# Managing cost for construction

• ### Question

• Hi there!

I work as PMO for a supermarket chain. We are in the process of building a new supermarket.

The project is divided into 2 main categories:

1) Construction: Everything related to construction. Manage by an Architect (third party). We have a spreadsheet where we estimate cost for each task. This is calculated using the following formula: Estimated Cost = Expected Cost + Unexpected Cost + Architect Fee [e.g. Estimated Cost= 100 + (100*.05) + (100*.10) = 115.5]. The Architect Fee is always the same %, but the unexpected cost can use a different %.

- First question: How do we manage these costs in MS. Project 2013? Is it possible to assign a resource based on a % as shown in the example? What is the best practice? Or is it better to calculate in excel and entered manually?

2) Equipment: We purchase directly from supplier. They take care of everything including installation. We pay per work not per hour.

- Second question: Is it recommended to create a cost resource for each supplier?

- Third question: What is the difference between managing cost thru resources vs entering cost in the summary table?

Ignacio

• Edited by Monday, August 10, 2015 8:05 PM fix formula
Monday, August 10, 2015 7:19 PM

• Okay, that's different, it isn't managing the costs, but doing some time based reporting on costs. If you need to do earned value reporting, then you need costs. I would just assign Fixed costs to tasks plus resource costs.

Don't use cost resources.

To do the % calculation you need to use a custom field then copy result manually or using VBA to the Fixed cost field. Alternatively do calculations in Excel then copy to Fixed cost field. To see Fixed cost field apply teh Cost table.

• Marked as answer by Wednesday, August 12, 2015 8:16 PM
Wednesday, August 12, 2015 6:13 AM

### All replies

• Firstly, what costs etc are your finance team collecting. No point in duplicating what they are doing. Most projects I've worked on, Finance does all the cost tracking so the PM only has to track time plus anything that causes a change in costs.

I would probably use Excel for all your calculations and then copy the costs for key areas to teh Fixed cost column in the Gantt chart if you do indeed want to track costs in Project.

Don't use Cost resources. They are there for things like travel, training costs etc. Equipment etc is best as a fixed cost on a Task.

Monday, August 10, 2015 8:34 PM
• Thanks for your suggestions Rod! I understand your point of view.

In this particular situation, will you consider tracking the following variables?

• ACWP: Actual cost of work performed
• BCWP: Budget cost of work performed
• BCWS: Budget cost of work scheduled

The variables are part of the Cash Flow report in Project Professional 2013.

Thanks again.

Ignacio

Tuesday, August 11, 2015 1:38 PM
• Okay, that's different, it isn't managing the costs, but doing some time based reporting on costs. If you need to do earned value reporting, then you need costs. I would just assign Fixed costs to tasks plus resource costs.

Don't use cost resources.

To do the % calculation you need to use a custom field then copy result manually or using VBA to the Fixed cost field. Alternatively do calculations in Excel then copy to Fixed cost field. To see Fixed cost field apply teh Cost table.

• Marked as answer by Wednesday, August 12, 2015 8:16 PM
Wednesday, August 12, 2015 6:13 AM