Cost of Project Cost Management

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					Cost of project cost management research

 Project Cost Management
 Abstract: The current project cost management of construction enterprises the status
and problems of the engineering bids, project evaluation, construction and production ,
evaluations, and other aspects of cost management of some observations.
 Keywords: engineering projects; cost management

 construction project is the construction of the main business, project cost
management directly restricts the operating results of the project. Project cost
management is to ensure that projects meet quality, schedule and other contract
requirements of the premise, the process of project costs incurred, through the
planning, organization, control and coordination activities, the cost of achieving the
intended goals and reduce costs as much as possible the cost of a scientific
management activities, it is mainly through technology (such as the construction
program development comparison), economic (such as accounting) and management
(such as construction management, rules and regulations, etc.) activities to reach
targets and achieve profit purpose.
 course of project construction cost is the sum of all cost. Cost Management covers a
wide range of project management activities throughout the entire process and every
aspect, from the beginning to the construction project contract bid preparation, site
construction, until final acceptance, were all inseparable from the cost management of
cost management work process is complete, which usually involves: cost prediction,
cost control, cost accounting, cost analysis and cost assessment, etc..

 1 cost estimate

 cost estimate is based on the cost plan for the establishment of a scientific and
rational basis for cost control objectives. Therefore, the cost prediction scheme to
improve the scientific nature of the cost, reduce costs and improve economic
efficiency, has an important role. Better cost control, cost forecasting the first grasp.
Cost prediction is mainly the use of scientific methods, combined with the price under
the terms of the objective of construction, mechanical equipment, personnel quality
and other objectives of the project cost forecast.
 1.1, materials and cost forecast
 (1) analyzing the project with unit labor costs, then the level of wages and social
services in the market conditions, according to schedule and prepare the personnel
input Quantitative analysis of the project if the contract price of labor cost surround.

 (2) materials the proportion of total construction costs significantly, the focus should
be accurately, were the main materials, flooring, DPM, exhaustive analysis of other
materials were re-approved material supply location , purchase price, transportation
and handling charges, provided analysis of fixed material specifications and the actual
specifications of the different materials used, compared with the ratio of the actual use
of a fixed amount of cement content and the differences, pooled analysis of the budget
of other materials, in the actual operation of concrete mixed with a certain amount of
additives to such.
 (3) Mechanical royalties: Tender facilities group in the machinery and equipment
type, quantity generally of scale in the construction methods set counted out, and the
site actual construction has some differences in efficiency are also different, so To
measure the machine actually going to happen to make payments. At the same time,
have to calculate possible machinery rental fees and purchase of new machinery and
equipment required fee amortization expenses, on the main mechanical re-approved
Taiwan class production quotas.
 1.2 change in construction costs caused by the forecast program
 project after winning a bid, must be integrated with the actual situation of the
construction site to develop technically feasible and economically reasonable and
advanced the implementation of construction design, combined with the economic
project site , natural and geographical conditions, construction technology, equipment
selection, construction schedule the actual situation was compared Xing Shi group
construction method used in the different tenders compiled from, or fixed in different
construction methods, in order to truly make a correct prediction .
 1.3 aided engineering costs forecast
 is the auxiliary quantities of quantities or drawings are not given, but is
indispensable to the construction, such as concrete mixing plant, tunnel construction
The three two-lane, high-pressure hole, etc., also need to make light of the specific
conditions of facilities group forecast.
 1.4 runaway cost of risk prediction
 goal of the project cost risk analysis, is implemented in this project to achieve the
objective factors that may affect the analysis in advance, usually in the following
aspects to analyze: First, knowledge of technical characteristics of the project, such as
structural features, geological characteristics. Second, the analysis of the situation unit
owners, including owners of units of credit, availability of funds, organization and
coordination ability. Third, the analysis of project organization within the system,
including the facilities group design, resources and equipment, the quality and so on.
Fourth, the traffic on the project site, energy, power analysis.

 2 project cost management problems

 2.1 Tender link
 due to the external environment and internal management constraints, enterprises in
the tender part of the main problems of the following two aspects: first, an
increasingly competitive construction market, increasing the risk of the tender offer.
Tender units to improve the successful rate, quote each other down offer to reduce the
cost increase to an unacceptable level of budget costs, seriously restricting the
benefits of the project level. Second, the bidding costs difficult to control. As the
construction market management was not standardized, there are relationships,
opportunities to find the situation difficult to control in property investment,
management fee bidding costs account for the proportion of enterprises are relatively
large, and the rise year by year.
  2.2 Project Evaluation links
  project assessment in order to establish uniform standards for the winning project
enterprise should assess the purpose of the project by assessing the objectives of the
responsibility for the preparation of cost estimates, estimates project efficiency
indicators. Then entered into the project objectives based on the assessment results of
the contract responsibility, clear profit targets and other economic indicators. In
practice, the following issues worth noting: First, the project evaluation based on
non-uniform. Lower level of cost management in many enterprises do not build their
own fixed costs, project evaluation criteria often result in non-uniform access costs,
affecting the accuracy of the findings. Second, ideas and methods of project appraisal
strong randomness. Some adopt the method of squeezing down the cost of assessment
that remain after sufficient project management fees for the cost of decomposition.
Advantage of this method is simple, but the violation of objectivity, impartiality,
accuracy assessment is not high, not convincing enough, not to facilitate the
assessment findings to implement. Some reference to similar projects to assess the
assessment process and the reality of the project site is not close enough, there is skim
the surface phenomenon. Third, to improve the effectiveness of project evaluation
indicators, intends to be handed down cost, reduce the project to be undertaken by a
disguised form of labor insurance policy costs, contrary to national policy, against the
State and employee benefits.
  2.3 Construction of production processes
  project assessment and responsibility for project objectives, signed the contract for
the construction of production processes and cost management to provide a standard
basis. Project department should take this as the criterion, combined with the project
construction organization and the engineering characteristics of the target cost
estimate reasonably define the responsibility, the responsibility to the team quantified
and decomposed, personal, serious organizational cost accounting, rigorous control of
costs, the cost of regular and evaluation, good cost management. At present, some
enterprises in practice there are three main aspects: First, the poor work in the project
cost accounting basis. Many companies do not build their own cost accounting system,
cost accounting to determine the object is too simple, artificially simplifies the cost
accounting aspect of cost In doing so, or does not match with the distribution, the
actual cost and budget costs do not correspond, can not meet the cost analysis and
assessment needs. Second, cost management a mere formality, the system constraints
are not in place. Organizational design can not be carried out strictly in accordance
with the construction, any changes to the design specifications, pricing but worth the
time; phased cost analysis too superficial, is not conducive to timely detection of
problems and to solve; contract signing and implementation of the rigorous
specifications is not enough, hidden problem more. Third, the full cost of poor
awareness. Leaders pay enough attention to cost management, cost-arbitrary
decision-making, to improve the cost at the expense to create quality engineering.
 3 Project Cost Management of

