Cost Management in Construction Projects: Rework and Its Effects

Earned Value Method (EVM) is a basic approach of project cost management. However, this method did not be effectively used in construction project cost management. In accordance with national planning, valuation with bill quantity (VBQ) will be the main valuation mode of construction project in future. According to Code of valuation with bill quantity of construction works (GB50500-2008) and the requirements of EVM, this paper analysis the price compositions and characteristics of construction project under VBQ, decompose and induce various cost elements which contained in the project reasonable, and formed target cost control baseline which use EVM to control construction project cost. The method this paper presents can combine project pricing and project progress effectively, and provides a feasible way for applying EVM in construction project cost management.

The necessary conditions for the existence of an effective cost management system of investment and construction projects are established in the article. Stated aim of the study is to develop methodological provisions of the cost engineering using information modeling technologies. The methodological blocks for parameterization, goal-setting and algorithmization of the information model of an investment and construction project are developed by the author. A list of aggregative cost parameters and an aggregative cost function of an investment and construction project, which is based on aggregative cost parameters, are presented. The processes of budgeting, control and managerial decision-making were considered by the author as functional blocks. The tasks of project budgeting in the scope of an information model, the comprehensive budget model of an investment and construction project and its system parameterization are presented in the article. The main provisions of project cost control and a list of basic cost indicators for control purposes are considered. The requirements of information modeling compatibility with the current subject activity and other software are determined. The author has developed the main provisions of project change management in the scope of information model and recommendations for rational making management decision. An algorithm for a decision-making regarding the realization of an investment and construction project is presented. The prospects of adaptive management of investment and construction projects particularly cost is determined and the vector model of the project behavior under the management action is developed. The main customer requirements to the information model of the investment and construction project are presented. The advantages of using the 5D model in the cost management system for the implementation of an investment and construction project are revealed.

Consideration of closed-end mutual funds (CEMF) as an alternative to other forms of cost management for investment and construction projects became possible as a result of the formation of the legislative framework for CEMF in Russia, the development of the real estate market, and the search by developers for an optimal financial intermediary. As a result of consideration of the issues of cost management of Investment and construction projects in the Russian market in economic research and conferences, it was noted that the CEMF can be used as a comprehensive mechanism for solving problems in development not only for builders and developers of CEMF, but also for real estate owners, banks and other creditors [1]. The purpose of the research is to improve the methodological and practical aspects of cost management of investment and construction projects and to develop cost optimization tools. The subject of the research is the cost management system of a development project. The theoretical basis of the research is the fundamental works of domestic and foreign researchers devoted to the problems of financing, the implementation of Investment and construction projects, the specifics and risks of financing investment and construction projects. Methods of analysis, methods of abstraction, classification, comparison, dialectical and general scientific approaches, quantitative and qualitative analysis are used as the methodological basis of the research.

The power grid construction is an important part of the national infrastructure construction, and the investment for power grid construction is very large. With the rapid development of the power industry, Grid companies pay more attention to apply scientific and rational cost management methods to reduce the cost of power grid construction projects. This paper studies the cost management of power grid construction projects in various periods and establishes the evaluation index system of life-cycle cost management based on life-cycle theory to improve the cost management ability and income from investment.

Moreover, there is an increasing amount of literature covering specific geotechnical risk analysis and management topics. Examples of these are the difference between unsafe geotechnical certainty and safe geotechnical uncertainty (Barends, 2005), the role of the human factor in achieving geotechnical reliability (Bea, 2006), objective and subjective ways of geotechnical risk classification (Altabba et al., 2004), and contractual allocation of geotechnical risk (Essex, 2007).

The construction industry is heavily influenced by the volatility of material prices, which can significantly impact project costs and budgeting accuracy. Traditional econometric methods have been challenged by their inability to capture the frequent fluctuations in construction material prices. This paper reviews the application of data-driven techniques, particularly machine learning, in forecasting construction material prices. The models are categorized into causal modeling and time-series analysis, and characteristics, adaptability, and insights derived from large datasets are discussed. Causal models, such as multiple linear regression (MLR), artificial neural networks (ANN), and the least square support vector machine (LSSVM), generally utilize economic indicators to predict prices. The commonly used economic indicators include but are not limited to the consumer price index (CPI), producer price index (PPI), and gross domestic product (GDP). On the other hand, time-series models rely on historical price data to identify patterns for future forecasting, and their main advantage is demanding minimal data inputs for model calibration. Other techniques are also explored, such as Monte Carlo simulation, for both price forecasting and uncertainty quantification. The paper recommends hybrid models, which combine various forecasting techniques and deep learning-advanced time-series analysis and have the potential to offer more accurate and reliable price predictions with appropriate modeling processes, enabling better decision-making and cost management in construction projects.

