Problems in cost control under construction engineering management
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Material costs include expenses related to raw materials, temporary materials, and auxiliary materials used during construction, such as material purchases and rental fees. These costs make up a significant portion of the total construction expenditure and play a crucial role in project success. A well-established material cost management system is essential for effective cost control. However, there is currently no clear system in place that defines roles, responsibilities, and incentives or penalties for performance. As a result, cost management in construction projects remains fragmented and inefficient.
2. There is insufficient attention given to time-based cost control and quality-related cost management.
Duration cost refers to the expenses incurred to complete a project within a specific timeframe, while quality cost involves the investment required to ensure the project meets all necessary standards. Both are unavoidable costs in any construction project. While improving quality often requires accelerating the schedule, this can lead to higher expenses. Ignoring these aspects can result in poor-quality work, leading to additional rework costs and potential damage to the company's reputation. Delays or quality issues may also increase administrative and operational costs over time.
3. Contract management is often disorganized and lacks clarity.
Effective contract management is a critical component of construction project management and plays a key role in cost reduction. However, many project teams have a weak understanding of contract terms, obligations, and breach consequences. This leads to confusion in managing contracts, resulting in unnecessary expenses and legal complications. Proper contract management should be integrated into every stage of the project to ensure transparency and accountability.
4. There is a lack of awareness among staff regarding cost management, low equipment utilization, and high operating costs.
In some projects, different departments operate independently without coordination, leading to inefficiencies. Engineers focus solely on quality, while procurement teams handle materials, but this siloed approach increases waste in resources, labor, and time. Equipment management is also inadequate, with operators lacking proper training, leading to improper use and maintenance. Additionally, investments in machinery are often made without considering market demand or project needs, resulting in underutilized assets and unrecouped costs. After project completion, these machines may become obsolete or unusable, further contributing to financial loss.