Study on the cost management of construction project during Essay

Study on the cost management of construction project during construction phrase - Essay Example ty of managing costs in construction projects is undeniable since all projects are limited by resources which includes the money to be spent for the project. As such, construction cost management is very significant in the construction industry. In this regard, construction costs is understood as the expense incurred by a contractor for labor, material, equipment, financing, inflation, contingency, plus overheads and contractors profit. Being such, the role of construction costs in the project in particular and in the construction industry in general is of primary significance. Thus, studies and development of theories that will enable the contractors, experts and scholars further understand the concept are continuously undertaken. In this regard, they have come up with the different types of costs namely, earned value cost, actual cost and cost budget all of which intends to guide the user as to what is the standing of the costs of the project from the beginning until the end. These different types of costs involve the following elements: labour, material, equipments, financing, contingency, overheads and others like VAT. Moreover, cost is affected by the following: project duration, project schedule change, resources consumption, price fluctuation, project quality, inflation, project scope, rework, worker injuries, delivery approach, and management practise. The numerous factors that affect construction costs make the nature of construction costs unique, dynamic and undeniably complex. As such, several theories are proffered in order to elucidate and direct the management regarding the control of costs. These are: earned value analysis, life cycle costing analysis, and value engineering. However, it should b e noted that as the concern regarding costs pervades the entire project, there is a necessity to focus only on certain aspects of costs in the project so as not to conflate the discussion. And as mentioned , the entire project zeroes in on construction