PurposeDocumentation plays a key role in navigating the costs of construction projects. Traditional document management systems (TDMS) used in developing countries, however, hinder the achievement of expected cost targets. Although the electronic document management system (EDMS) has been implemented to improve documentation, the Sri Lankan construction industry has failed to effectively adapt to it. Hence, this study aims to provide strategies for the effective application of EDMS to the cost management of Sri Lankan mega construction projects.Design/methodology/approachThis study uses a qualitative approach followed by 12 semi-structured expert interviews. Quantity surveying experts were selected through judgemental sampling. Manual content analysis was used to analyse the data.FindingsThe EDMS is more suitable for megaprojects than traditional methods of documentation in terms of functionality, neutrality, interoperability, space, reversibility and delivery speed. However, there are contradictory views about cost and security. Furthermore, five transitional challenges of EDMS have been identified under the three key themes of cost, stakeholder perception and technical difficulties. Four reasons were also identified as causing these five challenges. Seven suggestions were made to deal with these transitional challenges and three key feasible solutions for the Sri Lankan construction industry regarding the EDMS were identified. Development of Sri Lankan software with low initial cost was highlighted as the most feasible solution.Originality/valueThis is a novel study to investigate the applicability of EDMS to cost management mechanisms of megaprojects in Sri Lanka. The findings reveal transitional challenges and appropriate feasible solutions for EDMS adaptation. This can be applied to the cost management of megaprojects in other developing countries as well.

Cost management, with the information technology used frequently, is the most important link in the process of engineering construction. It is, however, no longer able to adapt to the trend of information technology development by using traditional work methods. The whole process cost focuses on the whole construction process and the overall interests of the project. BIM technology, as an electronic information modeling, provides an efficient information exchange platform, on which the cost management work can be connected at any stages in series with the result of repetitive work reduced and work efficiency increased. The improvement of work efficiency and way can be realized by applying the suitable BIM software to each stage of cost management can improve work efficiency. The paper studies specifically the integration of the whole process cost management on construction engineering. There is a commercial residential project in the case part in the use of relevant BIM software to realize the systematic collaborative management for the whole process of engineering cost. On the basis of the transfer of the cost data to the whole process of construction by using the BIM software, it concludes the route and method of the whole process cost management in the use of relevant software.

Green building is the inevitable trend of the development of the construction industry. One of the key links to realize green building is green construction management. The poor economy of traditional construction hinders the smooth promotion of green construction in the construction industry. This paper mainly from the green building and green construction two concepts of related content research. Through the analysis and discussion of the main principles of project cost management in green construction, this paper briefly expounds some implementation measures of project cost management in green construction. This paper deeply discusses the current situation of green construction project cost management, and puts forward relevant improvement countermeasures. The experimental results show that: construction enterprises should make innovative thinking on construction management and bring green construction into project management. This can provide impetus for the sustainable development of the construction industry.

With the continuous development of China’s national economy, the construction industry, as one of the pillar industries, is in a period of rapid development. However, there are many problems in the construction cost management part, which occupies an important position in the construction industry. Its development speed has not met the requirements of the current society and economy. The lack of information and refinement leads to its low overall level to a large extent, it affects the development of China’s construction industry. BIM Technology can realize information integration for the project cost management, improve the cooperation degree between various parts of the project, realize the cost management system in the whole process of the construction project, and avoid the out of control situation of the project cost. At present, BIM Technology is widely used in the process of housing construction project cost management, and it has been popularized in the cost control of electric power engineering Use. This paper mainly analyzes the application of BIM Technology in power engineering cost.KeywordsBIM TechnologyPower engineering cost

Discussion on Cost Management and Cost Control of Engineering Construction Project

