Construction costs in the US have been escalating for months now, and it’s so far the contractors who are carrying the weight of absorbing these price increases. This, according to a recent study by the Associated General Contractors, who went on to point out that recent tariffs on non-US foreign materials have further intensified the issue.
The Pain of Higher Construction Costs
We often get asked about the distinction between re-baselining a project and creating a change order. I can see why there’s a bit of confusion there because in many respects they accomplish a similar outcome. However, they are fundamentally different processes that serve unique purposes.
One of the most important functions of project controls and cost engineering, is the ability to accurately forecast remaining costs-to-complete on a construction project. With the new Resource Forecasting tools in 4castplus, project controls professionals can now achieve ultimate accuracy and take full control of how projects are forecasted.
Cash moves at a different pace than activities. Maybe that seems obvious, or maybe you’re not sure what I’m talking about; but it’s an important distinction to understand in construction project management.
Project Management = More Than You Think
Before I get started on the details, I’ll give you a quick definition: A CPI Forecast allows project controls professionals to predict the performance of their project using a subjective CPI value rather than the calculated CPI that’s determined based on past performance.
Predicting the future is what we’re all about. But when do you use ETC versus FTC – and what’s the difference?
Projecting the Final Results
The big question everyone – including all project managers and stakeholders – wants to know is, “How long and how much.” That’s a reasonable and typical question; and it’s a question that resonates for the project as a whole, as well as every piece and subsection within a project.