The Cost Of The Project General Contracting Company Control Analysis

The project cost management of china has gone through two stages in its history of development basically:the first phase is the traditional project cost management system based on planned economy theory and method; the second phase is the modern project cost management, which covers all process of project and separates the quantity and the unit price under the conditions that the price is decided by the market while the departments of the government only coordinate and/or supervise the fluctuating and changing of the market.The original project cost calculation pattern has been changed by the cost management of the second phase. The direction of project cost management theory of china is pointed out in the second phase. New project cost management method, which matchs China’s actual condition, needs to be found out from actual cost control of EPC project in china.With the opening policy and rapid development of economy in China, a lot of design institutes developed into Engineering Corporation, business scope changed from design to EPC process of project management. Market covers both China and overseas.For international Engineering Corporation, the main profit comes from EPC contract, while the ability of comprehensive management of the EPC project is the base of income, the purpose of management is the increasing efficiency and the benefit from management and the core ability of comprehensive management is quality control, schedule control and cost control. The income, profit and competition ability of Engineering Corporation mainly depends on the project cost control. In addition, the risks of EPC contract of Engineering Corporation increases day by day due to the global financial crisis and more and more EPC contracts operation at the same time.The biggest investment and project in the world is China in recent years. And the EPC contract model is also accepted by Chinese investors gradually in recent years. However the project management of China Engineering Corporation, especially the cost control of EPC contract is still behind the international project management and the system and standard management is still immature. Therefore China Engineering Corporation should learn, digest, absorb, and improve western EPC project management method and finally innovate and find the best EPC project management including cost control ways in China, which match Chinese condition, increase the competition ability and continuously gets EPC project and fast development.The background of this treatise is the cost control management of CHENGDA Engineering Corporation of China. The characteristic, actual condition and competition environment of both china and oversea about Chinese engineering corporation is analyzed in this article and the project management knowledge is used to set up the new cost control management system, which is appropriate for Chinese enterprises. Budget and cost control, earned value theory, progress and cost combined control are discussed in the new cost control management system. And the project target can be achieved, risks and cost can be reduced, and maximum profit can be increased by the use of this new cost control management system. This treatise can be used as a reference for China engineering corporation and personnel whose work is cost control.There are four parts as follow in this treatise.Part one, the status in quo of the mode in project cost management.Part two, general situation and cost control management of CHENGDA Engineering Corporation of China.Part three, establishing cost control system of Engineering Corporation EPC Project. Part four, the procedure and execution of cost controlAs the EPC project management is developed from Europe and America after the China’s opening up policy, the theory study and method still have much faultiness, the cost control theory and method are still under study and there are a lot of differences between the market economy of china and overseas. The theory and method in this treatise need testing and improving in actual EPC project management. It is expected that the best cost control theory and method which meet the requirement of Chinese enterprises will be found after a lot of EPC project managements.