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Module 1 - Construction Cost Engineering - Introduction

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94 views21 pages

Module 1 - Construction Cost Engineering - Introduction

Uploaded by

JUDIE FONTANOS
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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CONSTRUCTION

COST ENGINEERING
NCE 4402
01
INTRODUCTION
TO
COST
ENGINEERING
COST ENGINEERING
It is the application of scientific principles and
techniques to problems of estimation; cost control;
business planning and management science;
profitability analysis; project management; and
planning and scheduling.
COST ENGINEERING
The primary aim of cost engineering is to
achieve the ideal balance between the
price, quality and time obligations of a
project.
COST ENGINEERING
What is the function of a cost
engineer in a construction
project?
1. Estimates how much the total cost of any project will be
2. Keeps track of costs on a daily basis
3. Makes timely evaluations of cost and scheduling status
4. Forecasts costs based on present trends and remaining
work
 The cost engineer prepares the cost estimate
as requested by his management
 Depending on the complexity of the project, it
ESTIMATING may be done by a single cost engineer or an
entire department
 The senior cost engineer shall coordinate the
preparation of overall estimate.
 By being involved from start to finish, the
senior cost engineer can compare future costs
and scope with what was included in the
estimate.
 The budget is the guideline for all subsequent
cost control, cost forecasting, and the planning
BUDGET stage of the project
 The budget should include the cost of the
entire project, equipment cost, labor cost,
quantities, and all other direct and indirect
costs stated in the estimate
 All future deviations will be measured from the
budget
COST
CONTROL AND  The cost engineer follows the project from
FORECASTING phase to phase in order to be effective in his
cost control function.
 He is also constantly involved in estimating
work in place, cost to complete, the cost of
alternate design and scope changes.
PLANNING  The cost engineer compares the estimates to
AND the actual progress on site using his
SCHEDULING knowledge of the scope, estimating
assumptions, and factors used in the
estimating phase
 Deviations are recognized early and timely
corrective action are facilitated by the cost
engineer
DATA  This consists of analyzing all past and present
projects on an efficient daily basis
ANALYSIS
 Data analysis will allow corrective action to be
taken in case of unfavorable deviations and
data can be used to develop future estimates
 Data analysis is intended to improve team
performance and for the cost engineer to
make informed decisions
DATA  Completeness of Bid Packages
DEVELOPMENT
 Cost of Scope Changes
 Standardization
 Overall Performance Indicator
 Estimating Manuals
Important
Competencies
for a Cost
Engineer
General Capabilities
• Communication
• Planning, organizing, delegating
• Decision making
• Teamwork and relationships
• Quality, follow procedures, support change, accuracy
• Leadership, role model, mentoring, training
Estimating skills and knowledge
• Reading of and quantification from engineering document
• Defining of scope
• Usage of breakdown structures
• Obtaining / using cost data and vendor quotes
• Data analysis & benchmarking
• Labor productivity analysis
• Equipment factored and capacity factored estimating
Cost control skills and knowledge

• Cost control, budgets and forecasts


• Planning / scheduling
• Progress measurement, earned value
• Change management
PROJECT MANAGER VS. COST ENGINEER
Project Manager Cost Engineer
• Organize the work Advises the Project Manager in:
• Coordinate resources in the right • Forecasting
mixture of cost and time, and
• Indicating Status
• Solve problems that could
• Pointing out unfavorable
jeopardize the success of the
trends
project
• Suggesting corrective action
COST ENGINEERING AS A
MANAGEMENT FUNCTION

Profit Project Project


Maximizing Direction Coordination
A skilled cost engineer
has the experience to
anticipate problems and
challenges before they
result in cost overruns
and scheduling slow-
downs.

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