In the government world, profit is both good and necessary. Profit stimulates efficient contract performance, attracts the best capabilities of qualified business concerns to government contracts, and maintains a viable industrial base. The main factors that influence profit are 1 competition, 2 objectives of the business, 3 necessary investments, and 4 risks involved.
Costs Clients of the construction industry are becoming larger, more efficient and adopting more sophisticated techniques for forecasting and controlling costs. As a result, the Construction Industry requires professional advisors for building projects to demonstrate a high degree of efficiency and expertise in advising on costs.
The trend of modern designs, new construction techniques, new materials and new methods of construction give designers a wider choice of products. The result of this growing trend is a wider variety in construction products. We will write a custom essay sample on Cost Control and Procurement or any similar topic specifically for you Do Not Waste HIRE WRITER Efforts to produce balanced designs and achieve value-for-money using traditional methods of estimating have severe limitations, which demonstrate the need for effective ways of controlling costs.
Existing estimating methods have sometimes not been adequate in giving estimated costs. When this happens, the project involved may receive a lot of adverse publicity.
In a bid to win more t6enders, most contractors may reduce their profit margins. With reduced profit margins, there is now a greater cost-consciousness ton ensure that any possible losses are avoided through effective cost control.
The cost of capital for construction has become very high as a result of inflation and high interest rates. Coupled with a general shortage of investment capital for construction as a result of global economic trends and restrictions on the use of capital, these all make effective cost control very important.
The rising demand for integrated design that efficiently delivers both building and services elements in complex developments like hospitals, airports etc.
Helps during the design stage to achieve a balance in the expenditures for the various elements of the proposed building. Provides the client with value-for-money ensures resources are used to the best advantage - a building that is soundly constructed, which has satisfactory appearance and is well suited to perform the functions required as well as completed on time.
Instead, buildings were constructed by groups of tradesmen working for themselves. Measurers were employed to measure and value the cost of work both at the design stage and when they had been constructed.
The measurers argued on behalf of the tradesmen with the client and architect. In the 19th century, the main contractor system was introduced. This introduced price competition before construction.
This necessitated the need for skills in pre-construction measuring, taking-off quantities from drawings before construction was started. These quantities were assembled into the bill of Quantities which provided a rational basis for competition amongst contractors. This stage in the development of the quantity surveying profession meant that work was measured and priced after the design prior to execution.
In the next stage, approximate estimating techniques were introduced. These would help forecast a probable tender figure. Reasonably accurate probable costs can be determined early in the design process using cost planning techniques and cost analysis methods. With increasing complexity of building projects and the accompanying specialist skills required to design these presents a wide variety of alternative solutions.
The Quantity Surveyor, he says, must be fully informed of new methods of construction, new materials being introduced e. Planning for the building must go hand-in-hand with planning for costs.
This requires the Quantity surveyor to work hand-in-hand with the architect. Fulcher observers a trend of a shift in emphasis towards cost consultancy and suggests that quantity surveyors be fully conversant with all relevant cost factors in addition to the provision of traditional quantity surveying services.
It is essential that quantity surveyors be fully aware of the effect on costs of changes in any of these factors.
Fairfax County, Virginia - The Fairfax County Department of Procurement and Material Management provides the County Government with overall procurement and material management support. An organization that seeks to identify the most cost-effective product manufacturers across the globe. The international procurement organization will then convey this information to manufacturers looking to reduce production costs. The Public Procurement Regulatory Authority is an autonomous body endowed with the responsibility of prescribing regulations and procedures for public procurements by Federal Government owned public sector organizations with a view to improve governance, .
The unit commonly used in comparing the cost implications of alternative designs is the square metre of floor area measured between the main enclosing walls i.COST CONTROL SYSTEMS The cost control system used depends on a number of factors such as: 1. The size of the contract. 2. Complexity of the contract.
The attitudes of the management staff. 4. The level of sophistication of top management. Some of the cost control systems used are: 1. The overall profit or loss method.
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