Cost Reporting Examples

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En provenance du cours de Columbia University

Construction Cost Estimating and Cost Control

448 notes

Columbia University

Construction Cost Estimating and Cost Control

448 notes

Cours 3 sur 4 dans Specialization Construction Management

This course introduces the types of cost estimation from the conceptual design phase through the more detailed design phase of a construction project. In addition, the course highlights the importance of controlling costs and how to monitor project cash flow. Students will work on a break-even analysis of construction tasks in a project.

À partir de la leçon

Post Contract and Cost Estimation within a Project

James Sneath, Associate Director of Cost Management for Turner and Townsend Construction, discusses post contract and cost estimation with a construction project. Also covered in this module are cost reporting, change orders and communication and meetings.

Cost Reporting Overview13:52

Cost Reporting Examples13:12

Change Orders and Communication7:51

Rencontrer les enseignants

Ibrahim Odeh, Ph.D., MBA
Instructor, Department of Civil Engineering and Engineering Mechanics, Columbia University
Director of Research and Founder, Global Leaders in Construction Management

So as mentioned earlier,

then you summarize the project in this cost report here.

This is your financial summary, it's a bit of a commentary,

bit of an understanding for the user to read through, and

understand what everything means in the report.

So here we've got your budget commentary, your forecast commentary,

your change order, your anticipated change summary and your contingency position.

So there's a bit of commentary there,

it breeds well with the numbers, and you gotta make sure you update it every month.

So it tallies well with the numbers.

It's just continuing on from the report summary.

Goes into the project information and so

not just about cost in this cost report pointer.

We do go into the actual project itself, which kind of sometimes overlap with

project management reports, but just making sure that they all talk together.

This is a typical cost report terminology,

so this really wouldn't change too much each month.

This would probably be set up from the beginning and

it would just outline the terminology used in the report.

As I stressed earlier,

it's really key that whoever is the user of this report understands it and gets it.

If they don't, they can just look at these and find out a bit more information.

It's not trying to be difficult for the user.

It's got to be user friendly by all, not just someone in the profession.

As discussed earlier, so this is your cash flow, your idea,

you want it to be an S curve and it's just your actual budget you can see on the left

against your schedule on the bottom axis going along there.

So that basically outlines what do you believe the cash

flow will be each month, and it tracks it against actual.

So change control, this is really important,

that you have it in your cost report.

It looks every change of application.

It looks the quotation

that has been submitted by the contractor or the builder.

It tells you the value and it just tracks, and

then you've got a comment section there.

So this is your main register where that feeds into,

and it tells you whether there's been approved or rejected,

or possibly the actual value has been amended from further review.

It's really important that you keep track of your change control to

always be notified by the project manager and

the project team of every single change that comes through.

And you need to make sure, yourself, that it mirrors and

follows project management report and other documents from the project team and

that you are fully kept in the loop of all change.

And then the next part is quite useful to the client or

the owner of the actual project.

And this when we have an anticipated change register.

So here, this is where we predict there could be change coming up.

We know that in a month's time,

they need to redesign certain parts of the roof of this new building, and

so we know something's going to come up, and that's a change to the overall design,

change to the product, and change to the contract.

So here we're just being organized and we're reporting it here.

This figure will not draw down or

loop into any of the other figures earlier as we discussed.

It's really just showing a bit of organization and

management from a cost point of view.

Now things change, sometimes they don't filter through and they disappear,

or they get redesigned, or value engineered back to the original design,

for example, or sometimes they do transpire.

So eventually that could then come off of this list and

go to the change order register.

So contingency tracker, this is also very important.

Contingencies obviously are very big part of a project, it needs to be right.

In my experience,

a lot of clients don't always like there to be too much contingency because it can

be a large pot of money that they're having to put together.

And no one really knows fully what it's going to go towards.

But from your expert experience, you know that every project needs contingencies.

There's always unknowns that happen.

It could be to do with weather, it could be to do with market conditions,

it could to do with a complete disastrous contractor on site.

So you have to have contingency, so

this is a really good tool to have a tracker within your cost report.

And so what this page basically

outlines is your contingencies from the contract valley or your original budget.

It then splits up into the different areas where contingency has been applied to so

you have some to your professional fees, some to your main construction,

and the fit out component, all different parts for construction.

It's always put it specific and you allocate the contingency to these areas.

