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Section 1 Project Procurement

Section 2 Cost Predictions and Profitability

Section 3 Project Control Systems

Description:  This unit has been designed to enable you to identify the processes involved in procuring projects, producing tenders and estimates and the factors that affect profitability and to analyse and apply cost forecasting, control and reporting techniques in building services engineering project/contract delivery.

Author: Gates MacBain Associates

Section 1  Project Procurement

Aims and Objectives

At the end of this section you should be able to:
  • Describe the types of procurement available and the situation where each could be used
  • Explain the process involved in procurement.

Project Procurement is dealt with in some detail in the units listed below. You should therefore visit these units in order to obtain an understanding on this area of study. These units will also suggest books that are appropriate and point to any websites that you should visit.

Constructionsite Units

Self-Assessment Task

  • List the types of procurement and the situations they are most likely to be used.
  • Select one and explain the process and procedure to instigate it.

Section 2  Cost Predictions and Profitability

Aims and Objectives

At the end of this section you should be able to:
  • Describe the ways that costs are predicted and the ways that profitability can be assessed and costs controlled.

Construction Cost 

It will be necessary to determine the likely cost for a project before in order to assess if it is likely to be profitable and also to assess the financial requirements throughout the project. The book Successful Property Development explores a number of the consideration which relate to a project.  

Funding Projects 

A number of constructionsite units deal with funding for projects so you should look at these, the ones listed below should be studied.  


Cost factors that make up profit within a contract and their relative impact on profitability, cost benefit analysis techniques, cost allocation. Factors which affect profitability including materials procurement, contract terms, contract conditions, human resources, relationships, time and quality


  • Gatepain, RJ,(1995) Successful Property Development, Lincoln, RIA Publishing

Constructionsite Units

Self-Assessment Task

  • Suggest options that can be used to determine the likely costs for a project and ways that these costs can be controlled.

Section 3 Project Control Systems

Aims and Objectives

At the end of this section you should be able to:
  • Explain the main control mechanisms that can be used by the Project Manager.

Project control is that element of a project that keeps it on-track, on-time, and within budget. Project control begins early in the project with planning and ends late in the project with post-implementation review, having a thorough involvement of each step in the process. Each project should be assessed for the appropriate level of control needed, too much control is too time consuming, too little control is too costly.  

Control systems are needed for risk, quality, communication, time, change, procurement, and human resources all of which have cost implications. It is important to review the development process and procedures and how they are implemented. The process of development and the quality of the final product will also need to be assessed.  

An introduction to controlling can be gained from the constructionsite unit ‘Planning and Control’ linked to below.  

Budgeting Cost Control 

The control responsibility can be delegated but the project manager must collate all budgetary information and ensure that they remain within the allocated budget. 

Budgeting is part of the planning function and also serves as a control mechanism giving the basis from which actual performance can be compared, measured, explained and corrected. When the budget is combined with a schedule it serves as a programme of physical completion and provides a most important tool of project management. Ways that can be used to monitor and control costs can be found in the unit Design & Construction Process (Cost Management Techniques).

Constructionsite Units


Self-Assessment Task

  • Explain the main control mechanisms that can be used by the project manager on a project.

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