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Common Project Cost Control Problems

Here is a list of common cost control problems found on projects:

- Improper estimates, standards and budgeting techniques.

- Unrealistic budgets.

- Activities started or completed out of sequence.

- Inadequate WBS (Work Breakdown Structure) or insufficient WBS detail.

- Lack of management policy on control practices.

- Poor corporate and project management governance structure and policies.

- Ad hoc budget reduction.

- Inadequate planning.  This is very common, particularly on privately funded projects.

- Unnoticed and uncontrolled increases is scope.  The all too common “Scope Creep”.

- Lack of comparison between “actual” and “planned” costs.

- Unforeseen technical problems.  

- Inadequate contingencies and management reserves.

- Project schedule delays and lack of systems to flag and deal with delays.

- Additional overtime and acceleration costs.

- Escalation of material costs.

- Contractual discrepancies and inconsistencies.  These could result in gaps and ambiguities in contracts which often result in cost increases and erosion of bargaining strength.

- Unrealistic appraisal of in-house resources.

- Improper assessment of risks by the bidding team and by executive management.

- Excessive pressure on the bid team to WIN the project.  “Must Win” projects are often destined for eventual failure. #costcontrol #projectmanagement #projectleadership

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