 3.1 organizational measures taken to control costs and
 Project Management Team must first clear institutional arrangements and staffing,
clear Project Management Department, company or authority relationship between the
construction team division. Project Management Department is operating
management team, project manager of enterprise legal person designated as his
representative managing the project team, line after the disintegration of the project is
completed, so he is not an economic entity, should the overall interests of responsible,
with good company and should be coordinated companies the responsibility, authority,
benefit relationship.
  followed by those who want to cost control and a clear mandate so that it was
responsible for cost control, to avoid the large costs, and costs over a project deficit of
responsibility are obscure.
 3.2 to take technical measures to control the project cost
 technical measures taken to give full play in the construction phase technical staff's
initiative, the main technical program of the tender for the necessary technical and
economic feasibility studies, to seek more economic and reliable program, thereby
reducing the project cost, including the introduction of new materials, new
technologies, new energy saving technology, such as increased mechanization of
 3.3 to adopt economic measures to control the project cost
 to take economic measures to control project costs include:
 (1) control labor costs: labor costs account for a larger percentage of total project
costs, generally about 10%, so we must strictly control labor costs. Employment from
the number of control, effectively reducing or reducing consumption of certain
processes of man-days to achieve the lower man-days Xiao Hao, control costs and
 (2) the control of materials: materials engineering fees generally total 65% to 75%,
direct impact on project cost and economic benefits. General practice is in accordance
with the amount of the principle of separating price, mainly done in two areas of work.

 3.4 to enhance the quality of the management, control rework
 during the construction process, to strict quality engineering, and always carry my
Office "to the essence, sincerity, better, update the" quality policy, the fixed level of
quality self-test staff, Placement, will be responsible for strengthening the quality of
the construction process and management of self really put into the process, to take
preventive measures to eliminate the common problem of quality management, so that
project a shape, a qualified and eliminate rework phenomenon occurrence, to avoid
unnecessary because of human, financial, material and so a large number of inputs
and increase the cost of the project.
 3.5 to strengthen the process control
 tracking mechanism for the establishment of project information filtering. Careful
analysis of bidding on the construction market information, to distinguish between
project approval and the approval of the authenticity of documents to determine
whether the tracking value, eliminate the false and retain the true. Tender offer lower
prices to establish an early warning mechanism. Historical data to the enterprise or
with the bid quote based on information industry, combined with project type of
investment, regional differences and other factors, determine the cost of the maximum
reduction rate, respectively. By scientific and rational, the Principle of the average
advanced project evaluation work. Scale enterprises to the state budget, based on
combining the actual situation of the enterprise, according to scientific and reasonable,
the average advanced principles of preparation of the fixed cost of construction
enterprises, and as a basis for project evaluation. Part by sub-goal of the project the
responsibility for project cost estimates, project profitability measure, and then based
on assessment results and other factors that enter into comprehensive consideration of
the contract responsibility for project objectives, a clear profit targets, other indicators
and the project appraisal, reward and punishment standards. Construction production
processes must be based on project construction characteristics and manage the
production needs of the organization, according to the principle of controllability to
determine a reasonable division of cost centers and cost centers. Sub-project
implementation team, as the sub-operations team for the cost centers accounted for
separately. Cost centers, cost centers of the division of work must cover all the content
and process control to avoid a vacuum. Responsibility for project objectives must be
controlled according to the principle of cost estimates to the cost centers of secondary
decomposition, cost centers, as the cost center, cost center assessment and reward
criteria. Higher level of cost centers, cost centers and lower the cost center, cost center
responsibility decomposed by the second based on the cost of target responsibility
contract signing, implementation evaluation, reward and punishment. Responsibility
for operating costs of the sub-team must be dead according to the contract price
package, no exceptional circumstances may change, changes in the construction of
change in the owner's approval can be adjusted based on. Must periodically by cost
center, cost center responsibility for the cost of the implementation of the situation
analysis, assessment and reward. The analysis shows that timely corrective. Projects
must improve the internal control system, including the establishment of staff of
personal responsibility, of the expenditures authorized examination and approval
system, capital safety management system, construction site management system,
contract management system, work performance evaluation and reward system, etc.,
and strict in practical work implementation of the project specifications, orderly, and
efficient assessment of indicators of well construction and completion of the
guarantee system. Higher business costs must be to strengthen the management of the
project inspection, guidance and supervision. Key responsibilities include the goal of
the implementation of cost estimates and project management activities to follow the
cost-effective level. Found that the cost of management irregularities, timely
corrective measures and improvements to prevent companies suffered greater losses.

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