So this tracks how much has been used of that,

maybe nothing has been used and it gives the client, or owner, or

user an understanding of really how we're tracking with contingency,

how much you have left, how much you've had to use of it.

We try and make this as colorful as possible and

use as many charts and easy-to-understand tools so

you can see we've got this very large pie chart here, and now this actually ties in

you can see to the left as well with contingency with your risk.

You anticipated change as well, and the actual main budget.

And it's just a good way of showing it in easy terms without having to read

the numbers.

Okay, we're now going into the full detail of the cost report here.

And we're actually outlining everything involved within the actual project

into a bit more detail.

That's the summary page, you can see here we've got professional fees first for

this particular project.

We've got enabling works which are construction works required to

make the main works of the project, to allow that to even start.

So these are called enabling works or early works, and sometimes that can be on

a site, a lot of site works such as storm

water or ground works that get the overall site ready for the main construction.

We then got the main construction works.

We then split out on this particular example fit out works

just to make it clearer.

So within that constructions work will be your core shell works, and

then we've got interiors separate.

And then further to the fit out works, we've got furniture and fixtures.

We've got owner direct expenses, technology, etc.

So this is just an example.

It can be designed to any way you like really.

It might be designed to what the client wants.

Sometimes they'll have internal reporting methods and

it has to fit into their internal reporting method, and this particular

example is from a previous project to fit in with their financial reporting.

You can see we're also coming away now from the estimating formats that we

discussed previously such as master format and uniformat.

So they're really ideal when your cost planning and reporting budgets

as per the design, but when you get into actual construction, it changes very much.

And you really want to set up your cost support firstly

against the contract value and the breakdown.

The way the contractor is going to be submitting their monthly claims.

And then throw in another mix of the client requirements, so

they'll have internal reporting processes.

So it changes slightly by the time we get to this stage.

Having said that, you can set up a cost report in a master format style,

there's no stopping you.

Just from my experience, it changes again by

the time you get to this construction stage.

So here what you can see, we have our professional fees that's going down to

the detail, it's going down to the original budget,

and then again all is placed, as you can see to the far right.

And we've got it split here between budget and four cost.

So budget is the, before we've even started and

the contracts have been signed.

And then forecast, so

then the only difference here is forecast includes what we now know,

includes change orders, includes changes to funding, things like that.

So it's really tracking budget and forecast, and it's the same throughout,

just picking on it here and professional fees.

So we discussed earlier, you've got your enabling works, so

you're going down into the data there of cost against each line item.

Just delving into it a little bit further.

You've got general requirements, existing conditions, concrete masonry, metals.

So this particular area of enabling works, and you'll see in the next part,

the construction and fitter, it does follow the master format.

But what I was saying earlier is the overall summarized

parts do not necessarily follow master format.

Fit out works, your FFNE owner direct

expenses again, this is just an example.

It's quite normal to have owner direct expenses.

They will normally nominate what they would be.

So for this particular example we've got future signage, security, IT and AV.

You would see that in normal domain construction part as well, but for

some clients, security, IT and AV is highly sensitive and

they like to have it as part of their actual direct costs.

You get that a lot in the financial institutions

when they're doing projects for their portfolio of properties.

Here we also have moving costs and direct material procurement costs.

Okay, so these gives another snapshot of your funding tracker.

This is your original budget, and then you've got additional funding, and

then you've got any budget transfers.

It's just a simple chart in the top right of

showing original budget against additional funding.

The provisional sums listed out there,

you've got the provisional sum value, the final agreed costs.

So normally, that'll be around the value that

you've ported in your provisional sum in the contract value.

And here we're showing that the final one is 450, so

there's a saving of $50,000 there.

And this is why it's important to track things like this in this

report because the contractor is not due that $50,000,

they have to now hand that back to the project.

So these are the risks and opportunities register.

The typical way to report and manage risk is to follow the traffic light colors.

So see green is low risk, amber is medium risk, and red is high risk.

So this is understood by most people in project team, and

it's an easy way of just scoring the risks here.

Procurement schedule, so these follows procurement.

Discussed this earlier, and

it just gives a bit of organization to what's been procured to date.

Particularly lead times and effect schedule as well, so

it gives an idea of what's been ordered,

maybe when you need to order something and the status of it as well.

So looking at this one here, it gives you an idea that the project has possibly just

started and there's not many things on it.

And as a project goes on, your procurement schedule can go for pages and pages,

depending on the size of the project.

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