Research on countermeasures of project cost control?

What are the countermeasures for project cost control? Here, Zhong Da Consulting will introduce relevant contents for your reference.

1 the concept of project cost?

1. 1 project cost definition?

Project cost generally refers to the sum of the investment needed to complete a project, from project planning to project acceptance and delivery, that is, the investment cost of a construction project composed of planned manpower, material resources and funds. The project cost is the final total investment reflected in the final accounts of construction projects, and the value of fixed assets is determined accordingly. ?

1.2 What is the composition of the construction cost?

The project cost consists of construction and installation costs, equipment, tools and other construction costs. Other expenses for project construction include: (1) land leasing, compensation for land acquisition and demolition and leasing of land use rights;

(2) Management fees, exploration and design fees, research and test fees and financial expenses of the construction unit;

(3) Joint debugging fee and production preparation fee related to future production;

(4) Basic reserve funds and project cost adjustment reserve funds. ?

According to some characteristics of different construction projects, that is, the same subproject has the same unit of measurement, and the consumption of labor and materials required to complete each unit of measurement is basically the same, can the quantitative standard of capital and resource consumption of each project provided by engineering construction quota be used as a scientific basis for forecasting, planning, allocating and controlling capital and resource consumption?

2 Analysis of the current situation of project cost management in China?

2. 1 Current situation of project cost management in China?

There is still a big gap between China's current project cost management and developed countries (such as Britain and the United States). These gaps are mainly manifested in the research, popularization and application of engineering project cost management system and modern engineering project cost management theory and method. China's project cost management system is still bound by the standard quota management system introduced by the former Soviet Union in the 1950s, but now basically no country or region in the developed world is still using the system of managing project cost according to the unified standard quota. Most of them determine and control the project cost according to the characteristics of the project, the statistical data of similar projects, the construction market and the specific construction technology level and labor productivity. ?

2.2 Analysis of the causes of out-of-control project cost?

There are many factors that cause the project cost to get out of control. Among them, I think there are mainly the following factors:

(1) The company violated the capital construction procedures, hastily launched the project under the condition of insufficient preparatory work in the early stage of the project, and engaged in "design and construction at the same time", focusing only on the project progress and ignoring the economic benefits of the project. ?

(2) There is a lack of scheme comparison in the preliminary design stage, and the design depth cannot meet the requirements of budget preparation. In order to pass the examination and approval, keep the investment low. Moreover, the investment estimation is influenced by the competent department or the construction unit, which is often tendentious, resulting in inaccurate planned investment and inherent irrationality. ?

(3) The Chief Executive will form a "mother-in-law", so he will modify the original preliminary design scheme at will in the construction drawing design stage, increase the scale of the project, raise the design standard, and increase the project cost. ?

(4) In recent years, due to the role of market economy, the prices of equipment and building materials have risen rapidly, various charging items have been increasing, and the charging standards have been continuously improved. ?

(5) The current budget quota is complicated in content, basis and calculation, and new technologies and applications cannot be incorporated into the quota in time, resulting in many omissions and various coefficients, so it is difficult to reasonably determine the project cost when implementing such quotas. ?

(6) Determining the project cost is not only related to many management departments, but also driven by interests. The construction unit, design unit and construction unit all have their own economic purposes, and their willingness to reflect the level of project cost is also different, which is one of the many factors that cause the project cost to be out of control. ?

2.3 Problems in China's project cost management?

(1) The cost management method is traditional and backward. ?

Theoretically, our existing project cost management methods are not based on activities and processes, but on traditional cost management methods based on resources and departments. In China's existing cost management methods, the determination of project cost is divided from budgetary estimate to budget according to direct cost, indirect cost, planned profit and tax, in which the direct cost of project cost is determined with reference to national or local standard quota and cost information, not according to specific operation activities and specific operation processes. The indirect cost in the project cost is determined according to the amount of direct cost and the charging ratio stipulated in the standard quota. Although we have carried out the reform of project cost management according to the method of "quota, market price and competition fee" in recent years, our project cost determination method is still based on resources and departments in essence. ?

(2) The standards are formulated by the planning department, and the indicators are backward and rough. ?

