Controlling Construction Costs
Bid document format and language to enhance cost control
- Contract language/provisions to enhance cost control
- Definitions and administration
- Clarify reimbursable costs
Cost control objectives
- Project planning phase
- Contract document development phase
- Bid/contract award phase
- Construction phase
- Contract close-out phase
Detecting and preventing typical overcharges on lump-sum charges
- Specified construction materials or products not installed
- Specified services not provided
- Overstatement of change order proposals
- Overstatement of contactor claims
Detecting and preventing typical overcharges on cost-plus contracts
- Payroll burden overcharges
- Labor hours and/or wage rates overstated
- Material overcharges
- Back charges not properly handled
- Equipment rental overcharges
- Insurance overcharges by subcontractors
- Accounting errors, duplicate charges, etc.
Special cost control considerations with “change orders”
- Lump-sum or guaranteed-maximum contracts
- Field administration of changes
- Obtaining proper documentation
- Special contract provisions
- Monitoring change order work
- Analyzing/auditing change orders
The owner’s team—cost control roles and responsibilities
- Project manager/purchasing authority
- Field engineer(s)
- Cost analyst/construction accountant
- Contract administrator
- Outside architect/engineer
- Construction auditor
Special considerations for time-and-material contracts
- Establishing the proper rates for labor, equipment, etc.
- Obtaining adequate documentation on a timely basis
Special considerations for unit-price contracts
- Adequate definition of how units will be measured
- Monitoring work-in-progress/work-in-place
Special cost control considerations with contractor “claims”
Using computer database applications
Schedule
Evening before course — 5:30 – 7:30 p.m. Optional dinner for those arriving early
Days 1 and 2 — 8:30 a.m. – 4:30 p.m. Session
Day 3 — 8:30 a.m. – 12:30 p.m. Session
The University of Wisconsin–Madison, as a member of the University Continuing Education Association (UCEA), authorizes this course for 1.8 Continuing Education Units (CEUs) or 18 hours.
gsrenaski@exed.wisc.edu