Cost Controls and Budget Management

Cost Controls

We recognize that tight cost control is a critical component of the successful completion of any construction project.

Our estimator and project manager establish estimated costs for:

• Each and every element of labor based on specification divisions.
• Each element of material based upon specification divisions.
• Each subcontract based upon specification division.
• Equipment based upon specification divisions.

Every purchase order and subcontract agreement is tied to a cost code in our job costing system.  Each invoice received from a material supplier or a subcontractor is reviewed by the project manager and/or the superintendent for verification that materials have been delivered to the site in good condition, subcontractor’s work has been properly performed, etc.

Our accounting software flags invoices that are over the purchase order and subcontract amount.  These procedures, along with the project manager’s review of invoices prior to payment, serves as a check and balance that material suppliers and subcontractors are not overpaid.

Our accounting software also flags any invoices for which we do not have a current insurance certificate from the subcontractor.

Budget Management

On a weekly basis, the project manager and superintendent review a report of man‑hours for the project broken down by each phase of work.  This is further broken down by subcategories within each phase.

On a monthly basis, the project manager and the principal-in-charge review a complete job cost report.  This report lists the estimated cost, the total cost committed for the project, cost spent to date, and the projected cost at completion for each labor, material, equipment, and subcontract code.

The budget is updated monthly to show projected cost at completion.