Cost Control is an obvious objective in Construction Management and Construction Scheduling. It should be recognized that no amount of paperwork achieves this construction cost control. The actual control is achieved through the ultimate decision of the manager that something should be done differently
and the translation of that decision into practice. The paperwork provides guidance on what control actions should be taken and therefore it is rather a cost information system.
The elements of a cost control system are:
A construction cost control system should enable a manager to observe current cost levels, compare them with a standard plan or
norm, and institute corrective action to to keep cost within acceptable bounds.
The system should help to identify where correction action is necessary and to provide pointers as to what actions should be.
Most construction cost control systems have an inordinately long response time. Even the best cost control system would provide information on what was happening last week or last month. Since, in construction projects some activities might finish in a week or a month, then nothing could be done if the performance of such activities was reported to overrun estimates of respective costs.
The following systems and variants of them are in use in the Construction Industry:
The Contractors waits until the Contract is finished then compares expenditure and revenue.
The system is only suitable for very small contracts of short durations. The information provided by this system can induce corrective action in future contracts, and surely not the finished one from which data was extracted.
In this system, the total costs to date are compared with valuations gross of retentions.
It is not suitable for contracts which involve significant set up costs which are distributed over the unit rates.
In this system, costs of various types of work, such as concrete casting, are recorded separately. The costs, both cumulatively and periodically are divided by the quantity of work of each type. This provided unit costs that can be compared with those estimated in the tender. A recommended platform for this system is e- S T M 8 software, which provides an estimating platform as well as an invoicing platform. It has a 15 day free trial, you can find more information in our software section.
There are three developments in construction management which show promise of improving cost control system in the construction industry