Keywords: project cost management

At present, the understanding of project cost is different, and there are generally two kinds:

First, it refers to the sum of the costs required to complete a construction project, including construction costs, installation costs, equipment costs and other related costs. In essence, it refers to the construction costs of construction projects, that is, the capital investment of construction projects.

The second refers to the contract price of the contracted project. The contents of the contract include construction, installation and broader "turnkey" projects, including construction and installation, but mainly refer to the contract price of the building.

The second kind of project cost is closely related to the construction enterprise. Therefore, this paper focuses on strengthening the project cost management of construction enterprises, that is, strengthening the management of contract price of contracted projects.

First, the macro control and supervision of the construction contract price

The construction contract price refers to the exchange value expressed in currency when the construction enterprise accepts the entrustment to undertake the task of engineering construction and installation.

Construction contract price is an important part of construction project cost, which directly affects the level of construction project cost and is closely related to the interests of construction enterprises. Therefore, it is a major issue in the field of capital construction.

Under the planned economy system, the construction contract price is determined by compiling the construction drawing budget or budget estimate. Whether it is the former or the latter, it is compiled on the basis of the quota, rate and index stipulated by the state and confirmed or audited by relevant parties. This is the regulation and supervision of the construction contract price under the planned economy, so it reflects the national standard pricing and essentially implements the national price system.

Under the socialist market economy system, the construction contract price is generally realized by bidding, and the construction contract price is equal to the bidding price plus the cost of modification and adjustment allowed by the contract. In the bidding stage, the construction unit prepares the pre-tender estimate according to the current quota, rate, unit price, engineering quantity calculation rules and construction drawings stipulated by the state and local governments, which is the macro control of the construction contract price. However, it is very different from the planned economy: the quotations of all construction units participating in competitive bidding must be compiled in accordance with the bidding documents and the national and relevant quota regulations, and must be determined on the basis of enterprise self-calculation and according to the advanced and reasonable level that can be achieved, which is both feasible and advanced to ensure competitive price advantage in bidding. The bidder's quotation needs to be objectively evaluated by a bid evaluation team composed of relevant experts organized by the construction unit, and its reliability and rationality should be judged by combining technical measures, construction scheme, progress, quality assurance, social benefits and other factors. To this end, the relevant parties have issued bid evaluation rules (including the allowable deviation range between project quotation and pre-tender estimate) to guide and standardize the calibration work and reasonably determine the construction contract price. This is the macro-control and supervision of the construction contract price under the condition of socialist market economy.

Second, strengthen project cost management.

After winning the bid, strengthening the project cost management in the whole construction process is the key to improve the economic benefits of enterprises. According to years of practical exploration, we have the following understandings and experiences on strengthening project cost management.

1, a fair and reasonable contract is the basis of project cost management.

After winning the bid, the construction unit will sign a construction contract with the construction unit. When signing a contract, both parties should be in an equal position and the contract itself should be fair. A seriously unfair contract itself is an illegal contract and has no legal effect. At the same time, we should also be aware of the seriousness of the contract, that is, once the contract is signed, it cannot be changed unilaterally, and then the contract will become the norm of both parties. From the perspective of cost, every sentence in the contract may become the focus of debate between the two sides in the future. Therefore, in the signing stage after winning the bid, the contractor should strive to sign a fair and reasonable contract to lay a good foundation for cost management.

The language in the contract terms should be thorough and detailed, and ambiguous explanations should not be given. Any ambiguous words in this regard may cause undue losses to the contractor.

The rights, obligations and responsibilities of both parties should be clearly defined in the terms of the contract. As we know, the contractor generally has at least the following rights: (1) the right to advance payment for the project; (2) Have the right to recover the project payment and overdue interest on schedule; (3) the right to claim compensation due to force majeure or unforeseen events; (4) The owner's right to stop performing the contract in case of breach of contract. While limiting the excessive demands of the owner, the contractor should strive for more rights according to the management measures and actual conditions stipulated by the state and local governments.

2. Overall management in the process of project construction is an important link to strengthen project cost management.

In the process of project construction, the contractor should "take the contract as the basis and the facts as the basis", give full play to the subjective initiative and do a good job in all-round cost management.

(1) Do a good job in engineering quantity statistics.

Engineering quantity statistics is the most basic work in cost management and plays an important role in cost management. Statisticians should be familiar with the situation of the construction site and the knowledge of estimation (budget), master some common sense of construction, do a good job of missing projects, work closely with budget personnel, be good at finding the factors that can claim compensation, and do a good job of statistical reporting truthfully.

(2) Do a good job of claim in project implementation.

Cost management personnel should be familiar with the terms of the contract, be good at seizing the opportunity of claim and safeguard their legitimate rights and interests. The most common claims are: delay, change, rush, force majeure and so on. The contractor may not expect every claim to be successful, but he should not give up any claim opportunity. At the same time, we should pay attention to the procedure of claim and the arrangement of relevant materials as the basis for future claim work.

(3) Establish a good cost management system.

The cost management department should be at the core of the contractor's internal cost management, and other departments should cooperate closely. Materials such as material purchase list and copy of invoice, engineering change, technical disclosure, construction scheme and production plan shall be submitted to the cost management department. Then, the budget staff of this department will analyze and compare on this basis and conduct regular accounting. When the actual consumption, such as budget consumption, is quite different, it should be analyzed whether it is the budget reason or the construction management reason, and remedial measures should be taken accordingly. In case of unforeseen special reasons in bidding, a claim scheme shall be put forward in time in combination with the relevant provisions of the contract.

3. The combination of technical scheme and economic management is an important work to strengthen project cost management.

Economics and technology are two different disciplines, but in engineering construction, the combination of them will directly affect economic and social benefits. The technical work of construction enterprises focuses on improving the quality of the project and ensuring the construction period, which is understandable, indicating the importance attached to social benefits. But at the same time, we should also pay attention to the economic benefits of enterprises. If an enterprise has no economic benefits, serious losses and is in danger of survival, then our technical work will be water without a source and a tree without a foundation.

The relationship between technology and economy, technology is the means, and economy is the purpose. Only through scientific and technological means can good economic benefits be achieved. The two complement each other, and ignoring either aspect will have adverse consequences. For example, when we make a construction organization design or construction scheme, we spend a lot of manpower and material resources to grab the construction period at any cost, which robbed the credibility, but caused losses; If the building standards are improved at all costs to ensure the quality, although the quality is guaranteed, the project cost exceeds the project contract cost. On the other hand, if we formulate the construction organization design or construction scheme, and consider strictly controlling the project contract cost, practicing economy and improving the economic benefits of the enterprise while ensuring the construction period and quality, then we will have sufficient funds to purchase advanced equipment and technology, so as to be more capable of reliably ensuring the construction period and quality of the project. Therefore, the combination of technical scheme and economic management will play an important role in strengthening project cost management and improving economic benefits of enterprises.

To sum up, in order to strengthen the project cost management and improve the economic benefits of construction enterprises, in the bidding stage, the project cost should be reasonably determined according to the relevant regulations; After winning the bid, a fair and reasonable contract shall be signed to determine the contract price of the project; In the project implementation stage, it is necessary to effectively control the project cost and implement the whole process and all-round management of the project cost. Let's devote ourselves to the management of project cost, so as to further improve the management level and economic benefits of enterprises.