1. Work Breakdown Structure vA hierarchical system which sub-divides larger elements of the project into smaller elements called “work packages”.

2. C OST C ONTROL vProject cost control begins with the preparation of the cost estimate and the construction budget. vThe information that is generated for estimating purposes can be in terms of productivity rates, unit costs, or both. vSmall contractors frequently work in terms of unit costs while large contractors base their estimating on productivity rates

3. W ORK B REAKDOWN S TRUCTURE vWork Breakdown Structure (WBS) requires the project to be divided and subdivided into smaller parts vThe smallest unit of the WBS is the work package, which called a contract package if the work is contracted out.

4. W ORK B REAKDOWN S TRUCTURE (cont.) vIt is necessary that the scope of the work for each work package be described in relation to the work to be done in the other work packages. vWork packages should be defined in terms of design, construction methods, and completion requirements, with associated performance dates

5. W ORK B REAKDOWN S TRUCTURE Project must be structure into small elements that are: 1. Manageable –Specific authority and responsibility can be assigned. 2. Independent –With minimum interfacing or dependence on other elements. 3. Measurable –In terms of progress.

6. Characteristics of Work Package 1. Represents units of work at the level where the work is performed. 2. Clearly distinguish one work package from all others. 3. Contains clearly defined start and end dates that are representative of physical accomplishment. 4. Specifies a budget in terms of dollars, man-hour or other measurable units. 5. Limits the work to be performed to relatively short periods of time to minimize the work in progress.

7. The Project Cost System Objectives of Establishing Project Cost System. 1. Keep the construction costs of the project within the established budget, 2. Develop labor and equipment productivity information for estimating the cost of future work

8. Cost Code 9708B 05 03157.20 3 Project Number Area Code Work Type Code Distribution Code vCost Code for stripping concrete formwork for bridge deck (Labor).

9. Project Number vEighth project in 1997 (Bridge) 9708B 05 03157.20 3

10. Area Code vGeographic location OR vAssociate Field Cost to Specific supervisor or Management 9708B 05 03157.20 3

11. Work Type Code 03Concrete 0315Concrete Formwork 03157Wood Concrete Formwork 03157.20Wood Concrete Formwork for Deck 03157.30Wood Concrete Formwork for Abutment 9708B 05 03157.20 3

12. Distribution Code 9708B 05 03157.20 3 1. Total 2. Material 3. Labor 4. Equipment 5. Sub-Contract

13. C OST C ODES vEach account of a contractor's accounting system is assigned its own code designation as a means of identification and classification. vThe most widely used cost codes are CSI (Construction Specifications Institute) and UCI (Uniform Construction Index).

14. Cost Code and Cost Control vAll items of expense are charged to the project where they are incurred.  "General" or "miscellaneous" cost accounts should not be used, is poor practice, and should be avoided. vThe cost code is to serve its basic purpose, it must be understood and used consistently by all company personnel.

15. C OST A CCOUNTING R EPORTS vLabor and equipment summary cost reports must be prepared often enough so that excessive costs can be detected while there is time to do something about them. vCost report intervals are a function of the project size, nature of the work, and the type of contract involved. vThere must be a balance between the cost of generating the reports and the value of the management information received

16. C OST A CCOUNTING R EPORTS (cont.) vCost reports are frequently prepared daily on complex projects involving multiple shifts vMost contractors match their cost control system to their payroll periods and to their time-monitoring system.

17. L ABOR AND E QUIPMENT C OSTS vThe job costs associated with materials, subcontracts, and non-labor items of project overhead are of a reasonably fixed nature. vLabor and equipment costs have considerable uncertainty and fluctuate substantially during the construction period.

18. L ABOR AND E QUIPMENT C OSTS (cont.) vContractor can control labor and equipment to some extent, and require constant management attention vDetailed cost accounting methods must be used with labor and equipment expenses if effective management control over them is to be obtained.