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Lecture 1 - Introduction To Cost Engineering

Cost

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123 views24 pages

Lecture 1 - Introduction To Cost Engineering

Cost

Uploaded by

mavilma.gonzales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CONSTRUCTION

COST
ENGINEERING
Engr. Ma. Vilma P. Gonzales
INTRODUCTION TO
COST ENGINEERING
Origins and History of Cost Engineering
Definition and Benefits
Importance of Cost Engineering in
Construction
Categories of cost engineering
Fundamentals of Cost Engineering
Cost Engineering Techniques
Role of a Cost Engineer
INTRODUCTION
Design and construction projects are dynamic. Costs can change rapidly, and
project design can deviate at any moment, impacting planning, schedules,
and budgets. Many companies have adopted cost engineering strategies to
minimize risk and uncertainty throughout the construction process and ensure
optimum costing and coordination of projects and programs.
Origins & History
Cost engineering originated as a project
management practice in the 1950s in
reaction to the increased complexity of
building, construction, and infrastructure
projects.

It was formally recognized in 1956 with


the establishment of the Association for
the Advancement of Cost Engineering
(AACE International), which represents
practitioners and drives thought
leadership in the field.
Origins & History
In 2006, AACE published a Total Cost
Management (TCM) Framework. The
framework established a proven
methodology for managing costs
throughout the lifecycle of any
construction project. It is a structured,
annotated process map that explains
each practice area of the cost
engineering field in the context of its
relationship to other practice areas
including allied professions.
What Is Cost Engineering?
Cost engineering is a practice that focuses on managing costs and
resources for business operations. This practice includes forecasting and
developing projects in their early stages to predict their success and potential
risks. Professionals apply cost engineering to provide guidelines for allocating
and managing resources.
BENEFITS
Cost engineering helps project managers plan accordingly
and make informed decisions about their projects. Other
important benefits include:
Support in decision-making

This extra support may


increase the confidence that a
project manager has in their
choice by providing tangible
evidence.
Control over resources
Using cost engineering
helps the project team
remain in control of their
allocated resources.

This estimation prepares


the rest of the team to
work from a budget that
adheres to the
calculated estimate.
Timely delivery
Cost engineering also considers a
project timeline when forecasting
the project's progress. Adding
space to the schedule for
estimated risks may help the team
produce the project on time by
eliminating any confusion.
Risk assessment
Cost engineering factors in
an element of risk
assessment.

By identifying potential
deviations from the budget
or original schedule, the
cost engineer can make
suggestions for ways to
resolve or prevent those
risks.
IMPORTANCE
Effective cost engineering can make the difference between the success or
failure of a construction project. Organizations that embrace the benefits of
cost engineering can meet mission objectives and complete projects on time,
on budget, and to specifications.
CATEGORIES
Cost engineering incorporates several different elements, such as
time, risk and material resources. However, the practice includes three
main categories, known as:
Measure
Before allocating any
resources, it's important that to
measure each one accurately.
This includes taking inventory
of supplies or determining the
amount of money available for
the project.
Control
Cost engineering helps
resources remain under
control by providing
allocation guidelines.
Cost engineers track
potential deviations from
the project budget and
find solutions over the
course of the project
Improve
Cost engineering incorporates the
concept of improvement, which
might help the practice become
more accurate over time. Typically,
project managers incorporate cost
engineering practices into the other
elements of management to create
a holistic plan for the project itself.
FUNDAMENTALS
Cost engineering involves the application of engineering principles and
business acumen to enhance decision-making and reduce risks across the
lifecycle of a construction project.

Without the benefit of cost engineering, project owners and contractors may
lack clarity in project planning and execution, which can jeopardize project
timelines and budgets and make it difficult to respond to variables such as
unexpected delays, price increases, or change orders.
CORE CONCEPTS

Cost engineering is an Cost engineering


interdisciplinary practice that encompasses a wide range of
intersects the fields of project cost-related aspects of
management, engineering, engineering and program
and business management. management including cost
estimating, etc.
TECHNIQUES
Cost engineers use software and other industry tools and resources to collect, analyze,
and share cost data.

Techniques and methodologies can vary depending on several factors, including:


·The scope and complexity of the project
·Project phase and maturity
·Industry and project type
·Stakeholder requirements
ROLE
It is the cost engineer’s responsibility to coordinate, direct and lead estimating
efforts to ensure optimum costing and coordination of projects and programs
in line with customer
expectations and manufacturing requirements.

To do this a cost engineer will perform several duties, including but not limited
to:
RESPONSIBILITIES
Define cost estimate
scope
Define assumptions or
constraints
Develop cost element
structure
Collect and monitor data
Develop cost estimating
relationships
Document approach
Customer review
Finalize cost estimate
THE BLUEPRINT
Managing costs and mitigating risk throughout the project lifecycle is key to
any successful construction project.

With accurate cost engineering services, project owners ensure their projects
stay on schedule and on budget – even in the face of unpredictable economic
headwinds and supply/demand challenges.
ASSIGNMENT to be submitted next meeting (April 20).
Use short bond paper.

1. What are the 6 major types of drawings in a


complete set of construction drawings/plans?
Explain what is included in each section and its
purpose.
2. Give at least 40 construction terminologies
(parts of a building plan) and give its tagalog
term and its meaning. Example: Column
(Poste) – definition
3. Draw symbols (#30) used in construction
plans and name it.
THANKYOU
Engr. Ma. Vilma P. Gonzales

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