Project Cost Control Procedure
Project Administration, Procedure No: 1
PROJECT COST CONTROL
SECTION 1 - INTRODUCTION
General
1.
Three distinct tasks are required to achieve effective cost control of a project.
These are:a. Planning and Organising the project.
b. Recording and Reporting Costs during the execution of the project.
c. Taking Corrective action if the cost reports indicate such action is necessary. The greatest control of costs is achieved at the planning and organising stage of any project, more so if the design of permanent or temporary works is involved.
Effective cost control is achieved at this stage by means of close analysis of alternative designs (permanent and temporary works), the realistic pricing of alternatives, analysis of alternative methods of construction, realistic pricing of these alternatives, detailed planning of the task, proper purchasing procedures, organising resources, etc, etc.
2. This procedure deals with the Reporting task involved in the project cost control process, and also covers some aspects of the Corrective Action task.
3. This procedure consists of the following sections :
Section 1 This introduction.
Section 2 Cost Code Numbering system and the Estimate Split
Summary.
Section 3A Labour (Manhour reporting).
3B Labour (Cost reporting).
Section 4 Plant Cost Reporting.
Section 5A Commitment Reports.
5B Historical Cost Reports.
5C Escalation.
5D Project Assessment & Summary.
Section 6 Variations and Extras.
Section 7 Exceptional items.
4.
This introductory section of the Project Cost Control procedure discusses the philosophy of the standard cost reporting system, but the details are covered in the other sections above. The system applies in principle to all types of contract, i.e., lump sum, schedule of rates and cost reimbursable, although the details and requirements will vary.
October 2007
Page: 1 of 6
Project Administration, Procedure No: 1
PROJECT COST CONTROL
5.
The procedure describes a manual method of project cost control reporting.
PROJECT COST CONTROL
SECTION 1 - INTRODUCTION
General
1.
Three distinct tasks are required to achieve effective cost control of a project.
These are:a. Planning and Organising the project.
b. Recording and Reporting Costs during the execution of the project.
c. Taking Corrective action if the cost reports indicate such action is necessary. The greatest control of costs is achieved at the planning and organising stage of any project, more so if the design of permanent or temporary works is involved.
Effective cost control is achieved at this stage by means of close analysis of alternative designs (permanent and temporary works), the realistic pricing of alternatives, analysis of alternative methods of construction, realistic pricing of these alternatives, detailed planning of the task, proper purchasing procedures, organising resources, etc, etc.
2. This procedure deals with the Reporting task involved in the project cost control process, and also covers some aspects of the Corrective Action task.
3. This procedure consists of the following sections :
Section 1 This introduction.
Section 2 Cost Code Numbering system and the Estimate Split
Summary.
Section 3A Labour (Manhour reporting).
3B Labour (Cost reporting).
Section 4 Plant Cost Reporting.
Section 5A Commitment Reports.
5B Historical Cost Reports.
5C Escalation.
5D Project Assessment & Summary.
Section 6 Variations and Extras.
Section 7 Exceptional items.
4.
This introductory section of the Project Cost Control procedure discusses the philosophy of the standard cost reporting system, but the details are covered in the other sections above. The system applies in principle to all types of contract, i.e., lump sum, schedule of rates and cost reimbursable, although the details and requirements will vary.
October 2007
Page: 1 of 6
Project Administration, Procedure No: 1
PROJECT COST CONTROL
5.
The procedure describes a manual method of project cost control reporting.