Project Management - Money

8/13/2019 Project Management - Money

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MONEY

Often a Project Manager is evaluated on his or her ability to complete a project within budg

effectively managed the project resources and project schedule, this should not be a probl

however, a task that requires the project manager's careful attention. You can only manage

limited number of cost items, so focus on the critical ones

COSTS

CONTINGENCIES

PROFIT


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COSTS

COSTS

ESTIMATE

ACTUAL

VARIABILITY


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CONTINGENCIES

CONTINGENCIES

WEATHER

SUPPLIERS

DESIGN ALLOWANCE


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PROFIT

PROFIT

COST

CONTINGENCIES

REMAINDER


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CAPITAL COST

The capital cost for a construction project includes the expenses related to the inital establishm

Land acquisition, including assembly, holding and improvement

Planning and feasibility studies

Architectural and engineering design

Construction, including materials, equipment and labor

Field supervision of construction

Construction financing

Insurance and taxes during construction

Owner's general office overhead

Equipment and furnishings not included in construction

Inspection and testing


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OPERATION AND MAINTENANCE COST

The operation and maintenance cost in subsequent years over the project life cycle includ

expenses:

Land rent, if applicable

Operating staff

Labor and material for maintenance and repairs

Periodic renovations

Insurance and taxes

Financing costs

Utilities

Owner's other expenses


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CONTINGENCIES / UNEXPECTED COSTS

In most construction budgets, there is an allowance for contingencies or unexpected costs occuconstruction. This contingency amount may be included within each cost item or be included in of construction contingency. The amount of contingency is based on historical experience and tdifficulty of a particular construction project.

EXAMPLE

Construction firm estimates of the expected cost in five different areas in construction

Design development changes,

Schedule adjustments,

General administration changes (such as wage rates),

Differing site conditions for those expected, and

Third party requirements imposed during construction, such as new permits.


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TYPES OF CONSTRUCTION COST ESTIMATES

Construction cost estimates may be viewed from different perspectives because of differen

requirements. In spite of the many types of cost estimates used at different stages of a pro

estimates can best be classified into three major categories according to their functions.

Design Estimates

Bid Estimates

Control Estimates


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DESIGN ESTIMATES

For the owner or its designated design professionals, the types of cost estimates encounte

with the planning and design as follows:Screening estimates (or order of magnitude estim

Preliminary estimates (or conceptual estimates)

Detailed estimates (or definitive estimates)

Engineer's estimates based on plans and specifications


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BID ESTIMATES

For the contractor, a bid estimate submitted to the owner either for competitive bidding or n

consists of direct construction cost including field supervision, plus a markup to cover gene

and profits. The direct cost of construction for bid estimates is usually derived from a comb

following approaches.

Subcontractor quotations

Quantity takeoffs

Construction procedures.


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REFERENCES

http://management.about.com/cs/projectmanagement/a/PM101d.htm

http://pmbook.ce.cmu.edu/05_Cost_Estimation.html#5.9 Applications of Cost Indices to
http://management.about.com/cs/projectmanagement/a/PM101d.htmhttp://management.about.com/cs/projectmanagement/a/PM101d.htmhttp://management.about.com/cs/projectmanagement/a/PM101d.htm

Project Management - Money

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