Cost Control Techniques Used On

Building Construction Sites in Uganda

ABSTRACT
Many pro|ects n Uganda and the word over have suffered from
cost and tme overruns due to factors stemmng from poor cost
contro durng the desgn and pro|ect mpementaton stages.
Research amed at studyng the cost contro technques beng
used n Uganda was done on a seecton of 130 contractors
nvoved n the constructon of budngs n Nakawa dvson,
Kampaa Cty. It specfcay studed the cost contro technques
currenty beng used by ndvdua deveopers; the probems faced
and proposed soutons. The research was abe to dentfy seven
commony used cost contro technques whch ncude schedues,
budget, nspecton, meetngs, reports, records, montorng &
evauatons. It was noted that most pro|ect managers and
contractors n Uganda fnd dffcuty n controng pro|ect costs
due to probems whch ncude deays by cents to reease money,
deay to make a decson, ack of materas and equpment, bad
weather, overappng of actvtes, uncear and ncompete
drawngs, makng good defectve works, and generay faure to
contro the productvty of resources. Others of paucty were due
to theft and vandasm, nterference by cents, hgh abour
turnover, and nsuffcent knowedge on cost contro technques.
The study was abe to estabsh that the probem was actuay not
the technques to use but rather the ack of knowedge of the
technques, the poor management of the cost contro
methodoogy, and the genera poor ste organsaton and
nadequate supervson.
KEY WORDS: Budngs, Contro, Cost, Technques, Uganda
1.0 INTRODUCTION
In constructon amost a cents are nterested n obtanng fuy
functona factes competed n tme, cost, quaty and scope. A
buder who s abe to construct wthn the estmated tme and
budget, to the rght standards and scope s an exceent buder.
Cost contro s a process where the constructon cost of the
pro|ect s managed through the best methods and technques so
that the contractor does not suffer osses when carryng out the
actvtes of the pro|ect. One of the ams of cost contro s to
construct at the cheapest possbe costs consstent wth the
pro|ect ob|ectves. Utmatey the decson of the manager that
somethng shoud be done dfferenty and the transaton of that
decson nto practce are the actons to acheve contro (Harrs
and McCaffer 2002). Rana (1999) observes that t s of tte use
after a process has been competed to dscover that ts cost was
actuay too much. Most pro|ect managers and contractors n
Uganda fnd dffcuty n controng costs on ther constructon
stes due to a number of probems whch ncude poor pro|ect
preparaton, apse n management and contro, over budgetng,
poor materas, abour shortages, ncreased cost of materas,
deays n deveres, wastage of materas, unexpected weather
changes, oss of materas, nsecurty and poor communcaton.
Ths resuts nto cost and tme overruns, confcts, and sometmes
abandonng pro|ects. Ths study was therefore carred out to
dentfy the cost contro technques used n Uganda and propose
effectve ones to the budng constructon partes. It specfcay
ooked at probems faced by the contractors n controng the
costs on ste, studed the cost contro technques commony used
by the contractors durng the constructon stage and proposed
remedes to be used by contractors on stes to contro ther costs.
2.0 COST CONTRO IN CONSTRUCTION
Durng the executon of a pro|ect, procedures for pro|ect contro
and record keepng become ndspensabe toos to managers and
other partcpants n the constructon process. Accordng to
Dharwadker (1985), cost contro can be acheved by seectng the
rght man for the rght |ob, the rght equpment and toos for the
rght work and the rght quaty of materas, n the rght quantty,
from the rght source, at the rght prce and devered at the rght
tme. Managers are expected to be we equpped to execute the
pro|ect, wth due consderaton to the quaty of work, yet wthn
the estmated cost and mts.
2.1 !ro"ect Resources and Controls
Resource nputs at the pro|ect ste whch produce outputs n the
form of work ncude: men, materas, machnery and money. The
success of a pro|ect depends upon the performance of these nput
resources when controng costs (Hendrckson 1998). The cents
shoud do everythng possbe to avod unnecessary deays as t s
one of the eadng causes of cost escaaton.
