CH. 8

Question 1

Some reasons of having cost control are..

Answer 1

• It may be a requirement on an open-book contract
• Prep accounting statements including tax prep
• Monitor employee performance
• Track company assets such as construction equip.
• Produce profit for company
• Gauge what type of work the GC should specialze

Question 2

5 phases of cost control

Answer 2

1) Setup (estimate prep)
2) Correct (adjust estimate after buyout & input to cost control/accounting system.
3) Record costs & cost coding
4) Modify the system if costs aren’t being achieved.
5) Prep as-built estimate & input back into company database for future use.

Question 3

What are as-built drawings?

Answer 3

These plans are created after construction of the building is complete. The intention of these plans is to document any deviations from the architect’s original design.

Question 4

What is the estimate process of cost control?

Answer 4

Assembly of measured material quantities, competitive market-rate material unit prices,historical direct labor productivity rates, currents direct labor wage rates, competitive sub quotes and series of markups and fees

Question 5

What happens during the correcting process of the cost control cycle?

Answer 5

The estimate must be corrected with actual subcontract and purchase order buyout values and input into the company’s const control system.

Question 6

What is a work package?

Answer 6

A method of breaking down the estimate into distinct packages or assemblies or systems that match measurable work activities.

Question 7

Preparation of original estimate, schedule and supporting WBS are more efficiently done with this..

Answer 7

Work packages

Question 8

What are cost codes used for?

Answer 8

To allow comparisons of actual cost data with estimated values.

Question 9

What determines wether or not a GC job cost accounting in either the home office or the field?

Answer 9

This is project specified and depends on the size of the const. firm, type of work, type of client and ultimately the contract agreement. (Generally smaller firms will have it’s accounting done in the home office.)

Question 10

Why is it crucial to accurately code actual costs?

Answer 10

If costs are coded, the project team will not really know how they are doing on that specific item of work. The jobsite staff will not be able to monitor and correct construction process if coding errors occur.

Question 11

What is the most time consuming phase of the cost control process?

Answer 11

Cost recording

Question 12

What are some ways PE’s are involved in recording costs?

Answer 12

• Assisting foreman and superintendents develop work packages.
• Enter direct labor cost codes on time sheets
• Enter cost codes on short and long form purchase orders and subcontract agreements.
• Assist the project manager with monthly fee forecast development.

Question 13

What are some reasons costs exceed the estimate?

Answer 13

• The estimate was wrong
• Cost coding or data entry errors
• the client or designer added work
• Inclement weather
• Unforeseen conditions
• Subs/direct crafts/PM other participants are not performing.

Question 14

After cost over-run is understood some corrective adjustments include..

Answer 14

• Utilizing different means/methods/equipment
• Enforcing subcontractor agreements
• Back charging subcontractors
• Changing in-house GC personnel
• Changing sub contractors (yeah right..)
• Change order the client

Question 15

What are as-built estimates?

Answer 15

The term “as-built” refers to the documentation and measurement of a finished project.