Procedure Cost Control

Procedure for Cost Control | | | Table of Contents 1. Purpose 2. General 3. Responsibilities 4. Procedure 5. Flowchart 6. References 7. Attachments 1. PurposeTo establish a system whereby developments which affect the costs of the project are timely reported, thereby allowing for corrective action when adverse trends are detected, and to inform about funding requirements for the execution of the project.To establish a procedure to control flow of information which affects anticipated final project cost.This procedure shall be used in combination with the "Procedure for Project Variations" [1], the "Planning Procedure" [2] and the "Procedure for the Project execution Control system" [3].2. GeneralAt project start, generally a high level budget is available and in many cases underlaying details about estimated costs are also available. These documents, however, are in most cases not adequate for effective cost control. Therefore, this procedure requires that in an early stage of the project a control budget is prepared, based on the available information and within the boundaries of the high level (AS SOLD) budget.Cost control within Company generally consists of the following categories:- Company Services (reimbursable Engineering, Procurement , Construction Management and outside services) also client cost reporting.- The investment cost reporting which includes all costs within the scope of the project (e.g. direct supplied materials, subcontracts, services including Company's services etc.).- Company internal cost report which is limited to Company's services, including non reimbursable costs.The requirement for the first two categories largely depends on the scope of work for the project and the contract type. Regardless of the scope of work and the contract type, internal cost reporting will always be required.The cost reports shall as a minimum contain the following information:- Original budget.- Current budget, being the sum of the