2.1.1 #aterials
One of the bg probems on most budng stes s the arge
amount of materas wastage due to varyng crcumstances
(Buter 1982). Ths probem requres a supervsor to constanty be
on the ookout for the osses. Accordng to Hendrckson (1998),
wastage of materas can take pace durng the procurement
process, storage, and durng utsaton. Wastage durng
procurement can resut from one or more of the foowng causes:
buyng materas of wrong specfcatons, buyng more than the
actua requrements to cater for unreastc and unforeseen
eventuates, untmey buyng of short-fe materas, mproper
and unnecessary handng of materas, and wastage n
transportaton. Wastage durng storage can occur due to the
foowng reasons: damages and breakages durng handng,
deteroraton due to ncorrect storage, ncorrect mantenance and
short-shef fe and osses due to fre, thefts/vandasm, and
exposure to extreme cmatc condtons. Other causes are ack of
pre-work preparaton and coordnaton, mproper accountng and
poor storekeepng, neggent and careess atttude of the
supervsor, hgh rate of deteroraton due to ong storage at the
pace of work, and over-ssues from the centra stores and faures
to return unused surpus materas to the stores. Accordng to
Chtkara (2005), some unavodabe wastages are nherent durng
utsaton, but excessve wastage s of concern to the
management as t affects the productvty adversey, wth
consequences of extra costs. Most probems reatng to matera
wastage revove around requstonng and orderng, recept and
checkng of deveres from suppers, offoadng and handng,
storng and protectng, and ssung, dstrbutng and use of
materas.
2.1.2 !lant
In constructon, some tasks are abour ntensve, some
predomnanty empoy equpment, and some use a combnaton
of both. Whe the actua work done and the assocated abour s
accounted by the supervsor concerned, the equpment and
productvty contro s undertaken to determne ts empoyment
tme, the output acheved, and ts productvty at ste
(Hendrckson, 1998). The man purpose of the contro s to
mnmze wastage n utsaton so that the overa pro|ect cost s
not affected (Chtkara, 2005). Anatwe (2006) observed that
ndustrasng constructon woud probaby reduce the cost of
constructon by about 30% whch woud key sette the back og
of 25% of Ugandans wthout proper housng.
2.1.$ a%our
Labour productvty acheved at the ste for a gven work provdes
a measure of the abourers effcency and effectveness and the
eve of ste organsaton. It shows the tota tme for whch the
abourer was empoyed at work, the tme he was productve on
work and the tme he remaned unproductve (Chtkara 2005).
Craftsmen use about 40% of avaabe tme on productve
actvtes, and about 33% of the tme on non-vaue addng
actvtes (Anatwe 2006). Productve tmes are wasted for
varous reasons such as de watng, unnecessary traveng, ate
startng, eary quttng, unschedued breaks, and deays n the
recept of tos, deays to receve materas and work nstructons.
Assessment of the eve of ndustrasaton n Uganda and the
effect on productvty and other metrcs were done by Anatwe,
(2006) and the resuts ndcated that the cost of abour s of the
order of 30 to 40% of pro|ect costs. The metrcs confrmed that
abour s a sgnfcant factor n the cost of budngs and more
efforts are requred to ndustrase the ndustry. Accordng to
Chtkara, (2005) cost contro process nvoves accountng of
actua productvty, and comparng wth the standard, anaysng
the causes for varatons takng remeda measures for
mprovement. Rana (1999) emphasses the need for cose
supervson and good workng reatonshp.
2.1.& Ti'e(Cost Relationshi)
Chtkara (2005) sad the reatonshp between tme and cost s a
very mportant aspect n the contro of costs on ste as any
varaton n tme has automatc mpcaton on cost. It s mportant
to report and record a the works nvovng materas, pant and
abour on stes. Ths enabes the contractor be abe to know the
costs and expenses of the resources used on ste and compare
wth the nta cost budget. Varous report technques used
ncude; day or weeky and monthy recordng, schedue contro,
ste day dary report and the pro|ect budget.
$.0 R*S*ARC+ #*T+ODOO,-
$.1 Introduction
Over 130 stes n Nakawa dvson n Kampaa cty were dentfed
for the study. Consderaton of costs, ease of access to ste,
avaabty of nformaton, nature of the ste and the type of data
requred was made, the research adopted 98 sub|ects wth
acceptabe responses for the study. It was not possbe to use
statstca methods n desgnng the research as no organsed data
was avaabe. Observatons, use of ntervews and questonnares
were empoyed n gatherng nformaton pertnent for the study.
Scaed questonnares were used to measure atttudes and beefs
of the technca personne usng Lkert scae, n whch respondents
were gven choces refectng varyng degrees of ntensty.
Generay the eve of agreement or dsagreement was measured
usng a fve ordered response eves, (Lkert, 1932).
Ordinal scale . to 1 in descending order
.
&
$
2
1
Decreasing degree o/ disagree'ent
0igure 1 1 0i2e ordinal 'easure o/ agree'ent 3i4ert5 16$27
$.2 !ilot Sur2e8
A pot survey was run on a few questonnares so as to emnate
any ambguous statements: negatve statements or statements
whch were unduy 'eadng' and to refne the questonnare.
