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Management of project cost management


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									Management of Construction Project Cost Management

 Construction Project Cost Management
 Abstract of construction enterprises are able to obtain greater economic benefits and
competitive in the market in an invincible position, The key is that enterprises can
provide the community with high quality, short duration, low energy consumption,
security, good performance of building products. This article mainly on the
construction project cost management were also discussed.
 Key words construction; projects; Cost Management
 【Key Words】 F285, China】 【A】 【Article ID 1008-1151 (2006) 08-0006-03

 market economy, construction companies face fierce competition. Construction
enterprises to face the market, can compete in an invincible position in the market, the
key is able to provide the community with corporate high quality, short-duration, low
energy consumption, security, good performance of building products. In this context,
whether the enterprise can be a large economic benefit, the cost is low key. Therefore,
the construction project cost is the core of the construction project management.
Following the actual work of individuals, to talk about their own cost management of
construction project knowledge:
 1, cost management in construction project management position
 so-called cost management, product cost is the business of forecasting, planning, ,
control, analysis, evaluation, etc., and the development of appropriate cost control
system in general. With the construction project management in construction
enterprises gradually popularized, the growing importance of project cost
management for people to know it can be said, the project cost management in
construction project management is becoming a major sign of the deep development
and indispensable elements, construction Project cost management in construction
management becoming more and more important.
 (a) project cost management is the nature of the construction project management,
 construction of enterprise cost management is the essential feature of every possible
means to reduce costs and improve economic efficiency of enterprises. China's
construction market as independent legal entities and competitors in the construction
business, the reason to implement project management, it is hoped through the
construction project management, complete a long planned economic system to break
the traditional management model is formed, will be engaged in the operation and
management activities from simple instructions to complete the state-assigned
program shift to project-based contracts to meet the needs of the owners of the
building products as the goal, to create economic benefit for the purposes up.
Construction Project Manager Construction Enterprises Department as the most basic
business management organization whose purpose is to reduce all the management
practices construction costs, improve economic efficiency, is the use of project
management principles and various scientific methods to reduce project costs and
create economic benefits to become a source of enterprise efficiency.
 (b) project cost management and construction project management is the core of
  socialist market economy, a construction enterprise management as reflected in
ability to show it can go with the lowest cost the satisfaction of the owners of
production meet the contract requirements of building products. In other words,
construction management and operations, the whole purpose, it is the pursuit of lower
costs with the industry average level, to achieve maximum cost difference. Once the
price of construction products, cost is the determining factor, and this task is
accomplished by the construction project, to complete this task, there is no cost
management as the core of efficient management of all activities, the result difficult to
  (c) project cost management is a measure of the performance of construction project
management objective yardstick
  building construction enterprise must belong to the construction project
implementation and effective monitoring, in particular, to evaluate the performance of
its management to ensure business interests, and improving management quality and
reputation. Construction enterprises of the construction project performance
evaluation, the first is the cost of performance evaluation. To carry out the
construction project cost management of construction projects focused on
performance evaluation, but also for the building construction business construction
projects laid the foundation for assessment and reward, can effectively prevent human
interference with the unjust factors, so as to construction design, implementation the
relevant system, means to provide the basis.
  2, the current project cost management Problems
  (a) cost consciousness is not strong, work does not settle the account
  program of long-term impact of the economic management system, some enterprises
have implemented construction project management, cost management, but the depth
and breadth of a big gap between the level of awareness. For example, project
management, cost management and operational level of awareness on the strong
finish live simply, to do a good living, how save trouble how dry; sometimes as out of
touch management of various functional departments, a budget without accounting for
additional activities did not change, there is no record; have no budget change;
although economic analysis of projects, but unclear about the festival over the reasons
and what stage of the festival over, which division works section over. Some projects
to pre-profit, medium-term preservation, the late loss is not normal. In particular,
some project managers, the owners - the total package - the relationship between the
understanding of sub-units and construction units to build the kind of A and B of the
friendly relations and cooperation, there is no contract concepts and economic
concepts, when the total package, to be owners of Soul the nose, but on the
sub-sympathetic and accommodating.
