Project Delivery | Scheduling | Cost Controls | Disputes & Claims | Risk Management

Here are two very important questions you must ask when beginning any large project:

• Does the project have an adequate budget?
• Will the project come in on time and on budget?
• If not, who is going to pay for the extra costs that are incurred?

Estimates are often prepared in different formats. pmsi encourages utilization of a cost structure, e.g., CSI master format. This facilitates cost comparison - bench marking and effective cost management. We prepare stochastic “quantitative risk analysis” using Monte Carlo simulation on cost estimates and advice on potential threats and recommended contingencies for the project.

Design-to-Cost (DTC) - Cost Evaluation and Estimate of Probable Cost
As the design documents achieve major milestones we evaluate variances to previous estimates and prepare reasoning for the cost variances and possible path forward to mitigate cost risk for the project. We prepare Estimates of Probable Costs with the applicable markups on the estimate such as soft costs; contingencies and price escalation.

The Project Budget is derived and collapsed with cost codes from the estimate and as such is the baseline for tracking cost deviations and variances.

Cost Controls is essential in delivering a project in a cost-efficient manner and being able to forecast projected cost at project completion. Typically with the project controls we use, we take the budget and break it down into more details and assign who is responsible for each sub-budget. So, when that is all said and done — we want everyone who is involved in management of the project to be aware of the budgeted costs and how the estimates/budgets were determined. It is very helpful if everyone on the management team is on the same page at the beginning of the project.

Once the budget has been established, then it can be tracked in detail as the project progresses.

Using what is sometimes referred to as “best practice” procedures, pmsi tracks such things as earned value to see if the project is staying true to the budget and planned burn rate.

Project controls become more and more important when changes occur and as a result of unforeseen conditions. Any time there are additional and/or unforeseen expenditures, pmsi will document the reasons for the changes and who is responsible for any extra costs.

With this on-going measurement of the cost and completion schedule, pmsi can advise the management team of any potential problems in completing the project on time.

pmsi will also become involved in contract or dispute negotiations needed to resolve the discrepancies.

Trending and Variances are important
With pmsi involved in the monitoring of expenditures against the budget elements, we not only monitor actual cost used to date, but build a comprehensive Trending system that identifies and tracks all current and potential issues that can impact cost and/or schedule.

Then, in combination with the trending system — pmsi is able to manage changes and forecast cost variances.