$.$ Data Anal8sis and Docu'entation
The data coected from the survey was anayzed usng Mcrosoft
offce exce and "reatve Indces" (RI) technque. Presentaton was
n the form of graphs, bar charts, and tabes. The RI technque
was used by Hot et.a. (1996) n the same context of appcaton
usng the formua:
RI
1n
1
2n
2
3n
3
4n
4
5n
5
(1)
5 n
1
n
2
n
3
n
4
n
5
Where, n
x =
the number of respondent agreeng wth the x choce.
Ths formua s aso used n reaton wth the Lkert scae. The
computaton of RI usng ths formuae yed the vaue of RI rangng
from pont two to one, where pont two represent mnmum
strength and one the maxmum strength (Hot et a 1996).
&.0 ANA-SIS AND 0INDIN,S
The nvestgaton focused on contractors as they are the
mmedate vctms of the consequences of poor cost contro,
athough osses are usuay transferred to cents. Out of a tota of
130 questonnares sent, 98 responses were found adequatey
fed for the study, representng a response of 75 percent and the
fndngs were as beow:
&.1 Cost Control Techniques Used on Sites
The seven cost contro technques used by contractors on stes
were found to ncude: schedues, ste nspecton, the pro|ect
budget, meetngs, cost and work progress records and reports,
montorng work and cost performance and evauaton usng bs
of quanttes and others not known as beow:
Fgure 2: Cost Contro Technques n Percentage
The above fgure ustrates the extent to whch the dfferent
technques where used by the sub|ects to contro cost. Work
programmes were the most wdey used wth reported axty n
the mpementaton. Workers were not brefed on the tme and
cost targets. Evauaton of work was second to work schedue n
appcaton but was not techncay apped where scentfc
measurement and comparson wth standards woud be used.
Evauaton of works was by observng how much had been
executed and comparng wth the money aocated.
Tabe 1: Cost Contro Technques Used n Budng Stes n Kampaa
S/No.
Cost Contro
Remarks
Technques n use
1
Work Programmes
Contractors used schedues to montor progress and
fnanca performance. It s a good method snce work
progress can be measured and reated to cost.
2
Inspecton of works and comparson made wth the
Inspecton of Works
budget. Sometmes sub|ect to |udgement, hence ackng.
3
The pro|ect Budgets
Cost attached to responsbty centres wth work targets
to be accompshed. Its used n reaton to schedues
makes t the best too for cost contro.
4
Ste Meetngs
Meetngs hed to revew the progress of work and
compare to the monetary aocatons. Good as t
provdes some motvaton to workers and a stake
hoders are up to date on the performance of work
5
Record Keepng
Documentaton of actvtes carred out to enabe eary
detecton of devatons from the set standards
6
Cents, consutants and the contractors used montorng
toos of schedues, budgets, nspecton and feedbacks to
Montorng
Work and
keep a watch on the cost performance. Wth use of the
Cost Performance
rght toos of contro, t produces good resuts.
7
Ouantfcaton of works and comparng wth the costs
n the b of quanttes. Inspecton was aso reportedy
Evauaton
of Works
used to evauate works. Ths heps to ascertan that the
Carred Out
progress of work s on the rght track.
8
Others
Stes that dd not have partcuar method to use.
&.2 #aterial 9astage on Sites
The causes of matera wastages on stes were found to ncude;
poor supervson of operatves, poor handng of materas, msuse
of materas, poor storage and stackng of materas, devery of
excess matera on ste, poor ste organzaton, ate devery of
materas, poor coordnaton of management and technca sde,
poor tme management, bad weather condtons, use of unsked
operatves. Poor ste supervson wth a RI of 0.521 (7.5%) was
found to be the eadng cause of materas wastage. The most
effectve contro was found to be the proper supervson of
workers on ste wth a RI of 0.455 (7.9%) and the most neffectve
was the sef contro by a ste staff or workers wth a RI of 0.8
(13.8%).
&.$ *qui)'ent Use on Site
Forty sx contractors (47%) obtaned equpment on ste by hrng.
No contractor obtaned equpment by purchasng as most of the
actvtes were manuay carred out. Mechansed constructon of
budngs n Uganda s nsgnfcant yet Hendrckson, (1998) and
Anatwe, (2006) says productvty can be mproved by
substtutng abour wth equpment.
&.& Ti'e o/ Co')letion o/ !ro"ect
Ony 32 contractors sad they were abe to compete ther works
wthn the schedued tme consttutng 33% of the tota samped,
and 67% of contractors were not abe to compete the on-gong
pro|ects wthn the schedued tme due to bad weather, deayed
payments, ow abour productvty, ateratons on drawngs, deay
to dever materas n tme and faure by oca authorty to
nspect work.