In the process of project implementation, our method of controlling project cost is also based on resources and departments, not on activities and processes, because in project cost control activities, our control objects and methods are aimed at the consumption and occupation of specific resources and the cost allocation of specific departments, not directly at specific activities, specific activities, specific jobs and job activities. Therefore, in fact, the existing project cost management method in China is the traditional project cost management method based on resources and departments. This method is an indirect and extensive cost management method, which can not meet the needs of developing the whole process cost management. ?

(3) Pay attention to post-event accounting and ignore pre-event budget. ?

In recent years, our research on the theory and practice of cost and cost accounting management proves that this traditional cost (expense) management method based on resources and departments has many defects and deficiencies. One of the core issues is that it is a traditional financial accounting method, so it focuses on bookkeeping, accounting and financial status. It is a set of cost or cost accounting methods designed to reflect the actual cost of enterprises or projects, not a project cost management method designed for cost control and comprehensive management of engineering projects. ?

3. Research on countermeasures to control project cost?

3. 1 Change the design idea and carry out quota design?

(1) design is the key link of project decision-making and effective control of project cost.

If we can pay attention to economic benefits, we will be careful in the design stage, and the potential for saving investment is much greater than that in the construction stage. Therefore, doing well the project cost management in the design stage is the primary task to effectively control the "investment out of control".

In order to effectively control the project cost in the design process, it is necessary to change the concept and carry out quota design. In the feasibility study stage, we should focus on the economic rationality of construction projects. Economic benefit analysis should be evaluated according to the indicators specified in the "Methods and Parameters of Economic Evaluation of Construction Projects" issued by the State Planning Commission. The investment estimated by feasibility study is the reference index of quota design. And we should proceed from reality, choose design principles and standards reasonably according to local conditions, and invest infrastructure projects in the most urgent and effective places. ?

(2) The construction organization designer shall be the staff of the overall design director.

The construction organization designer should be able to put forward a complete and practical construction scheme systematically and objectively. Including the necessary steps, methods, measures, machines and tools, time limit for a project, etc. Especially the construction period, which is the internal factor to improve economic benefits. Reasonable construction period is a powerful guarantee to effectively control the project cost. ?

(3) Reform the current budgetary estimate and working system. Train budgetary estimate personnel, improve the quality of engineering budgetary estimate personnel, and change the old concept that budgetary estimate work is only calculation and writing, and everyone can do it. Establish the proper position of budget personnel in engineering construction, cultivate a new generation of technical and economic talents, and establish the necessary work and assessment system. At present, the practice registration of cost engineers is actually an important work to play its positive role in controlling investment in engineering construction and establish a system. ?

3.2 The extensive tendering and bidding is beneficial to control the project investment?

Bidding is an important reform measure in the construction industry, which is conducive to breaking the division and monopoly of regions and departments, protecting competition, eliminating inertia and invigorating the construction industry, thus effectively controlling the project cost. As we all know, the designated construction unit of a construction project has many disadvantages, and the project cost is not easy to control. Because construction units often ask for extra project costs for their own interests. Bidding is an effective means to make the project cost more reasonable through competition. The construction cost of a construction project through bidding is lower than the budget estimate. It can also be said that bidding is also a novel economic responsibility system in the field of infrastructure. After bidding, the winning bidder has signed the construction contract before the construction, and the project cost has been determined, so the preparatory work before the construction will be done quite fully, which will play a restrictive role for all parties concerned. ? The author believes that the bidding work must be carried out simultaneously with the design reform. Judging from the current actual situation, due to the urgent construction period, the general large and medium-sized projects are invited for bidding after the preliminary design or expanded design is completed. From another point of view, we can refer to foreign bidding methods, that is, after the scheme design or preliminary design is completed, entrust relevant departments (such as engineering consulting companies, etc. ) prepare the tender and tender, and then the winning bidder will jointly design the unit to complete the construction drawing. Combined with the actual situation in China, the expanded preliminary design made by the design unit has reached a certain depth (equivalent to the level of foreign bidding drawings), with detailed technical specifications and budget preparation, which can meet the needs of quotation in bidding, enable designers to concentrate more on expanding the preliminary design, make it more reasonable and economical, and greatly improve the design quality. As for the drawing of the construction drawing, it can be gradually drawn by the joint design unit of the winning bidder. In this way, the price is limited, and the original design cannot be changed at will during the construction drawing stage. Therefore, the following problem-establishing the general contracting agency of the project. ?

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