Cost control is a process where the construction cost of the project is managed through the best methods and techniques so that the contractor does not suffer. Elemental cost breakdown and analysis reference is made to rics building cost information service bcis as an internationally recognised system for construction cost. This paper attempts to identify the cost control methods and procedures that construction practitioners in malaysia are currently utilising and aims. Cost control cost is one of the key performance indicators for projects. A certain amount of flexibility should be built into the standard cost coding system to accommodate various construction clients and projects. Page iv wsdot cost estimating manual for projects m 3034. A discussion of the guiding principles and procedures governing project cost estimating importance of quality cost estimates the reliability of project cost estimates at every stage in the project development process is necessary for responsible fiscal management. Cost control for the project manager long international. The purpose of construction project cost control is to present techniques that help the. For cost control on a project, the construction plan and the associated cash flow estimates can provide the baseline reference for subsequent project monitoring and control. Pdf construction cost management course notes researchgate. As with cost control, the most important decisions regarding the quality of a completed facility are made during the design and planning stages rather than during construction. Construction materials management can be defined as the function responsible for the coordination of planning, sourcing, purchasing, moving, storing and controlling materials in an optimum manner so as a predecided service can be provided at a minimum cost. Change control process university of california, berkeley.
The construction cost control procedure applies to all construction project managers, supervisors, and project administrators. Each form can be used as a template for different cost planning and control. Maintain and update the project budget and cash flow. One of the aims of cost control is to construct at the cheapest possible costs consistent with the project objectives. No agency employee will have sole authority of or responsibility for control. Engineering, procurement and construction epc projects. Construction is the process of preparing and forming buildings and building systems. Develop construction quality control system requirement solution.
The manual provides details on the procedures to be followed and the documents to be used for each. The ability to control the budget means a project manager must. Construction project cost control purdue university. This paper attempts to identify the cost control methods and procedures that construction practitioners in malaysia are currently utilising and aims to get feedback from the respondents whether. Project cost and budget management 7 hamid omidvar, 9. If you cannot manage simple costs, you will have an even harder time handling complex projects. Involved in controlling costs are processes centered around planning, estimating, budgeting, financing, funding and managing costs. Control chart construction chart interpretation response to test results control charts moisture content volumetric control vma air voids mixture troubleshooting quality control plan addenda certification.
Construction program management and inspection guide. How to manage building materials at construction site. This construction practices and procedures manual is intended to provide a quick field guide to the construction. Critical records maintained by the facilities management access control.
The cost performance of a project highly depends on cost variances, which is referred as any deviations in the budget or cost planned. Project control procedure project standards and specifications page 1 of 18 rev. These include a new rhd standard test procedures manual and explanatory guides on a number of topics. Pdf this document presents the basics of construction cost management as a. Construction procedures handbook sections on construction changes and changed field conditions. Construction projects, precontract stage, postcontract stage. Construction starts with planning, design, and financing and continues until the structure is ready for occupancy.
Cost control is the process of reducing the project budget by using. Construction management and economics, 28 5, 509 526. Regular and frequent reporting is necessary to provide accountability, educate and inform stakeholders, and. Document control procedures manual september 2006 documenting communities entry into the nfip. Project management gathers actual costs feedback and compares them to the project budget. Control project activity flow by defining how work is formally authorized. Cost management procedures page 2 cost control systems and procedures should be consistent with, whenever practical, the owners code of cost accounts. The aim of cost control is to produce the best possible building within the budget. Construction cost control procedure construction project. Construction cost management is the entire process, which ensures that the contract amount is within the cost limit of clients approved budget 17. The cost of routine rekeying and keycutting is borne by the affected department. Gee associate administrator office of infrastructure contents construction. Specifying cost monitoring and management procedures 2.
Designing, procuring and installing the little things called bulk materials in the process plant industry can cost up to 60% of the total project costs. Inhibiting factors and mitigating measures in practice. I believe this document is an excellent tool for adding value, enhancing technical expertise, ensuring the highest level of construction quality, and maintaining accountability. Cost and time control inhibiting factors and mitigating. Understanding risks of project budgeting and cost analysis efforts 3. Cost control techniques for construction project irjet. Recommended practices for safety and health programs in. Construction project cost control use these resources to get reliable information about cost control in the construction industry to help you conserve money on large and small projects.
Construction project cost control chapter 1 introduction. Definitive cost estimate mto parsing criteria coordination. The cost plan provides the basis for a cash flow plan, allocating expenditure and income to each period of. Engineering, procurement and construction epc projects opportunities for improvements through automation. Project control procedures are primarily intended to identify deviations from the project plan rather than to suggest possible areas for cost savings. Construction contingency a standardized markup applied to the construction cost of a project that accounts for uncertainties in quantities, unit costs, and minor risk events that typically take place during construction. Construction management or construction project management is the overall planning, coordination, and control of a construction. The main goal of construction industry is to ensure that construction projects are.
The purpose of this document is to provide the project manager, sponsors, steering committee members and all other stakeholders with the standard process for. The importance of cost control in project management. These systems and procedures should also reflect the need of the owner and the cm to collect cost data in a timely manner and report it in a usable format. Control systems are used to manage the costs on construction projects.
A monthly reconciliation of inventory on the books and on the shelves can provide a good measure of your cost control. This design quality control plan qcp outlines the general guidelines associated with. Cost control techniques used on building construction sites in. Project control system manual 3 facilitate the formation of a comprehensive timephased budget by thorough schedule planning and cost estimating. Inventory control an accurate accounting of spare parts can be an important element in controlling costs. The structure of the report has to be defined at the start of the project. Ultimately, the subset of all project management is cost management. Cost management, cost control, budget and cost estimation, project management. For schedules, progress on individual activities and the achievement of milestone completions can be compared with the project schedule to monitor the progress of activities. Project monitoring is the set of project monitoring is the set of procedures and management practices procedures and management practices used to collect information about the used to collect information about the performance achieved or forecasted in performance achieved or forecasted in a project. The expenditures should be given at a stated basedate level and at outturn levels based upon a stated forecast of inflation. Estimating construction costs the key to a good job and successful cost control is the development of a good estimate as the basis for bid submittal. Cost control is a process where the construction cost of the project is managed through the best methods and techniques so that the contractor does not suffer losses when carrying out the activities of the project.