  (b) the quality of personnel is not high, sense of duty
  present, Chinese enterprises reform experience shows that the bottleneck is the
human resources business development bottleneck, because our current system,
businesses can not in the short time to employees in quality to meet the degree of
market discipline. In addition to projects, particularly small projects, people have a
temporary idea that money earned leave thinking, organizational structure is unstable,
does anything get paid monthly on the line, the company good or bad, success and
personal items little to do, so work perfunctory, muddled along quite common, low
quality. Although the project also has responsibility, but no target cost decomposition,
responsibilities, rights and benefits than the implementation of people, while the
growth of the staff (including project managers) negative emotions, coupled with
on-site turnover is high, work is not continuous, responsibility also difficult to place.
Project profitability, and for everyone, but there is no incentive, the project lost money,
everyone's responsibility, but no punishment, but also before and after the buck, it just
became an excuse for irresponsible persons.
  (c) cost accounting, the sake of discussion, without substantive meaning
  general, although each project with a budget posts, but only by the work plan,
according to the scene as a settlement amount of instruction count one basis, no
settlement will cost the budget and integrate the cost, because there is no phase of the
project cost analysis, not the actual cost and budget costs, project costs more, is not
part project team and the cost of decomposition, so little guidance on project
construction . Jiashang incentive mechanism, reward and punishment measures are
not implemented, the cost section of ultrasonography and not linked to personal
income, so project personnel costs Qingkuangbingbu Guan Li Guan Xin, many people
without really knowing Suo Gongchengbufen the planned cost for an estimated cost
of and the actual cost situation, as long as progress keep pace with the overall feeling
is very good. In addition, the project department personnel due to budget small,
short-handed, generally do not do the construction budget, not the implementation of
quota requisition, material requisitioning system is not perfect, resulting in relatively
large amount of materials approach, the library uses numerous, I expected no
recovery , especially for sub-project, contract form is not-included, contracting team
of convenience, the easy way out, no matter how much, once prepared a full, leftover
material everywhere lost, stolen waste very seriously. In the absence of phase cost
control, no separate part of the project cost control, so there is no after the completion
of the final project cost control, and sometimes severe losses occurred projects where
the problem is unknown. Cost accounting, the sake of discussion, going through the
motions, graphic, no real significance.
  (d) of the project manager's incentive and restraint mechanisms imperfect
  lot of companies affected by the impact of traditional management model, often the
project manager in the Department of the various management, appraisal, reward and
punishment aspects of the rules and regulations established In the project's personnel,
capital, labor, materials and other production factors markets are not doing very well.
Project Manager fully responsible for the implementation of the system, personnel,
material procurement, subcontracting, by the project manager have the final say,
because of its excessive power, the lack of necessary constraints, resulting in the
interests of the company and the project manager constant friction, often decentralized,
and Instead, the cost of out of control. Economic get up the mountain the company,
management together extremely difficult. Some projects are not linked with the
project manager of revenue, cost of power from the company control, the result
project managers to control costs the Department of the lack of enthusiasm of staff.
Each department for their own interests, or even personal interests, too much
interference on the project, who would not be responsible for the cost. Fat individuals,
loss of the company. Although some of the early days of project implementation the
project contract signed contract, but upon completion of the project is not fully
implemented, the reasons for the terms of Some original incentive uncertainty, a
relatively poor maneuverability, it may be due to other causes, rewards and
punishments can not be honored. The result is loss of the seriousness of the contract,
thus contributing to the enterprise wholeheartedly hope that access to appropriate
compensation and reward openly employees will not be realized, contributing to a
number of people use their procurement, approval signature and other powers to seek
private gray income the detriment of the project costs, losses to the enterprise.
 3, to strengthen project cost management recommendations
 thesis from www.5udoc.com [worry documentation] to collect and organize, for the
original author! To address the cost of construction project management problems, to
promote the further development of project management and improved overall
economic efficiency of enterprises to improve the construction, project cost
management process should focus on strengthening the following areas of work.

 (a) must strengthen the concept of project cost
 construction enterprise project management and implementation of the project
management department as an accounting unit, requires the project manager, project
management team and all personnel operating level must be of economic ideas,
concepts, and cost-effectiveness of the concept of the project's profit and loss
responsibility, this is a significant deepening of structural reform measures in the
construction industry. Therefore, to improve project cost management, we must first
of all corporate and project managers on staff to strengthen project cost management
of the Department of Education, only the construction cost of the project a strong
sense of culture, to participate in construction project management and
implementation of staff are aware of each Strengthen project cost management of
construction project's economic benefits and personal income generated by the impact
of various cost management to cost management in construction projects are
implemented and enforced.
