How to control investment

[Abstract] through all stages of project construction to control the reasonable control of the project cost.

[Keywords:] Project Cost Control

I. Overview
In recent years, with the oil in the fast-growing economy is becoming increasingly important share of the oil project has also increased investment in the project construction process, how to control the investment, to achieve the total investment does not exceed budget investment objectives, become very important. all the weeks, the construction of any project are inseparable from the quality, progress, investment in these three control points, how to ensure the quality and duration control the investment under the premise of progress has become an important subject. For a long time, for the project cost control, it is generally believed to be primarily in the construction phase of project implementation, ignoring all aspects of the process of building Cost Management, construction phase error that requires a lot of manpower, material and financial inputs, expenditure control will control the construction of the project cost. In fact, the construction cost of the various factors controlling the composition of the control of investment by the investment decision phase to the project implementation stage, the project settlement stage, multi-node control in order to achieve the objectives set .

Second, the early stage of the project
Reasonable control in the early stages of the project construction cost, estimated to be from the control of bulk materials, procurement management, and so determined to start construction units.

(1) control budget, the first in-depth on-site to collect information on the project, the project analysis and comparison of multiple programs, and recommend the best solution. The best solution to not only technically advanced, feasible and Economically be reasonable. In general, the early stage of project to be detailed on the site reconnaissance, not only have technical staff to participate, but also the accompanying financial officer, from land acquisition compensation, equipment selection, the evaluation, project construction, hydraulic protection, in detail Total Liezi items, so that estimates are not omissions.

(2) Strictly manage the procurement of bulk materials. For bulk materials, procurement of key equipment by the owners themselves in order to reduce the purchase price, and help ensure quality delivery. Meanwhile, in order to strictly regulate the procurement tender for the main form of material acquisition, commission a professional organization special goods and materials procurement and supply management, material procurement and allocation of carefully designed programs to improve the material transfer efficiency and reduce material storage management costs.

(3) The construction unit OK. To meet the large construction project management, scientific and rational and effective control of project investment, should be used with the international practice of Quantities bidding model, strict implementation of national <<Construction Project Bill of Quantities Specification> > requirements to better meet the tight schedule, the construction of large projects demand. In recent years, with the bidding of quantities in the continuous application of petroleum Engineering, in accordance with FIDIC contract terms, the actual situation for the tender, the tender documents continue to modify, improve, make more standard bidding documents science, so that the Bill of Quantities of the project is relatively accurate, more operational, while increasing the total risk of the owner and contractor efforts.

Crude oil reserve depot project tender BOQ used in the tender offer by the matrix, respectively, the construction of quantities for individual quote form, other costs quoted statement, the consolidated unit of tables, list of other charges quoted composition, and reported on each table requirements were strict rules and detailed instructions. The tender documents, tender drawings based on the amount of valuation in accordance with Engineering features to provide a unified quantity, this list throughout the entire process of bidding and construction of Engineering the whole process, and as estimated base price, the tender offer , claims and counter claims, progress payment based on the unity of payments.

In order to prevent unbalanced bid and malignant offer, the project department in the bidding process was introduced in line with the provisions of the bid: composite base = base price �� 50% + owners of units with an average of prices bid �� 50%; composite price = base price for individual owners to offer �� 50% + effective average of prices for individual bidders �� 50%; if the bid price above or below the average of prices of the bidders tender offer of 50% is not the basis for the calculation of composite base. This unit bid price bid will be carefully considered when , and truly offer.

To reflect the open, just and equitable principles of evaluation, before the opening of the evaluation need to develop detailed procedures and documentation, evaluation discipline and confidentiality provisions of the Code, detailed score methods and standards. Usually "comprehensive evaluation" for evaluation that the Business Standard scores accounted for 60% of the total score evaluation, technology evaluation scale scores accounted for 40% of the total score. Through the construction design of bidders, the owners concerns the proposal, the bidder's construction workers can not be replaced , equipment and experience in similar projects, business offer is reasonable and comprehensive evaluation of the integrity of other aspects.

