managers' understanding of the feedback mechanisms which drive undiscovered rework impacts on project performance, specifically the interaction between different phases during the developing process. The current work uses a system dynamics model of a two phase project development cycle to identify high leverage points for minimizing the impacts of rework on development project performance. Model analysis suggests that failing to discover rework near its creation in the project development process can magnify the impact of rework on project performance.
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