Study On The Influence Of Contract Factors On Overall Cost Control In International Projects

In recent years,Chinese Contractors are playing a more and more important role in the field of international project contracting,have contracted or will contract to participate in various types of large or medium-sized international engineering project.According to the Engineering News Records 2015,65 Chinese contractors are among the top 250 international contractors,while no other country having more such contractors.However,quantity never equals ability.There are still too few contractors in China that can be compared to the top international contractors in developed countries,besides,quite a few projects contracted by Chinese contractors have not been so profitable.As a matter of fact,the profit of the international engineering project depends largely on the cost control during the entire process of project,while such cost control related closely to the contract factors throughout the project.It has drawn grand attention about how to achieve optimal profit by conducting effective contract management and cost control.In this paper,there firstly presents a general analysis of the interaction relation between whole process const control and contract factors according to the concept of both,while the contract factors considered in this paper include contract documents and contract management.Overall,contracts factors are the main and effective means for cost control,they are mutual influenced and interactional,thereby promoting the development of the project controllable.In this paper,a convention center project in Africa will be as an example and demonstration for a detailed study of various aspects of contract factors influencing cost control in international engineering project,during which the author tries to put forward measure suggestions about how to enhance cost control by seriously taking and properly dealing with the contract factors.The focused points includes: payment conditions,materials and equipments,bank guarantee,price adjustments,currency pair,design standard,extreme conditions in the aspect of contract documents and contract management team,contract documents management,payment management,performance management,procurement management,variation and claim management in the aspect of contract management.According to the case analysis of the project,it is revealed that in international projects,the contract factors can indeed significantly affect the cost control.Especially on the early stage of the project,namely the tender and contract negotiation stage,if the contractor can be able to secure advantages in the contract,it will play a very positive impact on the whole process of the project cost control.At the same time,if international contractors want to avoid risks and to get a good return,they must also pay particular attention to the whole process of continuous construction contract management,compliance as the top priority,with due attention to the claim,to ensure their own interests.The author hopes that this paper can provide some reference for the contract management of international contractors.