Tender requirements and evaluation in accordance with the rules of the successful candidates for the Top, not only feasible in the construction technology, equipment, excellent equipment, construction, outstanding performance, and offer low level in the middle, reflecting the international practice of "Reasonable Low Price "principle.

Quantities through the promotion of the tender, which can effectively reduce and control the project investment, improve the level of project Cost Management, effective implementation of "fair competition, reasonable risk-sharing, investment in reasonable control, improve efficiency technology and management of construction enterprises level of project management objectives.

Links to Research Papers Download http://www.hi138.com three stages of project implementation
First, the strict contract management, to ensure the effective control of project investment.

1) All contracts must be approved through the transfer of contract management system, strict sign the contract system, extensively solicit opinions, to avoid vulnerability to the terms of the contract cost control risk.

2) The contract should be someone responsible for the custody, the person responsible for all project contracts the audit, storage, archiving.

3) construction, supervision, design, contracts, joint hearing by the cost of departments responsible for organizing, negotiating and signing; such as land acquisition contracts and other contracts, by the competent authorities responsible for organizing the necessary cost of departments should be involved in the process of contract negotiations.

4) sign the record contract, contract modification, contract price formation based on such original records to be kept together with the contract, so that the traceability of contractual liability. For contract negotiations, contracts, written record of the negotiation process should be based on the contract with the contract Save. the negotiation process works in the Offer Document should be signed and sealed by the Economic professionals, as part of the contract save.

Second, control design changes in construction drawing stage to reduce the changes to the project cost due to claims brought by the uncertainty of process control. Formulate strict change management process the visa, the visa a clear responsibility to avoid contractor claims and false claims of unreasonable . on the project site is large quantities of claims visa changes should be recognized Engineering professionals in the field. on the timeliness of the visa claim, clearly stipulated in the contract, especially after the hidden works and civil works can not be accurately measurement of the project, the visa officer to pre-construction and construction-site verification during the measurements, after completion of the project in time to change the visa confirmation.

Again, due to large projects in general are multi-year project, so be careful preparation of annual investment plans to develop a scientific and rational use of funds requirements planning, careful preparation of quarterly investment plan. According to the progress of the project preparation and reporting of monthly financial plan, so that both ensure the timely delivery of funds and liquidity to minimize the occupation.

Finally, the strict implementation of the target cost responsibility system, under the total project cost, index decomposition approach to the project cost estimates and the indicator of the control, and target cost control responsibilities to the departments, to post, the individual level, so that the project achieve full cost control management, process control, to ensure completion of project budget.

Fourth, the project settlement stage
Project accounts audit is a very important job, it is directly related to the Economic interests of both parties. The construction units, to plan carefully, to minimize the project cost; the construction unit, in pursuit of Economic efficiency, more often reported settlement to increase the project cost. Therefore, in some sense, Engineering is actually audit the accounts of both technical capacity of the contest. the construction unit's budget officer, not only to master the rules of engineering calculation, a fixed sub-purpose content and apply the provisions of the composition project cost of the computer program, but also master the preparation of the three principles of internal relations, the most important matter in the application to digest, easier. In addition, the cost of staff should have some engineering knowledge, both the rationalization of the construction site suggested that the visa can be questioned in the irrational factors. In addition, cost personnel also need patience and meticulous work style, often under the site to understand the scene, to project dynamic.

V. CONCLUSIONS
Based on the above analysis we can see that all aspects of cost control are the formation of the project cost will impact only in the various stages of construction, the use of scientific methods and practical valuation valuation basis, refine the preliminary design estimates, the use of List Price for bidding, strict management and materials management aspects of the contract, and truly change the visa control and reasonable settlement of accounts, the project cost can be a decisive role in the formation, control of these areas can effectively control costs.


References:
[1] Zhang Lingyun <<Project Cost Management "> Donghua University Press, 2008.

[2] Liu Yisheng <<basic theory of Cost Management and regulations in>> China Planning Press, 2003.

[3] Wang Li <<Comparison of domestic and international project valuation models Research "> Construction Economics, 2004.

[4] <"Oil construction and installation project budget fixed>> Petroleum Engineering Cost Management Center, 2000.

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