Cost control has one purpose directed toward three primary ends, one of which is immediate, and the other two, in the future. The purpose of cost control is to obtain knowledge and information of construction economics. The three primary ends of cost ...
Cost control has one purpose directed toward three primary ends, one of which is immediate, and the other two, in the future. The purpose of cost control is to obtain knowledge and information of construction economics. The three primary ends of cost control are:
1. to plan, manage, and control the original job (immediate);
2. to plan, manage, and control other jobs (future);
3. to make estimates of the costs of other projects (future).
The last of the three objectives of cost control probably is best understood, because it is the logical answer to the inevitable question. From where does an estimator get the cost data to prepare an estimate? There is only one source of valid data for estimating, and that is past jobs, preferably past jobs estimated by the estimator nimself or by his colleagues and performed by the construction company for which he is estimating. Failing that, an estimator nay seek guidance from the past experience of others publicshed in handbooks.
The process of cost control system that this study recommend is as follows: (see Figure 2-1).
Starting with the estimating arrow, the first thing that happens is the quantity survey, which is indicated by the circle lying outside the large circle. All the smaller circles represent programs in its system. The outer circle stands for quantity surveying. The next circle (2) represents the program for pricing the quantities. This program gives, as its output, the final estimate. For cost estimating it is necessary to use stored data on specifications and costs. These data come from the program (1) preceding the circle for cost estimating. This circle is called “cost data file”and represents the progeams for updating the standard specifications and standard costs. In the planning arrow there are four different programs. The first (3), called “activity schedule”represents a techniques for getting production rates and costs for activities in the network diagram. The next two circles (4 and 5) represent programs for budgeting and preparation of bill of materials.
Finally, the contrtol arrow consists of five different programs.
The first (6) is a program for a reorganization of the estimate so that it will fit into the system used for cost control. The second program (7) is for changes in the budget. The third circle (8) represents the program for preparing periodic reports on the project. And, finally, the last program (9) is for preparing a cost analysis. On the basis of this last report the standard costs and standard production rates are updated and entered into the stored register (1) with these data. And so the circle is closed.