What is construction cost management?
Construction Cost Management is a vitally important step in project management. It ideally establishes a base line for the project cost at the various stages of development of the project. This is done so that the project costing does not exceed a certain budget.
A project is not considered to yield profits if it happens to exceed the budget estimated at the start of the project.
What are the different types of estimates involved in construction?
- Design estimate
This is the estimate that accounts for design professionals. It includes screening estimates, preliminary estimates, detailed estimates or engineer’s estimates and forms an integral part of the basic procedure of cost control, because if these estimates are not accounted for, a correct budget cannot be accurately projected.
- Bid estimate
It usually involves subcontractor quotations, quantity takeoffs and construction procedures. If these are not included properly, the whole purpose of construction cost management can be disrupted.
- Control estimates
This is used for monitoring project during construction and is derived from available information. It is used to establish the budget estimate for financing, the budgeted cost after contracting but prior to construction, and even estimated cost to completion during the whole process of construction.
Purpose of cost control management
It is to basically cut down on unnecessary expenses which may seem to be a small price at the moment, but a huge amount when seen in retrospect. In order to curb the expenses to a certain limit, construction cost management as a process is used.
Investors end up putting huge amounts of money into any project. The ergonomic usage of money benefits them, quite like it would to anyone.
To sign off
The post shows how the basic procedure of cost control benefits builders and investors alike. All it needs is apt execution and cutting down on costs that can be done without with.
Frugal usage of money goes a long way. Stretching every dollar helps make the structure far more efficient than it was planned to be. Knowing the value of what comes with a project is what construction cost management leads to.
In the end, sound management always paves way for the perfect execution of whatever project is at hand, whether construction or not. Construction is a tedious process, and management only makes it less stressful eventually.