Wednesday 9 February 2022

Cost control in engineering project management

The implementation stage of engineering construction projects, that is, the construction stage, is the process of turning design drawings and raw materials, semi-finished products, equipment, etc. into engineering entities, and is the main stage of realizing the value and use value of construction projects. generally in the construction stage of the contract price has been determined, the goal of cost control has been clear, in this case, give full play to the role of people, the use of various effective measures to strengthen the project cost management is of great significance to the project cost control.

(1) Grasp the management of machinery and materials.

The material cost used in the construction and installation project accounts for about 60% to 70% of the project cost, so in the project management of the installation project, the effectiveness of material management directly affects the project cost. as a construction unit, before construction, the materials required for the project should not only be investigated and studied on the source of supply, widely collect supply information, try to find the best combination point between goods and prices, but also according to the construction organization design and related calculation of the actual needs of the total amount of materials and equipment, the preparation of a good demand plan. 


In the construction of the ten, monthly plan, to fully consider the reasonable operation of funds and the actual situation of the site site and the progress of the project needs, reasonable arrangements for the construction of the machinery required for the site of the advance and exit, especially pay attention to the storage of materials, so as to avoid the occurrence of cement in the custody due to illegal stacking of moisture and the bottom of the lump, steel reinforcement is not well cushioned and rust and can not be used, etc., to avoid unnecessary waste. formulate a reasonable material procurement and storage system, establish a material price information center and a material price supervision mechanism, improve the quality and business level of procurement personnel, ensure that the goods are compared, the purchase of materials with high quality and low price, reduce project costs, and improve corporate profits.

(2) Prepare a reasonable construction organization design and organize the implementation.

construction organization design is used to guide the construction preparation and even the whole process of construction of the technical and economic documents, its content depends on the nature of the project, scale, structure, construction complexity, construction period requirements and the natural economic conditions of the construction area are different, a good construction organization design can guide the project management department to rationally use human, material and financial resources to meet the contract requirements with the minimum input.

the preparation of construction organization design on the project management cost impact is crucial, the use of different construction plans, the cost required is also different, even very different, therefore, before the construction should be organized including technology, quality, construction, machinery, materials, labor and other related personnel, jointly study the preparation of construction organization design, in the construction process for the actual situation of the project to prepare the corresponding construction plan, repeated consideration, optimization plan, more importantly, the construction process should be strictly organized according to the selected construction design or construction plan.

(3) Actively promote the project economic responsibility system, and constantly improve the post responsibility within the project.

At present, most of the construction units of the project management department of the supervision mechanism is not perfect, the project manager constraint mechanism is not perfect, from the project management internal point of view, the project manager's own quality is uneven, management level and ability difference is large, or the sense of responsibility is not strong or financial control is not strict, easy to cause the loss of funds, which will increase the cost of the project, reduce the profits of construction enterprises. at the same time, the economic concept of the project management personnel is not strong, within the project, the technology is only responsible for the division of labor technology and quality, the construction is only responsible for the construction production and project progress, the material is only responsible for the material entry point inspection work, the superficial division of responsibilities is clear, each performs its duties, but in fact, when the contract price is determined, only cost management is an effective way to increase efficiency, and these divisions of labor invariably avoid the core of project management costs. therefore, actively implementing the project economic responsibility system, constantly improving the post responsibility system within the project, establishing the economic awareness of all employees, and establishing a set of engineering project management cost systems that combine responsibilities and rights are very important for strengthening costs and reducing costs. 


For project managers, the project cost control is directly linked to the economic interests of the project manager, fully mobilize the responsibility and enthusiasm of the project manager, control the project cost while grasping the quality of the project, and coordinate the internal management personnel of the project; for construction personnel, they should do a good job in production progress, strictly follow the drawings and specifications of construction, strictly control quality, minimize the economic losses caused by rework or rework caused by quality problems, and carefully check the labor, materials and other costs consumed in the construction process, and do a good job of on-site visas for additions, subtractions or changes to projects; for the material staff, it is necessary to do a good job in the acceptance, storage, use and recycling of materials, and strengthen contact with budget personnel and construction personnel, timely adjust the procurement demand plan of materials, and reduce the losses caused by improper plans. 


At the same time, the quality and quantity should be accepted and accepted, and the unqualified or non-conforming materials should not enter the scene, and the quota picking should also be done to eliminate the waste of materials in all links; for budget personnel. 


They should go deep into the site to grasp the actual construction situation, including the construction progress and the allocation of project management funds, the purchase of materials, etc., and should also cooperate with the project manager to implement the on-site visa, and calculate the material, labor, and mechanical equipment requirements for the next stage according to the construction progress and related quotas. 


So as to provide a basis for the purchase of materials, labor, and mechanical equipment arrangements. in addition, as a budgetary officer, you should carefully study the construction contract, familiarize yourself with the relevant quotas, calculate according to the settlement method stipulated in the contract and the relevant valuation basis, and prepare for the completion settlement.

(4) Do a good job of on-site visa work.

in the implementation of project management, due to the complexity of the construction process and the depth of design, quality and other reasons, there will often be changes in the quantity, geology and schedule of the project, and the parts that need to be modified and changed by the contracting parties in the implementation of the contract must be agreed by both parties and recorded in writing. project management and expenses not included in the contract and budget must be applied for on-site visas in a timely manner to avoid settlement difficulties caused by the subsequent re-signing.

