Project Cost Management

Project cost and its control are important managment duties.  During construction, the project cost management system retrieves costs, labor and equipment hours, and production quantities from the job site as work progresses.  The information is used  as the basis for projections for future project work and to ensure ongoing project costs remain within the project's established budget.

Construction Cost Control: Many types of construction cost controls exist.  Some of the more common techniques include: 1) Performing an adequate constructability review to minimize unexpected costs; 2) Establishing a construction cost cash flow plan; 3) Monitoring cost performance to detect and understand variances from plan; and, 4) Ensuring that all appropriate changes are recorded accurately in the cost baseline.  Cost control methods are most successful when executed at regular intervals, whether daily, weekly, monthly, etc.  The snap-shot data obtained at these regular intervals can be compared to pre-construction budget estimates and adjustments can be made, as needed, to keep the project on budget.



Value Engineering to Reduce Costs: Reducing costs without compromising value is a regular goal of owners.  Value Engineering is an organized approach to providing the necessary functions at the lowest cost -- without sacrificing quality or value. Value engineering requirements and guidelines may originate in the project contracts or may be suggested by the contractor.  Regardless of the genesis on any given project, value engineering is a great cost management/reduction tool.