Project management, controls, cost engineering and quantity surveying (2)

The finished bill of quantities, a more detailed document, which has been approved and passed through the quantity surveyor, engineer and architect is what is used for invitation for bids by the contractors.

During construction the quantity surveyor keeps costs on track and comes up with weekly or monthly data and analysis for the sponsors or senior management to have an idea about how well the project is going. Cost variations are also handled with the contractors.

Apart from the project manager, the quantity surveyor can prepare a closing-of-project statement and final account, which will determine to the minutest detail the actual costs for all the project phases and milestones.

Cost engineering

Cost engineering is that area of engineering practice where engineering judgment, principles and experience are utilized in the application of scientific principles and techniques to problems of business and programme planning, cost estimating, economic and financial analysis, planning and scheduling, cost and schedule performance measurement and change control. The fact that the skills and knowledge necessary to deal with cost are quite different from those that are needed to deal with physical design, space and dimension was the primary reason that gave rise to the need for the cost engineering discipline. It is that area of engineering devoted to the entire management of project cost management including estimating, investment appraisal, risk analysis, cost control, cost forecasting, performance measurement and baselines (cost and schedule). As a matter of fact, cost engineers plan, develop budget, monitor and control investment projects. Their core areas of competence as described by ICEC are in the estimation of capital or asset costs including development costs, estimates of operating and manufacturing costs through an asset’s lifecycle, risk assessment and analysis, tracking of scope and cost changes, decision analysis, financial analysis (net present value, rate of return), project cost control, appraisals of existing assets, project analyses, databases, and benchmarking, planning and scheduling, siting studies, productive and investment needs assessment, facility management needs assessment, project feasibility and budget assessment, cost management, procurement management, contract administration, whole-life appraisals, quality audits, value management and dispute resolution.

The typical cost engineer does his job by providing information to sponsors by analysing data collected in the course of project execution in the areas of estimate to completion, estimate at completion, variations, financial scorecard and summary, forecasts, contingency utilization, productivity measures, risk issues, earned and planned values, areas of concern and significant findings.

Project controls

A vehicle is of no use without control mechanisms like the steering, wheels, brakes and the driver. As the Airborne Warning And Control Systems (AWACS) is used by the United States Air Force (USAF) as an advanced detection and early warning system to detect enemy aircraft, battleships and combat vehicles from long distances and perform command and control in an air engagement for attack and defensive purposes, so is project controls used as an early warning project/programme management detection system and process. During project execution, there is the need for monitoring and control. While project execution, monitoring and control processes take place in parallel, the monitoring process is to see how well the project is progressing and control is to make changes if any part of the project has deviated from approved plan. Monitoring and control are purely anticipatory and corrective processes and they greatly enhance the probability that a project will be successfully delivered.

Project controls defined

According to Gary C. Humphreys, “One of the basic requirements of an efficient and effective project management methodology is the ability to determine the true status of a project. Otherwise the development of a plan loses its value, since there is no way to accurately measure and assess how closely the plan is being followed or to monitor the results of corrective actions.”

For the purposes of this article, project controls definition will be limited to project strategy, cost control, cost engineering, cost management, planning, scheduling and risk management areas of a project’s lifecycle. Project controls is the collection of cost and schedule data and other relevant information used in the management, determination and methodical processing of data collected and is used in predicting if such project or programme is going to have budget overruns or not, and if there will be schedule slippages or not. The outcome of this process assists the project manager and the project team to be proactive and take corrective measures if the project is in trouble. The most commonly used methodology for this important aspect of project management is called Earned Value Management (EVM). Project controls is a subset of project management that encompasses the human capital and resources, systems, tools, techniques and processes used to plan, manage, monitor, control and mitigate schedule, cost and risk issues that might want to pose serious threats to or derail an otherwise carefully planned project.

The project controls function does not include the actual management of the project scope and other project management-related activities and knowledge areas such as communication, stakeholder, quality, human resource and procurement management.

Ayodele Akingbade