O'Reilly logo

Construction Contracting: A Practical Guide to Company Management, 8th Edition by Richard H. Clough, Glenn A. Sears, S. Keoki Sears, Robert O. Segner, Jerald L. Rounds

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

Chapter 12Project Cost Management

12.1 Introduction

Monitoring and controlling project costs are critically important management functions on all construction projects. After construction begins, the contractor's project cost management system retrieves project costs, in accord with a system developed by the construction contracting firm for the purpose, including labor and equipment hours and production quantities, from the job site as the work progresses. This information is used in two important ways. One is to develop labor and equipment production and cost data to be stored in the company's historical information database in a form suitable for use in estimating the cost of future work.

The other application of cost and production information is to assist in keeping the construction costs of an ongoing project within the established project budget. In order that the contractor can accomplish the project objective of completing the project at or under the project budget, costs which are incurred on the project are monitored in a structured way as the project is constructed, and are compared to budgeted amounts on a regular and continuing basis. Management carefully monitors these comparisons, so that if certain activities or elements of cost exceed project budget amounts, or if they appear to be trending toward exceeding the project budget, management can take action in an effort to accomplish the objective of completing all project activities within the budget. The central ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required