Purpose of Cost Control

Cost management is the completion of the project management triple constraint of cost, schedule, and scope. The time at which major cost savings can be achieved is during planning and design for the project. During the actual construction, changes are likely to delay the project and lead to inordinate cost increases. As a result, the focus of project control is on fulfilling the original design plans or indicating deviations from these plans, rather than on searching for significant improvements and cost savings. It is only when a rescue operation is required that major changes will normally occur in the construction plan.

Good managers should focus upon future revenues, future costs and technical problems. For this purpose, traditional financial accounting schemes are not adequate to reflect the dynamic nature of a project. Accounts typically focus on recording routine costs and past expenditures associated with activities.  Generally, past expenditures represent sunk costs that cannot be altered in the future and may or may not be relevant in the future. For example, after the completion of some activity, it may be discovered that some quality flaw renders the work useless. Unfortunately, the resources expended on the flawed construction will generally be sunk and cannot be recovered for re-construction (although it may be possible to change the burden of who pays for these resources by financial withholding or charges; owners will typically attempt to have constructors or designers pay for changes due to quality flaws). Since financial accounts are historical in nature, some means of forecasting or projecting the future course of a project is essential for management control. In this section, some methods for cost control and simple forecasts are described.

Construction cost control includes:

• Performing an adequate constructability review to minimize unexpected costs

• Establishing a construction cost cash flow plan

• Monitoring cost performance to detect and understand variances from plan

• Ensuring that all appropriate changes are recorded accurately in the cost baseline

• Preventing incorrect, inappropriate, or unauthorized changes from being included in the cost baseline

• Informing appropriate stakeholders of authorized changes

• Acting to bring expected costs within acceptable limits


The objective of cost controlling

To determine the probable cost of the building

To control the design development throughout the project, thereby give good value of money


To give a good value for money to the client

Traditional methods of cost costing are therefore less reliable; it has become increasingly difficult to achieve a balanced design and to ensure value for money