Cost Control In Construction

Abstract — Many projects in the world have suffered from cost overruns due to poor performance during the design and execution stages. A key role in the successful completion of the work is the efficient utilization of materials, labors, plants & machinery and overheads. So most of the project managers and contractors find difficulty in controlling project costs due to problems which include delays by clients to release money, lack of materials and equipment etc. This project deals with a certain technique to control costs by analyzing the actual value and planed value of the project and find the suitable means to improve it. This study identifies the solution for the cost management problems in construction.

Keywords: Cost Control, Actual

During the execution of a project, project control and documentation becomes an essential tool to managers and other participants who are in the construction process. The aim of the cost control is to monitor actual cost performance and identify improvement opportunities. Almost all the projects are in need to be guided throughout, in order to receive the expected and required output at the end of the project.. It is important to note that efficient cost control is not limited to the planning stages; we must maintain it throughout the life of the project or business. Cost-control procedures are used to create cost-efficient projects. Cost-control procedures are only useful if they are based on an up-to-date and accurate accounting of the costs incurred by the company with greater insight into potential risk areas. Despite the availability of various project cost control software and cost control techniques, many of the construction projects still do not achieve their cost and time objectives.

EFFECTIVE CONTROL SYSTEM CHARACTERISTICS

Cost Control in every level focuses on input, process and output of a project. At each level of these three stages, it’s very important to have an effective control system. An effective control system tends to have an assured common characteristic. The

The Cost Change Control System in a project is a part of the Integrated Change Control System and documents the procedures to demand, approve, and incorporate changes to project cost performance (Figure 1).

Figure 1. Good progress cost change

When a cost changes enters the system, then there is a need of appropriate paperwork, a tracking system, and procedures to the project manager must follow to obtain an approval on the proposed change. If any changes gets approved for the project, then the cost baseline is updated to reflect the approved changes. For the future potential reference if a request gets denied, the denial must be documented to get clear ideas.

SCOPE AND OBJECTIVE OF THE PROJECT

• To limit the client’s expenditure to within the amount sanctioned.

• To increase company profit and to eliminate unnecessary expenses.

• To get competitive advantage.

• To complete the work in right time with right cost.

• To have a knowledge about the profit and loss of the project throughout the duration of the project life.

• To have an evaluation between the actual project cost performance and that conceived with the original project