The minimum requirements for control of costs once projects are underway are that expenditure and forecast cash flow match available funding. There must be a systematic and rigorous process for agreeing and approving changes to the scope of the project.
This process must ensure that changes are identified sufficiently early, so that clients can understand the impact of change before they commit to it. Necessary direction can then be given to avoid delays to the project.
Cost control typically takes place during the latter construction stages of a project, when a client is committed to substantial expenditure through a building contract. But it is equally important during the detailed design stages, to ensure no surprises at the tender stage.
During construction, requirements for change can arise for a wide variety of reasons. The role of cost control is to monitor the impact of changes, enabling corrective action to be implemented if there is any risk of the client’s requirements not being met.
This includes management of the commercial relationship with the contractor, measurement of work, approval of payments and negotiation of changes.