How can cost consulting companies help owners control investment?

Zhong Yongning (Shenzhen Jingzhen Cost Consulting Co., Ltd., Shenzhen, Guangdong 5 18034) Abstract: As an important part of project investment management, project investment control directly affects the efficiency of the use of project investment funds. With the rapid development of China's engineering cost consulting industry, many engineering construction projects control the engineering cost by entrusting engineering cost consulting units, and control the total investment of construction projects within a certain amount to ensure that construction projects achieve better economic and social benefits. This paper analyzes how the cost consulting company can help the owners to effectively control the investment of construction projects. Keywords: cost consultation; Owner; ClassificationNo. China Library in Investment Control: [TU-9] Document ID: A DocumentNo.:1671-8089 (2012) 06-0136-02 I. Overview The owner of a construction project refers to the funds for carrying out a certain project. Cost consulting companies generally accept the entrustment of project owners, provide professional services for the determination and control of construction projects, and issue project cost achievement documents [2]. The work of the cost consulting company runs through all aspects of the project construction, from the project investment decision-making, preliminary design, construction stage to the final building maintenance and operation stage, so as to assist the project owner to comprehensively and effectively control the construction project cost, reasonably control the project construction cost, save construction funds and improve the economic benefits of the project according to the investment control objectives and timely, professional and reasonable opinions provided by the cost consulting company. Through investigation, the author found that the understanding and practice of construction project cost consulting service companies in different regions are quite different in terms of the current situation of domestic cost consulting industry. How to ensure that the cost consulting company can effectively help the project owner control the investment according to the actual situation of the project is the premise and foundation for the healthy and smooth development of the cost consulting industry. Second, the main work content of the whole process investment control of the engineering cost consulting company. The main goal of investment control of construction projects is to analyze the investment target system of construction projects by using the general principles of cybernetics, so as to ensure that the investment target is not broken or the scope of breakthrough is minimized, thus ensuring the economic and social benefits of construction projects [3]. Its main work contents are as follows: First, according to the specific situation of the construction project, formulate a detailed project cost control plan, and prepare budget estimates and budget estimates according to the project plan and preliminary design provided by the owner; Second, prepare the bill of quantities and pre-tender estimate according to the engineering construction drawing; Third, put forward reasonable and scientific suggestions for the bidding and related contract negotiations organized by the owner to ensure the economic benefits of the project; Four, comprehensive project actual situation to prepare the project plan, record the payment details; Fifth, assist the owner to timely review the expenses incurred by on-site visas and design changes, and provide the price review of consulting services such as labor, materials and equipment entrusted by the owner related to investment control. Provide the dynamic analysis report of cost control to the owner and adjust the cost control target; 6. Prepare or review the completion settlement and submit it to the owner for review, summarize and file the project cost details, and complete the economic index analysis of the whole project. Third, how to help owners control the investment in construction projects. In view of the main contents of the whole process investment control of the above-mentioned engineering cost consulting company, the author summarizes the following suggestions on controlling the project investment based on many years' experience: (1) In the design stage, the cost consulting company should first make clear the importance of the preliminary work of the project investment. According to a large number of investment control data of engineering construction projects at home and abroad, it is analyzed that its investment can affect 75% ~ 95% of the total project investment in the preliminary design stage, and it will affect the total project investment in the later stage of the project. At this stage, the cost consulting company should assist the owner in the design scheme competition and modify the investment scheme on the basis of optimizing the design scheme. Apply the principle of value engineering to optimize the investment control of the winning design scheme, and analyze the function and cost of the projects that have great influence on the investment, such as design scale, structural form to be adopted and important equipment. Before the design begins, the investment plan should be decomposed, the construction drawing design should be controlled within the approved design budget, the quota design should be implemented, and the design should be controlled according to the allocated investment quota on the premise of ensuring the use function of each specialty. (2) Bidding stage 1. According to the bidding law, detailed rules for the implementation of local bidding, project scale, project nature and engineering technical requirements, the construction bidding documents are compiled and the contract types that meet the characteristics of the bidding project are selected. The bidding documents must be complete to meet the needs of bidders for accurate quotation, signing contracts and handling economic disputes. In the process of bidding, assist the tendering agency and the entrusting unit to answer the questions about commercial terms raised