Project cost control

It is during the design stage that measures to keep the cost of a project within a budget figure are most effective. All possible savings in design need to be sought, not only because this is manifestly in the interests of the employer, but because there are sure to be some unforeseen extra costs that need to be offset by any savings that can be made. Alternative designs of layout or of parts of the works have often to be studied before the most economic solution is found; hence completion of all design before starting construction makes a major contribution to controlling project cost.
The most prolific causes of extra cost are:
not completing the design of the works in all essentials before the contract for construction is let;
not allowing adequate site investigations to take place;
encountering unforeseen conditions;
making changes to the works during construction.
The first two listed above can be avoided by taking the appropriate measures.
The third, however, is not avoidable even if the site investigations have been as reasonably extensive as an experienced engineer would recommend. The last changes during construction can be minimized by ensuring designs are complete before construction commences, and that the employer takes time to assure himself that the works as designed are what he wants. But some changes are unavoidable if, during construction, the employer finds changed economic conditions, new requirements or more up-to-date plant, or new legislation forces him to make a change. The designer should keep aware of possible changes to the employers needs and other technical developments, and not so design the works that possible additions or alterations are precluded or made unacceptably expensive.
If tenders are received which exceed the budget estimate by so large a sum that the employer cannot accept any tender, means of reducing the cost may have to be sought. Generally speaking, down-sizing a part or the whole of the works is usually not as successful in reducing costs as omitting a part of the works. Reducing the output of some works or the size of a structure by 25 per cent, for instance, seldom results in more than 10 per cent saving in cost, and can make restoration at a later date to the full output or size an expensive and uneconomic proposition. If the employer can find some part of the works which can be omitted, this is a more secure way of reducing the cost of a project, and it should be possible to negotiate such an omission with the preferred tenderer.

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