Civil Engineering Project Management (4th Edition)
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if not, to make some deletion to reduce the cost before the contract goes out to<br />
tender. The estimate can also act as a guide when comparing tendered prices.<br />
3.6 <strong>Project</strong> cost control<br />
Payment arrangements, risks and project cost estimating 39<br />
It is during the design stage that measures to keep the cost of a project within<br />
a budget figure are most effective. All possible savings in design need to be<br />
sought, not only because this is manifestly in the interests of the employer,<br />
but because there are sure to be some unforeseen extra costs that need to be offset<br />
by any savings that can be made. Alternative designs of layout or of parts<br />
of the works have often to be studied before the most economic solution is<br />
found; hence completion of all design before starting construction makes a<br />
major contribution to controlling project cost.<br />
The most prolific causes of extra cost are:<br />
• not completing the design of the works in all essentials before the contract<br />
for construction is let;<br />
• not allowing adequate site investigations to take place;<br />
• encountering unforeseen conditions;<br />
• making changes to the works during construction.<br />
The first two listed above can be avoided by taking the appropriate measures.<br />
The third, however, is not avoidable even if the site investigations have been<br />
as reasonably extensive as an experienced engineer would recommend. The<br />
last – changes during construction – can be minimized by ensuring designs are<br />
complete before construction commences, and that the employer takes time to<br />
assure himself that the works as designed are what he wants. But some changes<br />
are unavoidable if, during construction, the employer finds changed economic<br />
conditions, new requirements or more up-to-date plant, or new legislation<br />
forces him to make a change. The designer should keep aware of possible<br />
changes to the employer’s needs and other technical developments, and not so<br />
design the works that possible additions or alterations are precluded or made<br />
unacceptably expensive.<br />
If tenders are received which exceed the budget estimate by so large a sum<br />
that the employer cannot accept any tender, means of reducing the cost may<br />
have to be sought. Generally speaking, down-sizing a part or the whole of<br />
the works is usually not as successful in reducing costs as omitting a part<br />
of the works. Reducing the output of some works or the size of a structure<br />
by 25 per cent, for instance, seldom results in more than 10 per cent saving<br />
in cost, and can make restoration at a later date to the full output or size an<br />
expensive and uneconomic proposition. If the employer can find some part of<br />
the works which can be omitted, this is a more secure way of reducing the<br />
cost of a project, and it should be possible to negotiate such an omission with<br />
the preferred tenderer.