Rearch on the Engineering Cost Management and
Estimation
You Tao , Chen Hongping,Wang Zuzhi, Zhao Liping
School of Hydraulic Engineering
Changsha University of Science and Technology
Changsha, 410076, China
E-mail:
Abstract—The slow development of the engineering cost management and estimation method has been the bottleneck of the rapid development in the engineering industry and construction production. The economic development of the market and the changing investigation subjects urgently need the reform and renewal to the current engineering cost management.The unification of engineering cost management system in China to the international practice after reform not only adapts the requirements of national economic market development, but also creates conditions for the Chine construction enterpris to participate in the international construction market.
Keywords- engineering management, cost estimation, Bill of Quantities, engineering quota
I.I NTRODUCTION
With the development of the economic market, the investigation scale of engineering projects in China keeps growing fast. The annual fixed asts investigation increas at a high rate over 9.8% , and the main investors develop towards the trend of diversification. Multiple investigation subjects coexist such as government investigation, collective investigation, private investigation, foreign governmental investigation and the loan from the foreign financial organizations. Becau of the variation of the investigation subjects, the original estimation method using quota plus cost ,which only rve one investor, the government ,could no longer adapts to this outside environmental change. The product price of the construction determined by the original cost estimation method can not reflect the necessary social cost of the construction product, the actual production level and capability of the construction enterpris. Also the product price of the construction determined by the original cost estimation method can not reflect the necessary adjustment function of the construction product, the market signal function and the accounting function. The automatic adjusting function of the market could not be put into full play and the market could not carry out effective resources allocation. The slow development of the cost estimation method has been the bot
tleneck of the rapid development in the engineering industry and construction production. The economic development of the market and the changing investigation subjects urgently need the reform and renewal to the current cost estimation method, and an urgent reform is needed to the pricing model of the engineering product according to the economic market rule.
II.CURRENT SITUATION OF ENGINEERING COST
MANAGEMENT AND ESTIMATION IN CHINA
To adapt to the outside environmental change, the reform needs to be carried out to the engineering estimation method. Especially with the issue of new quota, a big change occurred in the engineering cost estimation. The paration of the quantity and the price which had been anticipated for many years finally appeared in the new quota .And the bidding method of Bill of Quantities which is an internationalized practice has been adopted. The application of Bill of Quantities in the engineering circle in China is the breakthrough point of the engineering cost estimation method to the international practice, which t a solid basis for determining the product prices. However, the bidding method of Bill of Quantities is only in the preliminary pha in China. Becau of the lack of matching policies and mechanisms, and the shortage of application experiences, problems exist in t青春宣言
he bidding method of Bill of Quantities in China, which is not as advanced as the estimation method of Bill of Quantities currently internationally applied.
The goal of the economic reform in China is to establish an socialism economic market mechanism. The management mode of engineering construction in China is the product of planned economy. Although the planned economy once worked well, its shortcomings are becoming more and more apparent. The examination and approval mechanism have been applied by the administration department in the planned economy, which is prone to neglect the actual requirements
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from the engineering market and make the investment effectiveness low. The administration department has the decision power but the construction companies or units have to take all the responsibilities and risks before and after the construction project completion, which totally twists the relationship between the responsibility and the power. The planned economy inhibited the proper competition and restrain the rational utilization, allocation and optimization of the social resources, which has an adver influence to the scientific decision, enhancing the investment benefit and activating the creativeness of massive design and construction personals. The engineering construct
ion has been transferred by the market economic administration mode and the administration department is in charge of industry development planning, general layout of the engineering and regulation of engineering construction market. The administration department will no longer participate or give instructions to the project construction and economic production activities of the engineering enterpris.
As the investor of the infrastructure construction, the engineering enterpris actually have the project decision power, the management power during construction, and the engineering enterpris should take the responsibility and have their benefits. The engineering design and construction units or departments are pushed forwards to the market to participate in the market competition and cure their survival and development. Therefore, under the new situation of changing management mechanism and investment collection system, the engineering enterpris must advance with the era, reform the budget quota management formed and conventionally ud in the planned economy. Only in this way could the requirements of the economic development of the socialism market in China be met. The budget quota management in the engineering construction in China is being transferred to the engineering cost management mode, which contains the engineering construction investment management and the engineering cost control management, the later being in the range
of price management. Becau the engineering structures are also one kind of commercial products, their prices are determined by the engineering market.
III.INNOVATION IN THE ENGINEERING
MANAGEMENT AND COST ESTIMANTION
With the development of economic market, many gratifying changes have been made in the engineering cost estimation management.
A.Re-recognizing the function of engineering cost关于家风的名言
男羊女猪婚姻是否相配The investment estimation in every construction pha has been gradually paid more attention in recent years and the economical and beneficial consideration has become an important factor in the investment decision. The goal of high production and low investment is pursued by the economical construction. In the past the design departments or units gave more consideration to the technical feasibility and neglected the economical benefits, and in recent years they realized that the budget estimation could not only reasonably estimate the engineering cost of the design schemes, but with a feedback function, could also affect the lection of design schemes and play an important role in t
香蕉皮的妙用he optimization design, which needs the clo cooperation between engineering economical engineers and technical design engineers, to compare design schemes economically and technically to lower the engineering cost.
B.Adoptation of the basic price system.
