Research On Cost Management Of The EPC Contracting Project Of The Electric Power Construction Company

To lower cost and raise economic benefit is a permanent topic for the existingand development of enterprises. Along with the changing of market environment andsocial economic environment, the cost management of enterprises shall also step on,especially in such a situation of today’s improvement of information technologies.The result of cost management decides whether the enterprise develops healthily orgoes vanishing. So there is certain need and feasibility to study on the costmanagement.The cost management of EPC projects is increasingly paid more attention by thequalified enterprises, and we’ve found many problems existing in the process ofproject cost management. First is the choice and use of the managing method. Secondis the weak control in the management process. These problems result that some EPCproject failed to reach the expected controlling effects or targets, and some projectswas even suspended. So it is imperative to introduce the cost management into thefocus of EPC projects.This paper took the electric power construction company as a background,analyzed the current situation of cost management, especially the current situation ofthe cost management of EPC projects and the whole construction sector, and listedand discussed the inner and outer factors that influencing the cost management. Thepaper raised methods and ways to lowering cost and increasing profit on all the linksof tendering, contracting, design, and construction, and also raised ideas andmeasures on the project cost management. It is suggested to use the project progresssoftware P6from Oracle to control the project progress and plans, in order to reachthe target of cost control. In the cost management of EPC projects, design, progress,safety, quality, expenses, contract and project risks are all the main effecting factors.The paper was based on the practical situation of cost management of the whole EPC project, and elaborated the necessity and importance of the project cost managementfrom five aspects: actively expanding sourcing channels to lower sourcing cost;strengthening the leading effect of design to control construction cost from thebeginning; establishing the inner construction ration of the enterprise to forcing theconstruction cost control; strengthening change and claim management to cope withconstruction risks; and use the new management method, namely the earned valueanalysis, to frequently and timely analyze the influence of progress on the cost, andfind the difference between the cost and progress at early stage, so that to takemeasures before getting worse, and thus realize an active management and control onproject cost. This will help the Electric Power Construction Company to solve thecost management related problems, establish cost management strategies, and winadvantage for the development of the company, so that getting more competitiveness.