Research on cost management on the efficiency that has been done by Ali and Kamaruzzaman (2010), Memon, Rahman, Aziz (2012), Olawale and Sun (2010), Ceylan (2008), Kasem and Alhaffar (2011), Marshall (2007), in which there are significant variables that showed different results, giving rise to a research gap. Therefore it is necessary to study more about the influence of these variables on the efficiency in cost management in construction projects. Research problem to be studied is to analyze the variables of cost management here is the estimated cost, experience project manager, contract management, cost of machinery or equipment, material price fluctuations, and owner funds, which affects the efficiency (cost performance index), which variables the largest and most significant influence. The study sample was taken from one of the construction projects of the state-owned company in Indonesia, PT. Adhi Karya (Persero) Tbk. between the years 2010-2013, so the number of samples (n) = 60. The sampling method using purposive sampling. Data using multiple regression analysis and hypotheses were tested by t test and F test with a significant level of 5%. This research seeks to examine the effect of the estimated cost (EB), experience of project manager (PPM), contract management (MK), the cost of the machine (BM), fluctuations in the price of materials (FHB), and fund owner (DO) on the efficiency of the project (cost performance index / CPI). The analysis showed that the data used in this study meets the classical assumptions, which include: distributed normal, multicollinearity does not happen, and not happen heterocedastity. From the results of the regression analysis also obtained partial results that the estimated cost, experience project manager, contract management, cost of machinery, material price fluctuations, and the owner fund a significant effect on the efficiency (cost performance index).

The management of large-scale construction projects involves the efficient and effective management of financial resources. The physical cost of a construction project governs the estimation of construction budgets and forecasts. However the Transaction cost economics theory in the construction industry aims to promote the relationship and impact of transaction related costs in construction projects. These costs are related to the economic exchange of a product or service and differ from the actual physical production costs of a construction project. Previous academic studies have identified transaction costs and the factors of influence. However a significant gap in the research area is the analyses of the influence procurement methods have on transaction costs in construction projects. Procurement methods dictate the contractual obligations of the parties and the method in which the project is delivered and essentially represent different types of transactions, thus it is assumed that procurement methods influence transaction costs in construction projects. In this paper, transaction costs are categorized into pre and post contract. The identified factors that are expected to influence transaction costs are associated with predictability of owner’s behavior, predictability of contractor’s behavior, project management efficiency, and uncertainty in the transaction Environment. It is also expected that different procurement systems have various levels of impact on transaction costs. Empirical research is proposed to further test the prepositions in this paper.

Rivalry competitiveness, significant capital investments, and cultural diversity are defining the construction industry’s evolving nature. Therefore, construction organizations have to manage their construction projects’ relationships carefully. Construction management researchers have progressively recognized the intelligible link between Relationship Management and construction project performance. However, few studies structurally reviewed the precipitated progression in this topic. This paper follows a systematic approach to review the literature from reliable databases and prominent journals between 2000–2020 in topics associated with Relationship Management in construction projects. This investigation sets to identify the key characteristics, categorial dimensions, attributes, or enablers of relationship management in construction. More than 500 articles were explored in this systematic review by thorough keyword research, out of which 73 articles were found relevant to this topic where an explicit content analysis was carried out. The findings identified 18 key Relationship Management characteristics classified into four categories: Contract-related, Management-related, Team-related, and General characteristics. Project Managers are recommended to pay specific attention on investigated characteristics to strengthen relationships, promote collaboration, and thereby foster project performance.

The objective of this paper is to analyse communication and information flow within construction projects on the basis of a survey study and a review of the literature. The subject of communication and its impact on carrying out a construction project is widely discussed in global academic literature. Many scholars point to problems with communication and information flow while also reporting that it directly affects construction project time and cost. In the literature, communication is also presented as an essential factor that improves safety and partnering in construction projects. There is also a group of studies that points to the lack of effective communication as the cause of delays and modifications. The authors, in reference to global studies, present the results of a survey study performed in Poland on a group of 160 construction industry practitioners. Information about five research areas was collected. These areas included: general information about communication and information flow between construction project participants, problems in carrying out construction projects in relation to the lack of effective communication, the impact of communication on the success of carrying out a construction project, communication costs, and the need to develop a tool (a digital system) that would support construction project managers in the optimal control over communication between project participants. On the basis of the obtained research results and the literature study, it was found that effective communication and information flow within a construction project can improve the construction process and that there exists a need to develop a comprehensive approach that would aid construction project managers in ensuring a more effective information flow.