The basic price system means the national unified unit price is provided to the manpower and material in the same t of quota, and is only ud in the calculation of the engineering rvice cost. Becau the engineering projects all over the country could not avoid facing the situation that the local material prices differ from place to place. The ratio of the material cost to the general investment usually is high. However, in the same kind of engineering field, the construction rvice cost should be basically the same, which could not be higher due to higher material prices and could not be lower due to lower material prices. The basic price system avoids the rvice cost calculation simply bad on the direct cost of the engineering quota. In this method the engineering rvice cost is relatively reasonable.九宫格数独
C. Popularization of the engineering bidding system.
The popularization of the engineering bidding system could change the former planned management
pattern in which the administration departments allocate the design and construction tasks. With the popularization of the engineering bidding system in the area of engineering project design, construction, and the procurement of equipments and materials, the clients could choo the best design unit, construction contractors and supplier of equipments and materials. The engineering enterpris would be promoted to enhance their production efficiency and management level to rai the competition capability in the market. Furthermore, the popularization of the engineering bidding system encourages the fair competition and could effectively control the engineering cost in every project and this conception has been commonly accepted.
D.Rearching and managing engineering cost in dynamic
methods.
To rapidly and objectively reflect the engineering cost information of every region during every period, it is urgently necessary to regularly publish the price information of various kinds of equipments, materials, salaries etc ac, in the quota stations of every industry in every region. The engineering cost indexes should also be published and the local construction engineering quota stations should strengthen the work in collecting, arranging and publishing engineering price information.
E. Gradual improvement of engineering cost management. The Association of engineering cost management in China has been founded and every professional committee was founded. Many consulting companies of cost estimation have been established to provide the high quality rvice in reasonably determining and effectively controlling the engineering cost of the projects. Besides, the practicing qualification system of cost estimation engineers has been under construction.
Generally, the engineering cost management system which adapts to the economic development in the market is gradually forming shape and developing, and will make well functions in the economic construction in China.
.
IV.THE DEVELOPMENT TREND OF THE
文不加点
ENGINEERING COST MANAGEMENT AND
ESTIMATION
The establishment of the socialism economical market system is a long historical journey. The reform of the engineering cost management system should be beneficial to the macro-control of the
engineering cost, should be beneficial to carry out the market competition and dynamic management. The ultimate goal of reform is to gradually establish the engineering cost system reflecting the market-forming prices. The anticipated main developments in the engineering cost management are in the following aspects.
A.The function of engineering cost will be more obvious.
According to the Company Law, the clients take all the responsibilities of the construction projects, are in charge of collecting construction fund and paying back bank loans, which will make their responsibilities and power corresponding. The governmental administration departments are responsible to the macro-management and supervision, and the current approval methods of projects by the administration departments will be gradually improved. During the policy decision and construction of the projects, the function of the engineering cost will become obvious and be utilized to control the construction investigation. During the engineering bidding procedure, the construction enterpris are bidding independently and the tender evaluation procedure is relatively fair and transparent, which encourages the better construction enterpris and eliminates the wor ones in the market competition, effectively control the construction risk of the projects, make construction completion according to the schedule, lower the engineering cost and produce economic benefits.
B.The engineering investigation cost management.健康生活图片
The engineering investigation cost management carries out the pricing by utilizing the model of controlling quantities and guiding prices in principle. During one period, the quantity in engineering project construction means the production efficiency and consuming level are relatively stable. The administration department of engineering cost could properly regularly modify the engineering quota to reflect the relatively advanced production efficiency and consumption level, require the according implementation. However, considering the commercial prices, manpower salaries, prices of materials and equipments, and every item of rvice pricing fluctuate with time in different regions, the requirement should be relead and the guidance prices are provided as the reference. In the engineering cost calculation method, the paration of quantities and prices suppod the basically stable quantities and changing prices. The unit price of manpower, material and machinery utilization, and every item cost could be lected by the estimators according t to the period and location situation. No hard rules will be given to the other costs, preliminary cost and price rising costs etc ac. The complicated and changing market situation could be relatively better adapted and the calculated engineering project costs are relatively reasonable and advanced, maintaining the authority of the engineering cost.
C.The popularization of the bidding bad on Bill of
Quantities
The popularization of the bidding bad on Bill of Quantities is an international practice. During the bidding procedure, the clients provide the Bill of Quantities, and the bidding contractors determine the offer according to their technical equipments, production efficiency and level, bad on the market prices and internal quota of the construction enterpris, which encourages the superior contractor exceed and is beneficial for the adaptation of new techniques and process, the deduction of the engineering cost and the improvement of engineering quality.
The popularization of the bidding bad on Bill of Quantities could strongly promote the construction enterpris to strengthen the internal quota management. Every quota ts the important standard for the construction enterpris to carry out production management. The enterpris could become competitive in the industry only by improving production efficiency, lowering consumption and reaching advanced production level. At the same time, the internal quota of the construction enterpris and the national budget quota are complementary to improve the engineering investigation cost management.
D.The construction of information network of construction
engineering cost.
The engineering cost estimation industry will keep developing and the information system of engineering cost will be gradually improved, which form a ba for the construction of national construction engineering cost information network.
E.Unification of the engineering cost system to the
international practice
The unification of engineering cost system in China to the
international practice after reform not only adapts the requirements of national economic market development, but also creates conditions for the Chine construction enterpris to participate in the international construction market. After China entered WTO, foreign construction companies are allowed to enter the market of China, the design and construction enterpris should also go to compete in the foreign markets.
V. CONCLUSIONS
From the native engineering market to the international engineering market, the engineering enterpris need to learn the international engineering rules and regulate operations according to international practice. Only in this way could the production level, management level and market competition capability of the design institutes and construction enterpris be improved. The engineering cost management in China has advanced and numerous technical and economic engineers contribute a lot for the national construction, the reform is strongly needed to the engineering cost management with the economic development.
A CKNOWLEDGMENT
This rearch is financially supported by Hunan Education Bureau program (NO. 05C295), China.
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