Cost engineering is the application of engineering principles to the management of costs related to development of a project. The overall planning, co-ordination and control of a project from its inception to required timely completion, and meeting the quality standards within estimated costs, is the primary interest of the owner.This, in essence, is Professional Cost Management (PCM) on behalf of the owner, and not merely Management of the individual Construction costing.The aim of PCM is to produce a completed project, which complies with the owner's requirements and objectives, is completed within acceptable variations in contract and has minimum deviation from the original budget. Good PCM ensures widespread agreement on the owner's objective, and this must be maintained throughout the phases of Design, Construction and finally, Commissioning of the project.
Cost has always been a constant source of concern when considering different technical options, like
An assessment of the likely cost and risk is made taking in account of past experience with similar activities and the assessment of trends, and of any changes in working practices.One of the important objects of the PCM is to see that the skills of the cost managers are able to optimize the design, planning and control with available resources while coping with challenging realities imposed by various constraints. The owner, at the same time, is kept informed of all the development in schedules and emerging costs at all stages of design and construction phases.
Nevertheless, economic difficulties, incomplete design information, frequent revisions, shortage of materials and delays in supplies are the constraints usually faced by projects. In this situation, unless the project budget is properly handled or managed by skilled cost managers, the projects are often found abandoned, and if not, they become uneconomical to continue.
Cost consultants are involved with all financial aspects of construction work and increasingly being used in the role of commercial, legal and contractual specialists. In addition to the prime quantity survey functions, many have expertise in research, preparation, submission and negotiation of contractual claims as a part of the general responsibility for financial control and economic well-being of contracts.