 (b) the establishment of project construction cost accountability
 cost of the project management staff of the Department through the project manager
to complete. To effectively control costs, the project manager on the one hand in the
management personnel of the equipment respectively should be concise, while the
duration of work on to make reasonable arrangements; the other hand, cost
responsibility should be separate tasks in all positions, the implementation of the hand,
and try to Shi projects every member of the Department Manager in the pursuit of
cost targets as well as the means to achieve this goal agreement, with uniform norms
and responsibilities and guidance for individual binding steps to ensure that the
construction of the project activities to achieve the desired goal. Meanwhile,
according to the company Project Manager Department of incentives and
disincentives, to develop appropriate incentives and disincentives so that the whole
process of cost management, staff management, dynamic management, forming a
clear division of responsibility to the people's cost management system to reduce
costs become every manager's initiative.
  (c) the formulation of economic and reasonable construction plan
  during the construction process, construction unit must be constructed according to
drawings. However, the drawing is by design unit in accordance with the
requirements of owners and project design where the natural and geographical
conditions, which play a decisive role is the designer's subjective intentions, with little
regard to the construction unit to facilitate the construction will sometimes bring in
many difficulties and troubles, which we often encounter the usual construction.
Therefore, the construction unit should meet the requirements and ensure the quality
of the project owners under the premise of combining the objective reality of the
construction site and seriously active in organizing the pre-construction drawings
reviewing, for the design of unreasonable, come up with their own amendments, in
the owner's and design unit agreement, modify the design drawings, process drawings
reviewing the minutes and the change in account. Undetected in examination of some
of the problems in the construction process, design changes can also be apply. In the
preparation of the construction program, to facilitate the construction of the spirit, low
resource consumption and increase revenue to the comprehensive engineering
considerations, field experience combined with old master, prepared in accordance
with the actual site construction plan. Of course, the construction plan was finalized,
if found unreasonable, not economy, and there are better ways to replace the program,
but also made additional comments on the construction program, with the approval of
the consent of the owners, and other units, put into practice. Do more technical work,
for the construction project cost control, can play a role.
  (d) make the scene safe and civilized construction management
  construction site layout is based on project characteristics and site conditions to cope
with the premise of reasonable arrangements for the construction, there is some
scientific basis. However, in the construction process will likely not perform on-site
layout, which causes human, material lot of waste. For example: materials,
prefabricated, working materials, which are not required stacking sites, resulting in
secondary transportation, not only a waste of manpower, material, component
removal process will result in the loss, for security management, has also brought
difficulties; arbitrary in construction site to open up and block the roads, causing
traffic disruption in the transportation of materials, so that no order of civilized
construction site; drainage system is not smooth, on-site water seriously, resulting in a
muddy field is not conducive to construction personnel access; construction site
power distribution cabinets, circuit emplaced non-standard, to safety management and
caused much inconvenience and so on. Sort of thing, is not conducive to the
construction project cost control factors, we must proceed from the on-site
standardization, effective preventive work, the possible economic losses to a
  (5) attention to quality control costs
  quality cost is the construction project to ensure and improve product quality for all
costs incurred, and does not meet the quality standards for all losses arising from the
cost of and. For example, we look to ensure the quality of concrete, reinforced
concrete in the construction of a large cross section, the use of large cross-section
model template to avoid using many varieties of steel from the fight, the concrete will
appear a number of sub-edge, affecting the appearance quality of finished products ;
in the superstructure construction, not lower in order to ensure a good finished surface
has been the construction of pollution and damage to other materials used for
packaging prior to its protection. Carrying out these tasks, are in need of quality
costing, will occur during the construction quality costs, according to a breakdown of
cost categories Guiji subjects, and then calculate the cost of each period the incidence
of quality, in order to learn to play the whole project cost control effect. There is
another situation, such as our construction quality does not meet the requirements of
owners or to ensure the quality of corporate reputation for poor quality sub-part of the
project to make up deficiencies, the part of the cost must be controlled. Therefore,
construction process, to develop appropriate quality control of the weak points,
preventive measures, to strengthen quality control, so that everyone can pay attention
to quality, so as to achieve overall cost of construction project control.
