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Cost Control

One of the most difficult elements to control is the project budget. Even with careful planning and
estimating, hidden construction issues or mistakes can add unexpected costs to the job. To keep
costs under control, it's important to find a tracking system that works for both the project manager
and the contractor's accounting office. Project management software like Timberline or Prolog is
one popular way to control the budget, as are simple spreadsheets. Take the time to set up the
budget in one of these systems well before the first invoice is received. Work with accounting to
develop cost codes for each category on the job. This helps to ensure that the project is on budget,
and also indicates areas that may go off-track. For example, tools and safety equipment may be
placed under cost code 10-150. All receipts and invoices in this category should be marked with this
cost code so that expenses can easily be tracked. Many contractors rely on the MasterFormat codes,
which were developed by the Construction Specifications Institute. To control costs associated with
change orders, ask subcontractors to submit a thorough breakdown of their price. This includes
hourly labor rates, material prices, tools, equipment, taxes, overhead, and profit. Having the price
broken down in this way will allow the project manager to review the cost more easily. This keeps
subcontractors from inflating their prices, and may also help the project manager evaluate
alternative options.


The various elements of a construction project are interdependent on one another. This means that
a simple delay by one trade can cause the entire project schedule to unravel. This can lead to major
cost impacts, as well as lawsuits or unhappy clients. To improve the odds that the project will be
completed on time, it's important to take the time to develop a schedule before contracts are
awarded to subcontractors. Schedules should be completed using scheduling software, such as
Suretrak or Project, which display the impact various activities have on one another. This schedule
should be issued as part of the bidding process, and again as part of the scope review meetings after
bids are received. Each major subcontractor should be asked about his or her ability to meet the
schedule, and the schedule should then become a part of the contract. It is often worth paying a bit
extra to hire a contractor who has the manpower and resources to complete the project on time,
rather than simply hiring the lowest bidder and hoping for the best. Once the schedule is made part
of the contract, all parties on the job are bound to the dates provided. This makes it easier for the
project manager to require overtime, expedited shipping, or additional manpower at the expense of
the subcontractor. During construction, the project manager should stay abreast of progress, and
provide written notice of changes or additions to the time line. Another useful technique used to
maintain the schedule involves looking ahead to the next two weeks of the project, then providing
reminder notices to any trades who will be needed on site during that time.

Communication and Contracts

One major cause of headaches on the job site is poor communication between trades. This is often
caused by poorly defined scopes of work, which leads to confusion over who is responsible for
certain tasks. For example, a door contractor may supply doors, or may supply and install them. This
contractor may also install aluminum storefronts, windows, cabinet hardware, rolling doors, or
electronic locks. These various tasks are known as scope items. To minimize confusion, the project
manager should take the time to carefully review the building plans during bidding, and use this
information to create scopes of work. The scopes should be reviewed by applicable trades, then
inserted into the contract. It is often tempting for the busy project manager to skip this step, and
instead specify that work should be completed according to "plans and specs" or "project
documents." This is a sure cause of confusion and miscommunication, and can leave the project
manager with gaps in the scope, or with subcontractors arguing over who is responsible for specific
tasks. By taking the time to write thorough scopes before the project starts, you improve your
chances of having the job run smoothly. When disagreements arise, you'll be able to easily resolve
them by referring to each party's contract. This will also prevent last minute disasters where you
learn that no one is contracted to provide specific scope items, leaving you scrambling to find both
contractors and available funds to cover this work.

Read more: Project Management Techniques in Planning & Controlling Construction Projects |

Labour subcontracting is an important labour-use strategy in the construction industry. In their

search for labour-market flexibility, employers in the construction industry in Singapore rely
extensively on the Kepala (labour subcontracting) system. The Kepala system offers a 'convenient'
way of managing operative (skilled, semi-skilled and unskilled) construction workers. Essentially, this
paper discusses the merits and demerits of the Kepala system. It is argued that, although employers
in the construction industry derive some strategic benefits from the use of labour subcontracting, on
the whole, the system has some adverse consequences for workers, companies, the industry and
HRM functions. But, in the absence of any better system that the employers can turn to, it is
necessary for the Kepala system to be refined. Thus, it is suggested that the Japanese model of
labour subcontracting offers lessons, but will require modifications and adaptations before being
applied in Singapore.


You can hire a contractor/ subcontractor

when you need more flexibility
You can use a contractor/ subcontractor
for one-off jobs and jobs requiring
specialist expertise or fast turnaround

Your permanent staff can concentrate on

the core business

Some contractors/ subcontractors can

start the work or project at short notice,
even when large numbers of workers are

You can often specify the type and

duration of contract you need for the job

You have no PAYE or National Insurance

contributions administration for

You can obtain temporary cover for a

permanent staff job or work that needs

Health and Safety Policy Statement (signed & dated) & Organisational Chart.
Professional qualifications for key safety personnel e.g. Managing Director = MCIOB,
Safety Manager = NEBOSH Cert / CMIOSH.
Drug & Alcohol Policy.
Copies of enforcement notices issued by HSE or local authorities in last 3 yrs and
of rectifying actions taken by your company.
Sample safety training certificates or records for operatives and managers e.g.
PASMA, Plant operators, SMSTS, IOSH qualifications.
Recent method statement & risk assessments specific to typical work undertaken.
Proof of in-house training eg. company induction, toolbox talks, method statement
Inspections, audits, meeting minutes to show monitoring staff safety performance.
Measures in place for controlling & monitoring your sub-contractors.
Certificates / awards from relevant trade or safety organisations e.g. CITB, RoSPA,
BS EN Certificates for ISO 14001,18001 & Chain of Custody Certification.
Environmental Policy and evidence of environmental training e.g. certificates, toolbox