Economics & Finance in Construction - Cost control techniques

Authors Avatar by lindzi31hotmailcom (student)

Lindsay Berry 10/6/13 Unit 11 M3

Cost Control Techniques

Different cost control techniques are used in feasibility studies of a project to assess and evaluate the pros and cons on the best technique to follow for a construction project. All construction projects are different in the way they are designed and constructed. The project method is very important in regards of decisions that have to be made when starting a construction project.  There is a variety of cost control methods that are used for construction industry, that can suit the client’s needs and it’s all about what cost method works best with the project.  

Types of things that need to be taken into consideration to form a realistic budget, a schedule format that is properly assessed on the performance period, a clear and efficient design process that is responsive and forms a good documentation of reasonable quality, risk assessments and recognition on what is available to the owners organization and/or the kind of help available are all key inputs to a construction project. The kind of help available all depends on the business owner and how successful the business is itself.

Types of Project Delivery Methods

Project delivery methods are a system which is used by business owners and agencies for organizing and planning of:

Financial design construction and development of a construction project operations and maintenance services for the structure or facility by complying into some form of legal agreements with one or more entities/parties. The type of method used all depends on the building being designed in terms of what is available. This is why different cost control techniques must be used to evaluate the pro's and con's of a construction project then a good action plan will be in place as to which technique to use and why. Various delivery methods for construction projects are available to meet the needs of each client. The most common delivery methods are: CMAR Construction Manager at Risk, Competitive Bid (Design/Build/Bid), and Design/Build projects.

CMAR Construction Manager at Risk 

CMAR Construction Manager at Risk allows the owner to choose a construction management firm that will consult the owner during the design process and also act as a general contractor during the development of construction work. This delivery method in most cases, the client and the Construction Management firm will come to agreements on GMP a Guaranteed Maximum Price for the execution of the project. This method is more for larger projects that are more technical too manage.

Join now!

Advantages are that the construction management firm is working at the risk of the guaranteed maximum price so it is the construction management firm that is responsible for continuously managing construction costs as well as complying with the client’s interests. The Construction Management firm is in control of the entire process, phases can overlap to some extent which allows the schedule on the construction process work faster. This methods best advantage is on handling changes within the design and scope process.

Disadvantages are the GMP has to be agreed on before the design process begins. So because of this factor the client ...

This is a preview of the whole essay