by bidders in time. Strict and perfect construction contract is the premise of preventing or minimizing construction claims, effectively controlling investment, ensuring project quality and reasonably achieving progress goals. Regarding the construction contract, it should be noted that the template of the construction contract is strongly recommended all over the country at present and must be adopted, otherwise the contract filing and review will be more troublesome. However, due to the universality of the contract text, there are many blanks and options in the contract, so it should be filled in carefully to avoid inconsistency; In the contract, the principle of project valuation, the determination of unit price of design change, the payment method of progress payment, the terms of breach of contract, performance guarantee, dispute settlement, etc. should be clearly expressed in language, so as to avoid ambiguity, ambiguity or misunderstanding in contract execution and unnecessary trouble. 2. Preparation of Pre-tender estimate and Bill of Quantities According to the contents of the bidding work, the principles for determining the local project cost at that time, the engineering technical requirements and the market price level, the Bill of Quantities and Pre-tender estimate suitable for the project duration and quality objectives shall be prepared within the time specified in the bidding documents. Through careful calculation, strict examination and comparison with similar projects, scientific, accurate and reasonable pre-tender estimate and maximum price are provided. After the bid evaluation, make a detailed analysis of the bid quotation of the first successful candidate with reference to the pre-tender estimate, focusing on the seriously unbalanced quotation and the quotation obviously lower than the single cost, and submit a written analysis report to the owner within the specified time, requiring the first successful candidate to make a written clarification, so as to prevent and solve the disputes that may occur in the contract execution in advance. (3) Project implementation stage 1. After the signing of the construction contract, the annual and monthly capital use plans shall be prepared in time, so that the owner can know the capital obligations in each stage of construction in advance, ensure the timely payment of the project progress payment and avoid the risk of claim. The consulting company shall, after on-site verification, review the progress payment declaration form of the construction unit according to the monthly engineering quantity audited by the supervision unit, and make accounts and submit them to Party A for approval. 2, design changes adhere to the advanced technical and economic audit, and then decide the design changes. Any design change shall be subject to technical and economic review and approval before implementation. If there is no need to change the technology, the owner's consent should be obtained in advance, and the necessary economic analysis should be carried out to calculate the possible amount and the owner's affordability, and analyze its impact on the planned investment amount for the owner's reference when deciding whether to implement the change. 3. After the winning bidder enters the site and before the construction, the on-site visa will actively participate in the drawing disclosure and joint review meeting, fully understand the design intent, read the drawings carefully, and find out the mistakes, omissions and deficiencies in the drawings as soon as possible, which may solve the drawing problems of the on-site visa before the construction. The on-site visa signed and recognized by the on-site supervision engineer should first be qualitative according to the bidding documents and contract terms. If it is really outside the scope of the contract, the cost can be calculated according to the pricing principle of the contract. If, after analysis, it is determined that the work content has been included in the quotation of measures fee or the comprehensive unit price of bidding, it will not be charged. (IV) Project Settlement According to the relevant regulations of the state and local governments, a completion settlement plan should be prepared before the project is completed and accepted, and the requirements for completion settlement data, settlement procedures and settlement principles should be put forward in writing, and implemented after being reported to the owner for approval. Assist the owner to complete the completion settlement audit in time. In order to ensure the quality of settlement work and complete the final link of investment control, we should follow the guiding principles of "full preparation, handling affairs according to regulations, collective decision-making, sufficient basis, reliable process and credible conclusion". At the same time, the combination of grading audit and parallel inspection is adopted to effectively prevent accidents and human errors of staff and ensure the accuracy of settlement work. File management based on integrity, truthfulness, accuracy and system. The consulting company should be able to independently prepare and complete all kinds of project settlement based on all economic and technical documents from the design stage to the project handover and even the warranty period. After settlement, analyze the economic indicators of the whole project, accumulate empirical data and hand them over to the owner. (V) Quality Assurance Measures As a powerful cost consulting company, in order to ensure the quality of service, it is necessary to establish a series of special work rules and workflow to ensure work efficiency and quality. Such as: code of conduct for cost engineers, practice guidelines for cost consulting companies, confidentiality system, quality system documents, cost consulting workflow, work discipline, reward and punishment measures, etc. 4. The purpose of the cost consulting company is to help the owner to plan and control the investment cost of the construction project by effectively using its professional knowledge and skills, and make it run through all stages of the whole project from preparation to completion and acceptance.