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Cost Management

Cost Management

”Cost” is one of the most important elements for the success of a project. It is important to constantly manage the costs with relevant targets in mind, throughout the entire process from planning to completion of the project, including budget setting during the planning phase, design estimate reviewing, comparison of contractors’ quotations, management of design alteration and cost adjustment during the design phase.
NCM constantly grasps the latest market prices and brings out the proper price reflecting the characteristics of each project in order to provide clear and highly persuasive information for decision making of a business owner, from the vast, accumulated cost information held by the entire Nikken Group. Furthermore, it can be provided more in-depth and high-quality cost management which integrates the design know-how and cost engineering, through value engineering (VE) and cost-down method (CD).

What We Do

■ Planning Cost Management Strategy
A cost management strategy is originally prepared by properly understanding construction market conditions and utilizing the latest data based on our entire track records of quotation comparison made for annual construction costs of more than one trillion yen. In order to maintain the transparency of the cost estimate without any omission or duplication in budgeting, necessary information is provided to the essential quotation documents at the planning phase of the project’s procurement strategy through the viewpoint of cost management.

■ Cost Planning at Master Plan Phase
By estimating the construction cost according to the facility requirements and revealing related costs emerging from various construction works, it enables to grasp the entire project cost strategically. Also it is presented a reasonable target cost and project cost allocation by comparing the cost estimate with benchmarks (price per unit of the area by the type of construction, distribution ratio, etc.) developed referring to similar projects (building purpose, specification, etc.).

■ Cost Controlling at Design Phase
After reviewing the design process from an economic point of view, it is provided to offer advices in terms of cost according to the design contents. If there is a discrepancy between the estimated cost and the target cost, it will be suggested VE and CD in detail after reexamining given requirements, the extent of construction works, and specifications. The cost estimate calculated by a designer will be reviewed continuously for its validity, while checking the conditions of the entire project cost according to changes in construction cost, and reorganize it through examining related costs.

■ Cost Controlling at Procurement Phase
It is closely reviewed the validity of the contents of the quotation submitted by contractors. If there is any discrepancy in the cost estimate at the planning/ designing phases, its cause will be examined from various perspectives and perform strategic cost management to maintain the cost within the range of the target budget. In order to reduce the risk of budget increase after signing contract, it is considered any risk on cost including price variation in the market, and adding those information to the requirements of the order contract if necessary.

■ Cost Controlling at Construction Phase
It will be controlled the increase and reduction of construction cost derived from design alterations. Concerning a design alteration, it is clarified the party responsible for the alteration by each item and constantly manage the share of financing and the influence on the project budget.

Experts

Masato Nakamura
Construction Manager

Hisato Hayakawa
Construction Manager

Toshimitsu Takada
Construction Manager