Research On Cost Control Of Construction Engineering

The construction industry which together with the iron industry and the auto industry is listed as the three pillars of national economy, is the important substances sectors of the national economy and has a close relationship with the development of whole national economy and the improvement of people’s living. China is currently in transitional phase that developed from low-income country to middle-income countries. The construction industry is growing fast and also has a great contribution to the growth of the national economy.Currently, China’s construction market is becoming saturated and profit ratio of production don’t enhance with the increasing of the total profit and the yield. Especially after joining the World Trade Organization (WTO), construction enterprises are facing the grim situation that market competition is increasingly fierce. The competition is not only includes domestic market but mainly international market. If construction enterprises want to stand in an invincible position in the new round of fierce competition, they must adapt to changes in the market and cultivate their own core competitiveness whose core is a low-cost strategy. Cost management and control is an essential work in the management of all types of enterprises. Through the analysis of the cost management of construction projects in China, we found that the current cost control has many problems. They are mainly that cost control methods are relatively backward and rough, empirical cost has too much and credible evidences are lack. If the cost is not able to control effectively, the prospects of the construction industry can be imaged.The cost control of construction projects refers to that in the process of the formation of the project cost, human resources, material resources and expenses consumed in the construction projects are be guided, supervised, regulated and admitted, timely corrective the deviation that is going to happen or has occurred and control various production costs within the scope of scheme cost to ensure the realization of cost targets. The purpose to construct the project cost control is to reduce project cost and improve economic efficiency. The significance of the construction project cost management is great and cost management is the core content of construction project management. That the work of construction project cost control is good or bad, directly determine the level of profitability of the project.This paper is begin with the status quo of Chinese construction field, summarizes the theory of cost control at home and abroad and proposes subsequently research contents, research methods and research ideas, then puts forward the theory of project cost and project cost control as the theoretical basis of the article. The theory of project cost includes its concept, composition and classification; the theory of project cost control discusses its concept and basis, principle, tools and methods, classification, etc. The tools and methods of project cost control include the project cost analysis table, method of cost cumulative curve and analysis method of earned value which principle and calculation are easy to be understood and grasped. The classification of project cost control which integrates the two ways of classification:one is according to the things in the development process and another is according to corrective measures or the source of information control divides into active control and passive control.Secondly, this paper analyzes the status of the construction project cost control, including:the weak awareness, lacking of practice and strategy, lacking of scientific method and a comprehensive system of project cost control. Then, for the above problems, the paper proposes countermeasures of construction project cost control, including that:establishment and improvement of organizational structure of cost control; whole process of cost control; overall cost control. Therefore, not only the study of the article strives for providing effective theory and practical reference for construction enterprises’ project cost, but reach the purpose of improving enterprises’ industry competiveness through controlling project cost.Finally, this paper as Hubei Albert Infrastructure Projects Co. Ltd the main study object analyze the construction cost control in the company by using the earned value method of project cost control methods and further verify the validity of earned value method in construction projects and strive to provide a theoretical basis and specific implementation methods for construction companies to gain advantages in the market competition.Cost control of construction projects is a dynamic and complex process, but also a very challenging work. The purpose of cost control is on the basis of quality protection to reduce and eliminate waste in the enterprise, thereby saving economic and social resources. To solve fundamentally the problem of cost control, the first is to let the idea of cost control depth every employee, the second is to organize a stable cost control organization, and the last is to drive everyone involved in every link of construction project cost control work, find problems, analyze the causes and propose the solution.