Contingency for Cost Control in Project Management: A Case Study
This paper provides a case study of the application of cost management techniques for project management of capital works within a major Australian electricity corporation. Historical data was collected from the corporation's archived files to establish the performance status of completed capital works projects. A survey of the corporation's project staff was also conducted to determine the current usage of cost management techniques and further explore the findings of the historical data search.The research indicates a reluctance to utilise formal cost management procedures on minor projects, estimated to cost less than $1 million. The time constraints allocated to project management planning and the perceived cost to implement procedures were identified as contributing to the limited use of formal cost management on minor projects.The paper concludes that increased risk of poor budget performance is inevitable if formal cost control is not applied to capital works projects, and recommends informal risk assessment and cost contingency measures to address this issue.