  (6) control of human, material and resource consumption
  reduction in resource consumption, is equivalent to cost savings, control of resource
consumption, is also tantamount to control costs. Before the project started, the
amount according to the design drawings for the projects, and uniform in accordance
with the provisions of enterprise scale or higher scale preparation of the construction
budget for the construction of the project budget, as a basis for directing and
managing the construction. In the construction of production, the production team's
task arrangement, must adhere to the task of issuing the requisition orders and limits
to the production team for technical disclosure. Construction task list and limit the
content of requisition shall be entirely consistent with the construction budget,
construction budget does not allow non-base changes, do not allow estimates do not
work by fixed and random. Point occurred at the scene assessment work, based on the
characteristics of each company, contact the relevant business sectors, such as plans,
labor, construction and other sectors work together for the determination of odd jobs.
To ensure the construction task list and limit the accuracy of billing requisition require
the production team to complete the project according to the actual amount and the
actual manual, consumption materials accurately make records, relevant business
sector should limit the construction task orders and requisition of serious practical
implementation of inspection and acceptance.
  (7) the establishment of financial revenue system
  construction project to establish monthly financial income system with earmarked to
control the cost of money spending plan. During the construction process, we often
encounter this situation, the department needs to purchase equipment, the departments
need to purchase stationery, we blindly appropriation. And then the rest of the
construction of production due to the need to buy other things, the financial Quewu
shall be granted, making the project a potential loss. If we use this month to the next
month ahead of schedule shall declare the funds to do the only protection
arrangements for key projects, you can avoid these situations occurred. Therefore, we
need to plan for the monthly guide to plan production for the month, monthly
financial income plan, the financial cost of the project members section under the
department plans to use a summary paragraph in accordance with the balance of
scheduling priorities, and then a specific plan with a section reported that the project
manager for approval, and then implemented. Monthly income of the implementation
of the construction project financial planning system, can be done simultaneously
income to avoid support than income, so as to cause financial stress and make more
use of the funds are reasonable, so that unnecessary expenses be tightly controlled.
  (8) with a good incentive system utilizing
  good incentive system only by utilizing to increase production of all employees to
fully mobilize the enthusiasm, be able to better control costs. Project Manager
Department are the most basic production departments, their work is good or bad will
have significant impact on corporate profits, a result, in Contract with must be clear
incentives and disincentives, rewards for the project management department,
including project managers, can annual salary system, but during the construction
period in order to send part of the suitable completion of target cost, then send the
remaining parts; also be the starting base salary, depending on the target completion
costs, the amount extracted by a certain percentage of cost savings, the project team
incentives; also reward new projects; will be promoted to more important the project
manager's job and so on. In the penalties, for failure to achieve targets, in addition to
the imposition of economic sanctions, but also allows the project manager within a
certain number of years are no longer of any new project manager, demotion.
Meanwhile, the project is completed must be honored incentive to reflect the
seriousness of corporate system to facilitate follow-up project of Cost Management.
Control of this thesis in the construction process from www.5udoc.com [worry
document] collection and sorting, for the original author! Context, a key process for
the construction of the team should be amply rewarded, it is particularly important at
the construction site. In the project construction process, particularly for material
consumption processes can be taken directly contracted by the team approach. If we
contract for these projects advance team, after the arrival of the material directly by
them to custody until the construction is, then we can avoid losses and waste of
materials. At the same time to develop a certain system of incentives to stimulate the
initiative and enthusiasm of workers, will we play a good role in cost control. For
sites with turnover expected to be paid to implement recycling systems, such as the
U-card, screws, fasteners, etc., these things are scattered everywhere at the
construction site, even in the backfill process to be buried. Before the project started,
the advance paid to develop the recycling system, workers in the construction process
will be orderly stacked in time recovery, which reduces the loss to our economy, but
also to create some civilized construction site safety conditions .

 [1] The People's Republic of China Ministry of Construction. Construction project
management practices [J]. China Building Industry Press, 2002, (3).
 [2] the national project manager of construction enterprise training materials for the
Committee. Construction Project Management introduction [M]. China Building
Industry Press, 1995.
 [3] project manager of construction enterprises nationwide training materials for the
Committee. Construction Project cost management [M]. China Building Industry
Press, 1995 This paper from www.5udoc.com [worry documentation] to collect and
organize, for the original author! / Center>

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