How to manage and control the project cost?

Engineering cost management is with the development of social productivity, with the development of the commodity economy and the development of modern management science and the emergence and development of the product of the progress of the times. Project cost involves all sectors of the national economy, all industries, is an effective tool for project decision-making, development of investment plans and control of investment, is the basis for mobilizing construction funds, is the reasonable distribution of benefits and regulation of the industrial structure of the means to evaluate the effectiveness of the investment in the national economy plays an important role in the development of the national economy.

I. The basic content of project cost management

The task of project cost management is to strengthen the dynamic management of the whole process of project cost, to strengthen the constraint mechanism of project cost, to regulate the price behavior, to safeguard the economic interests of all parties, to regulate the price behavior, and to promote the unity of the micro-benefit and macro-benefit.

The work of project cost management is specifically reflected in the feasibility study stage of the construction program carefully selected, compiled, set a good investment estimate, considering the risk, playing the full investment; from the best selection of construction projects, consulting (supervision) units, design units, and improve the response to the bidding process; a reasonable selection of construction standards, design standards, and to carry out the State's construction policy; according to the estimate of the preliminary design to implement the quantitative and financial design, and actively promote the micro benefit and macro efficiency. Preliminary design to implement the amount of financial design, active and reasonable use of new technologies, new techniques, new materials, optimize the design scheme, compile, set a good estimate, hit the full investment. We will select and purchase equipment and main materials on the basis of merit, select construction and installation units and commissioning units on the basis of merit, and carry out the corresponding bidding work; carefully control the construction drawing design, and implement the "limit design"; coordinate the relationship with all the relevant parties, and reasonably deal with the economic relationship in the supporting work (including land requisitioning, demolition and relocation, and urban construction, etc.); and implement static control and cost control in accordance with the estimated budget strictly. Static control and dynamic management of the cost. Use and manage the construction funds well, ensure the reasonable and effective use of funds, and reduce the interest expenses and losses of funds; strict contract management, and make the settlement of engineering claims; strengthen the responsibility system of project legal person, implement the project legal person's main position of the project cost management work, and set up the economic responsibility system which is closely integrated with the cost within the legal person's organization; the social consulting (supervisory) institutions should actively carry out the project cost for the project legal person. The social consulting (supervisory) institutions should provide whole process and all-round consulting service for the project owners, abide by the professional ethics, and ensure the service quality; the cost management departments should strengthen the service consciousness, and reinforce the construction of basic work (quotas, indexes, prices, quantities, costs, and other information data), so as to provide dynamic and reliable bases for the reasonable determination of the cost of the construction works; each unit and each department should organize the selection, cultivation, and training of cost engineers, and promote the improvement of personnel quality and work level. Improvement of personnel quality and work level.

The specific control process of project cost

The goal of project cost management is: according to the economic law, according to the market, using scientific management methods and means, to reasonably determine the project cost and effectively control the cost. Reasonable control of project cost is in all stages of the construction process to determine the reasonable investment estimates, cost estimates, contract price, settlement price, the completion of the settlement price. Effective control of project cost is mainly reflected in the following aspects:

1, focusing on the design phase of the whole process of cost control:

(1) the implementation of design bidding and design program campaign. The purpose of the project design bidding: encourage competition, promote the design unit to improve management, the use of advanced technology, reduce the cost of the project, shorten the construction period, advanced technology, structurally sound, to meet the requirements of energy-saving buildings and improve the environment, etc., and to improve the overall effectiveness of the investment.

(2) Using value engineering to optimize the design scheme.

(3) Preparation and review of design estimates. Design estimate is an important part of the design documents, is under the control of the investment estimate by the design unit according to the preliminary design (or expansion of the preliminary design) drawings and estimates of the quota (or estimates of the index), the cost of the quota or fee standards (index), equipment, materials, budget prices and other information, preparation and determination of all costs of the construction project from the preparatory stage to the completion of the delivery of all costs of the document.

(4) the implementation of limit design. The so-called limit design is to control the preliminary design in accordance with the approved feasibility study report and investment estimate, and to control the technical design and construction drawings design in accordance with the approved total estimate of the preliminary design, at the same time, the various professions in the premise of ensuring that to achieve the use of the function of the allocated investment limit to control the design, and to strictly control the unreasonable changes, to ensure that the total amount of investment will not be exceeded.

2, construction bidding stage of the project cost control: construction project bidding the introduction of a competitive mechanism, can shorten the construction period, reduce the cost of construction, improve the quality of building products, while the responsibilities of A and B are clearly defined, you can give full play to the construction of building and installation construction enterprises specialized construction advantages, mobilize the enthusiasm of the enterprise and the staff, to promote and strengthen the economic accounting, and to improve the way of enterprise management, to complete the construction task faster and cheaper, to ensure that the total investment is not exceeded. Complete the construction task more quickly and economically.

Select a good method for the preparation of the tender for the project: the preparation method can be used unit price method and comprehensive unit price method. Material unit price method of preparation of the tender project bidding is mostly made on the basis of the project estimate quota and budget quota, this offer and bidding method of preparation in the bidding process more, such as Texas Huaneng Power Plant, Xianghai Thermal Power Plant, Chunhai Thermal Power Plant Installation, Jiujiang Steel Thermal Power Plant, the main standard and BOP project are used in the estimated quota, Jinzhou Petroleum Plant, Liaohe Oilfield oil to coal project, Tiger Beach Sea Animals Museum, etc. The project adopts the budget quota, and all of them are low or reasonably low bid to win the bid.

Do a good job of opening and evaluating bids: in the project bidding, bid opening, bid evaluation is an extremely important part of the bidding process. Only to make objective and fair evaluation of the bid, in order to finally correctly select the best and most suitable contractor, so as to smoothly enter the project implementation stage.

3, the construction phase of the project cost control:

(1) the control of engineering changes. As engineering changes will bring changes in project cost and duration, in order to effectively control the cost, regardless of any party to propose changes in the project, need to be confirmed by the engineer and issued by the engineering change instructions. When engineering changes occur, the engineer is required to deal with and confirm the reasonableness of the changes in a timely manner.

(2) Follow the procedure for handling engineering changes.

①Construction unit (Party A in the construction contract) needs to make changes to the original project design, the increase or decrease of the contract price due to the changes and the loss caused by Party B shall be borne by Party A, and the delayed construction period shall be postponed accordingly.

② Contractor (Party B in the construction contract) requires changes to the original project.

(3) do a good job of determining the price of engineering changes.

4, late stage: late control of the main content includes the preparation of the completion of the settlement and the control of costs after completion.

(1) do a good job of completion and acceptance. Should be designated as the basis for acceptance of completion, acceptance criteria, according to the completion of acceptance procedures to organize the completion of acceptance.

(2) Do a good job of completion of the final account, the correct approval of the value of new assets.

(3) the handling of warranty costs, including the handling of warranty costs caused by investigation and design; the handling of warranty costs caused by construction; the handling of warranty costs caused by unqualified equipment, materials and components; the handling of warranty costs caused by the use of users; and the handling of warranty costs caused by force majeure.

In summary, a project costing personnel not only know the cost, but also know how to manage and control the cost of construction in the project, only in this way, in order to better cope with the challenges of the WTO accession, and better contribute to the development of enterprises and society.

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