COST

CONTROL
 WHAT IS COST CONTROL?
Costcontrol can be defined as the process of
controlling the expenses in a particular project,
from the starting of the clients briefs, to the
project completion and ultimately the final
account of the aforesaid project.

Theimplementation of systematic procedures

of cost control will give a good result of costs
data collection particularly in estimation and
costs control aspect for future projects
undertaking
 WHAT IS COST CONTROL?
Cost control can be divided into two areas:
- The control of cost during design stage.
- The control of cost during the post contract
stage

Cost control of a project involves:

- The measuring and collecting of costs record
of a project and its progress of works.
- Comparison between planning and actual
progress of physical works on site.
 PURPOSE OF COST CONTROL
Cost Control is to ensure that:
The cost of the building is kept within the agreed
cost limits.
Resources are used at the best advantage.
Give the building client good value for money.
To achieve a balanced and logical distribution
of the available funds between the various part
of the building.
To keep total expenditure within the amount
agreed by the client.
 QUANTITY SURVEYORS
COST CONTROL FUNCTION
Scrutinized the priced bills of quantities
and schedule of rates.
Agree with the contractor on ground
levels, suitable arrangements for dealing
with day works.
Claims for materials price fluctuation.
Costing for variation orders.
Measurements and interim valuation.
 QUANTITY SURVEYORS COST
CONTROL FUNCTION (contd)
Comparison of the estimate with the total
allocated financial resources.
Assessment of profitability of the contract
secured.
Preparation of cash flow projection. Many
construction companies become
insolvent through bad estimating and
planning, ineffective cost control or
inadequate site control.
 COST CONTROL ON SITE
Monitoring performance, comparing estimates
against pre-determined targets and taking
remedial action.
Monitoring performance, comparing estimates
against pre-determined targets and taking
remedial action.
Controlling against tangible physical resources
i.e. materials, machineries and sub-contractors.
Controlling non-tangible items i.e. progress and
productivity (time), costs (money), quality,
safety, information, etc.
 COST CONTROL ON SITE (contd)
Main sources of data include contract bills
of quantities, estimated costs, method
statement and work programme.
Supplementary sources include interim
valuations, up-to-date accounts of labors,
plants, materials and sub-contracted work.
Monitoring the consistent and inconsistent
trends between the value and cost of
each of the earned allowances month by
month.
EFFECTIVE COST CONTROL
Effective cost control can be achieved by:
Establishing that all decisions taken during
design and construction are based on a
forecast of the cost implications of the
alternatives being considered.
Encouraging the project team to design within
the cost plan at all stages and follow the
variation/change and design development
control procedures for the project.
Regularly updating and reissuing the cost plan
and variation orders causing any alterations to
the brief.
EFFECTIVE COST CONTROL (contd)
Effectivecost control can be achieved by:
Checking that the agreed change
management process is strictly followed at all
stages of the project.
Arranging for the contractor to be given the
correct information at the correct time in order
to minimise claims.
Contingency provisions are based on a
thorough evaluation of the risks and are
available to pay for events which are
unforeseen and unforeseeable.
EFFECTIVE COST CONTROL (contd)
Effective cost control can be achieved by:
Submitting regular, up-to-date and accurate
cost reports.
Ensuring that all parties are clear about the
meaning of each entry in the cost report.
Ensuring that the project costs are always
reported back against the original approved
budget.
Plotting actual expenditure against predicted
to give an indication of the projects progress.
 FINANCIAL REPORTING
The purpose is to control a project effectively.
Consists of:
Initial tender figures and expected profit.
Forecast figures at completion for value and
profit.
Current payment application.
Current certified value.
Adjustments to the certified valuation.
Costs to date.
Amount received to date, retention deducted
and certified sum unpaid.