Cost Management and Quantity Surveying

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During the execution of a project, procedures for project control and record keeping become indispensable tools to managers and other participants in the construction process. These tools serve the dual purpose of recording the financial transactions that occur as well as giving managers an indication of the progress and problems associated with a project. The problems of project control are aptly summed up in an old definition of a project as "any collection of vaguely related activities that are ninety percent complete, over budget and late." The task of project control systems is to give a well-balanced indication of the existence and the extent of such problems.

At MEC we consider the problems associated with resource utilization, accounting, monitoring and control during a project. We emphasize the project management uses of accounting information and good Quantity surveying. Interpretation of project accounts is generally not straightforward until a project is completed, and then it is too late to influence project management.

The limited objective of project control deserves emphasis. Project control procedures are primarily intended to identify deviations from the project plan rather than to suggest possible areas for cost savings. This characteristic reflects the advanced stage at which project control becomes important. The time at which major cost savings can be achieved, is during planning and design for the project. During the actual construction, changes are likely to delay the project and lead to inordinate cost increases. As a result, the focus of project control is on fulfilling the original design plans or indicating deviations from these plans, rather than on searching for significant improvements and cost savings. It is only when a rescue operation is required that major changes will normally occur in the construction plan.

Most of the cost management work has to be inputted at Design stage and at MEC a draft architectural solution will have to pass through the estimating process many times, before a final proposal is prepared. This requires that the project will be cost analyzed in its individual components, such Consultancy cost, Building permits and licensing cost, Structure cost, Material and labor costs, Electrical and Mechanical installation cost etc. Regular consultations with the client at design stage are important to secure that he project remains within the budget. From experience it is almost certain that most of the contract disputes arise from bad or inadequate Cost Management mainly at design stage and secondly at construction stage.