Project management 2 - contract management

The construction contract is the main contract of engineering construction, which clarifies the rights and obligations of enterprises in project contracting, and determines the methods of project bidding, the allocation of project funds, the method of claims, the purchase of materials, the method of completion settlement, etc. 


In the form of law, which is the legal basis for enterprises to organize construction and carry out project operations. due to the characteristics of large investment, long construction period, many types of raw materials involved, complex process processes, strict quality requirements and large geographical environment. 


It is often necessary to contact the design unit and the competent government department in the construction process, all of which determine the content involved in the construction contract is many and complex. at present, due to various reasons, some construction enterprises have a more chaotic situation in the project management contract, and the engineering project management contract personnel of some construction enterprises are not familiar with the contract business and the goal is not clear, which will cause incomplete consideration and careful consideration of the terms when handling the contract business, which will not only create economic losses, but also affect the credibility of the enterprise. 


The current construction market due to the construction team is more, more monks and less porridge, the formation of a serious tilt of the buyer's market, in this case, the construction unit is forced to reduce the cost, shorten the construction period, advance construction, and even meet the unreasonable requirements of the construction unit and many other concessions to win the construction contract, will also cause hidden dangers in the cost of project management. therefore, in order to effectively control the cost of the project and improve the profits of enterprises, we must first start from the management of the construction contract and strengthen the project management of the construction contract.

To strengthen the project management contract, we should first establish a sense of contract, whether it is the decision-making level, the executive level, or the contract management personnel of the enterprise, we should pay attention to contract management, conscientiously study the laws and regulations of the country, master business knowledge, and carefully check when formulating the contract of the construction enterprise; 

Second, strengthen the contract management within the enterprise, combined with the actual situation of the enterprise, formulate the management measures for the contract, clarify the responsibilities, rights and interests of the relevant personnel, and formulate the construction contract terms that not only protect the interests of the enterprise itself but also meet the requirements and bidding commitments of the owner; 

Third, the implementation of the contract counter-signing system, contract review system, after the signing of the contract, conscientiously hand over the bottom, construction personnel, especially on-site construction management personnel should carefully study the contract, clear the scope of construction stipulated in the contract and the responsibilities, rights and obligations of both parties a and b.

Project management 3 - completion settlement

the settlement of the completion of the construction project is the document of the settlement of the project price after the completion of the project after the completion of the project contracted by the construction enterprise in accordance with the construction content specified in the construction project construction contract. the main basis for the preparation of completion settlement is: 

(1) supplementary agreement to the construction contract contract, opening and completion report; 

(2) design construction drawings and completion drawings; 

(3) design change notice; 

(4) on-site visa records; 

(5) material supply procedures or relevant regulations of party a and party b;

(6) the use of relevant project quotas, special quotas and market material prices corresponding to the construction period, and relevant per-settlement documents.

After the project management is completed, all the property and substances of the project must be cleaned up as the basis for the internal cost accounting of the enterprise. 


The construction settlement of the internal part of the package is carefully reviewed according to the construction contract, the original budget, the design drawings and the triage minutes, the design changes, the construction visa, the completion drawings, and other expenses incurred during the construction, and the project cost of each unit and the unit project is re-examined. 


When the completion settlement with the owner and the construction settlement of the internal part of the contract unit are completed and the review and finalization are completed, the project funds should be recovered in a timely manner according to the provisions of the contract, the management of funds should be strengthened, the occupation of enterprise resources and funds should be minimized, and the turnover of funds should be accelerated. after the completion of the project, the construction unit should carefully summarize, conduct cost analysis, calculate the amount of savings or overruns and analyze the reasons, and learn lessons to facilitate the management and control of construction costs for the next project management.

After completing all the contents and experience specified in the contract and meeting the requirements of the contract, the construction unit shall organize professionals to prepare a complete settlement according to the above principles and submit it to the construction unit in a timely manner. 


It is also necessary to do a good job in the claim work of the project according to the construction contract, the claim work should be one of the contents of the settlement of all the completion, and the construction unit should pay attention to the theory and method of the claim. 


When the construction of the project, there are natural factors and social factors other than the content of the contract that cause accidents or delay in the construction period, etc., the construction unit should collect the text basis in time, carefully analyze, submit a claim report, and make up for the losses. claims are a common social phenomenon in market economic activities, a reasonable visa approval behavior based on contracts and laws, and an inevitable thing in modern project contracting. therefore, strengthening management, strengthening contract awareness, and improving the management level of claims play an important role in improving the economic efficiency of enterprises.



The project management cost runs through the whole process of project construction, and the construction unit's project management cost in the construction stage is particularly important. therefore, while paying attention to the construction contract and the settlement of the project completion, the construction unit should base itself on on-site management, strengthen process control, find the best combination point for construction progress, construction quality and funds, standardize the project visa behavior, enhance the awareness of claims, continuously explore ways to reduce project costs, accumulate experience, and improve the cost level of project management in the construction stage of enterprises, so that enterprises can obtain satisfactory economic and social benefits.

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