Project Cost Management
The Objective of Cost Management is to control the project cost so that the project is delivered to the owner within the
owner’s budget. Our Construction Managers work in an open and collaborative manner with the Owner to establish, monitor and
control the cost of the project from project initiation to project turn over and occupancy. Project cost management includes
resource planning, cost estimating, cost budgeting, and cost control. There are two distinct stages of cost control.
- Pre-Construction Estimating and Project Programming
- Cost Management during construction
Pre-construction Estimating and Project Programming
During the Pre-Construction stage the Construction Manager works diligently with the owner to gather cost information
from various sources participating in providing cost estimates at the planning and design phase. We use our 30 years of
estimating experience along with our historical data base and the RS Means Construction Cost Data base. We also work with
local contracting base to qualify and forecast project budgets.
“The key to good Pre-Construction estimating is realistic project scope of work and realistic costs for
each division of these scopes of work.”
Our Professional Architects create realistic designs that meeting the Owner expectations and the programs requirements.
We use the Computer Aided Design Information and establish the work quantities for labor and materials for each individual
project component. This is typically referred as “Bottom up Estimating”.
We then take our detailed information we have gathered and compare this to the National Cost Data Base as provided by
the RS Means Construction Cost Data service. With detailed quantities, local cost qualification of project labor and materials,
and National standard check and balance. All project information is entered into Excel Spread sheet showing Site Project Cost
and Building project cost. These project Costs are used to narrow down and develop a “Project Budget”.
Cost Management during construction
Cost Management as defined by the CMAA:
“Cost Management is the act of managing all or part of the cost of planning, design and construction process
so as to remain within the owner’s budget.”
The role of the Construction Manager is to work with the owner and other members of the team to put together a plan and
process to manage, monitor and control project costs through all phases of a project. We work in an open and collaborative manner
with owners to procure all contracts with local qualified contracting base. We use time proven American Institute of Architect
“Schedule of Values” break down system. Using this “Schedule of Value” showing the cost for each division of work, we develop a
“Cash Flow Schedule”, showing the cost for each division measure against a project schedule monthly break down. Our open and
collaborative work system allows for the owners and all stake holders to actively see and plan for the monthly applications for
payment. Applications for payment are based on Percentages of work completed.
Our Construction Managers, Site Superintendants, and Owners work in an open and collaborative manner, together we manage the
Planned vs. Actual Cost for each project. This method is simple and straight forward. Collectively in our monthly meetings there
is collaborative management of all project costs.
Effective Project Cost Management starts during the planning and design phase, not started only after construction commences.
Our Construction Managers need to work collaboratively throughout the entire life of the project. Changes and construction changes
are a continuous threat to cost control throughout the design and construction of a project. Our Construction Manager use written
change order procedures. We use the “Actual Pricing Format” or Time and Material process to keep track of the actual cost.
We use Primavera Contract Manager to track all project costs. Effective change management starts with solid scope, simple
contract language and high level of communication between all stake holders. Using an open and collaborative format is an
effective to control scope creep and project cost growth.