ecution. It reflects not only the schedule but also the physical and economic conditions for the execution of the project.
It is almost always necessary to make changes during the progression of an engineering or construction project. These
changes are known as project change orders. In order to achieve effective cost control, it is necessary to alter the project
budget to reflect these changes as they occur. As each change
is approved, its cost and impact on the project budget is determined and incorporated into the overall project plan. Through
the use of the change order system, the project is kept up-to-
Costs are controlled by those managers who are responsible
for project spending. The owner has a considerable impact in
this area since he is directly responsible for the basic design specifications and for changes initiated during project execution. The owner must also enter into the details of contractor's work in sufficient depth in order to assure himself that effective cost control policy is being exercised.
Projects typically evolve through four fairly distinct phases, i.e., evaluation and planning, conceptual engineering, detailed engineering and construction. Cost control is normally implemented for the last three of these phrases. Within these phases, the technique most frequently implemented by the engineer to identify potential cost difficulties consists of comparing that which is actually happening with the predictions of the control budget. Isolating and correcting the problem would typically include the following steps:
1) Comparison - locating the problem.
2) Forecast - predicting the magnitude of the problem.
3) Analysis - Determining the reason for the problem.
4) Corrective action - Selecting a lower cost alternative.
5) Revised forecast - Stating the impact of the corrective
If cost control is to be effective, the management team must exhibit an attitude that emphasi...