Common Cost Control Problems on Construction Projects

Here is a list of common cost control problems found on construction projects:

  • Improper estimates, standards and budgeting techniques.
  • Unrealistic budgets.
  • Activities started or completed out of sequence.
  • Inadequate WBS (Work Breakdown Structure) or insufficient WBS detail.
  • Lack of management policy on control practices.
  • Poor corporate and project management governance structure and policies.
  • Reducing budgets or bids to be competitive.
  • Inadequate planning.  This is very common, particularly on privately funded projects.
  • Unnoticed and uncontrolled increases is scope.  The all too common “Scope Creep”.
  • Lack of comparison between “actual” and “planned” costs.
  • Unforeseen technical problems.  Inadequate contingencies and management reserves.
  • Project schedule delays and lack of systems to flag and deal with delays.
  • Additional overtime and acceleration costs.
  • Escalation of material costs.
  • Contractual discrepancies and inconsistencies.  These could result in gaps and ambiguities in contracts which often result in cost increases and erosion of bargaining strength.
  • Unrealistic appraisal of in-house resources.
  • Improper assessment of risks by the bidding team and by executive management.
  • Excessive pressure on the bid team to WIN the project.  “Must Win” projects are often destined for eventual failure.


This entry was posted in Bidding, Change Management, Construction Management, Contracts, Cost Control, Information Management, Materials, Program Management, Project Governance & Reporting, Project Management, Project Risk Management and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply