In today’s design and construction industry, managing and controlling project cost requires a strategic and disciplined management approach to controlling project scope, schedule and budget.
Deployment of critical cost control processes during project implementation can be the difference between a profitable project outcome or the agony of a project experiencing significant cost overruns, missed schedule and delivery milestones, claims and costly disputes. Managing Scope, Schedule and Budget requires the ability to audit all elements of the contract documents.
Implementing a Construction Audit Process is essential to a successful Project Outcome
Successfully managing project cost from the Owner’s perspective includes establishing and implementing procedures to:
- Identify and mitigate risk
- Manage contractor GMP spend
- Reduce/eliminate contractor discretionary spend
- Define/control GMP/budget allowances
- Manage contingency spend
- Reduce non-allowable unit/cost in change orders, etc. Effective construction audit implementation strategies will support and protect the interest of the project to the letter, intent and spirit of the contract documents.
Managing project cost from project inception through closeout requires special and diligent attention to the following:
- Identify areas of increased risk related to the construction project including the determination of the delivery method
- Verifying the accuracy of GMP cost, billings, misc. charges and contract compliance
- Evaluating whether funds are being used in the manner intended by Owner
- Identification and reporting potential cost savings, avoidance and/or recovery
- Identifying areas for process improvement opportunities/eliminating inefficiencies in communication, leadership and team performance.
- Follow-up and remedy of outstanding/identified issues and reporting the status of stated corrective action.
- Effective project close-out program, contract(s) reconciliation of cost, full & final release documents, penalties, back-charges, etc.