..0 CONCUSION
The am of ths study was to study the cost contro technques
used by contractors on on-gong pro|ects and propose measures
that w enabe pro|ects to be competed as budgeted. The seven
cost contro technques used by contractors on ther stes n
Uganda were found to ncude use of: schedues, the pro|ect
budget, nspecton of works, cost reports, ste meetngs,
montorng of cost and work performance and quantty evauaton
usng the bs of quanttes, and others dd not have we defned
technques or dd not even know there were tradtona cost
contro procedures. The research was unabe to estabsh concrete
evdences that actuay the stated technques were effectvey
used as documents to prove the appcatons were found ackng
or not there at a. The survey was abe to frmy state that, "the
probem of cost contro s actuay the ack of knowedge and
nadequate pannng for the mpementaton couped wth the
poor management of constructon resources".
Probems reported by the contractors that ed to deays and
subsequent faure to construct wthn budget ncuded: bad
weather, ow resources productvty, sckness of ste abourers,
ack of materas, nstructons from cents to deay work as they
wated to cear some ssues or mobse money. Other probems
were due to deayed payments by cents, overappng of
actvtes, ateratons by cents, makng good defectve work,
uncear detas on the drawngs, and deay by oca authorty to
nspect work and gve a go-ahead. From the study, the greatest
cause of deay n on-gong pro|ects was reported to be due to ate
reease of money by cents.
:.0 R*CO##*NDATIONS
The probem of cost contro was actuay not the technques beng
used, but rather the poor management of the technques and the
axty n supervson n most stes vsted. It s therefore strongy
recommended that contractors shoud constanty attend refresher
courses n constructon pro|ect management as the study
dentfed ack of knowedge of the cost contro technques and
nadequate cost contro methodoogy as the bggest probem. In
amost a stes, workers were not aware of the performance
targets mpyng there were ack of knowedge and
communcaton apses between supervsors and workers. Cost s a
product of the use of pro|ect resources and the ony better way of
controng the cost of constructon s best handed rght at the
desgn stage. Durng mpementaton, procedures of cost contro
of resources ony heps n detectng varances and formuatng
correctve measures other than watng unt work has been
competed and nothng much can be done (Forster 1981).
Materas: It s proposed that materas wastage shoud be
reduced by ensurng that:
Materas are devered as requred to cut ste storage tme,
materas devered are those specfed, ssung |ust the rght
amount of matera wth ony a reasonabe aowance for wastage
to workmen, ensurng that workmen are not producng excessve
amount of off-cuts, aocatng and preparng storage areas so that
when materas are stored, they do not deterorate. Empoyng a
reabe store keeper who s abe to mantan we kept bookng
system, doube sgnng of devery notes, use of wegh brdges
and spot checks for materas deveres are a desrabe to
mnmse wastage. Theft and pferng of materas can aso be
safeguarded aganst by, ssung of tems by store men and
keepng records of a the materas on ste ncudng empoyng
fu-tme securty guards. Stes shoud be hoarded wth aarm
systems nstaed around key materas around the ste and
ncudng ensurng that the whoe ste s t up at nght.
Pant: Anatwe, (2006) found out that n Uganda, the use of
machnes at budng stes are nsgnfcant yet the mechansaton
of constructon can reduce the cost of budngs by 30%.
Contractors are encouraged to adopt the use of machne as t has
the advantages of speedng up work, savng abour, producng
better quaty works and are economca n a number of cases,
besdes beng abe to do what cannot be done manuay. Once
brought to stes, machnes shoud be maxmay utsed as any
redundant tme can ead to hgh cost.
Labour: To mprove on the abour productvty on stes, the
research proposed: recordng abourers work progress, day work
evauaton, recrutment of abourers wth the rght sks for the
|ob, substtutng abourers wth equpment, and havng schedues
and proper contro procedure and records n pace. A good
workng envronment shoud aso be created wth work motvaton
and proper communcaton system ncuded. Reguar nspectons
by the: cent, consutant and oca authorty and eary detecton
of varances usng standard productvty are hghy recommended.
Wthout a good quaty pan, pro|ect contro cannot be acheved.
Pro|ect contro requres effcent, effectve and vgant processes
and actons to ensure ts successfu accompshment.
;.0 R*0*R*NC*S
Anatwe, H.M., (2006). Assessng the degree of ndustrasaton
n constructon -A case of Uganda. |ourna of Cv Engneerng and
Management, Vo X, No 3, 221-229 ISSN 1392-3730 prnt / ISSN
1822-3605.
Buter |.B., 1982. Eement of Admnstraton for Budng Student,
prnted by the Anchors press Ltd, Great Brtan.
Chtkara, K, K., 2005. Constructon Pro|ect Management: Pannng,
Schedung, and Controng. Tata McGraw H Pubshng Company
Ltd.
Dharwadker, P. P., 1996. Constructon Management, 2nd Ed;
Oxford & IBH Pubshng Co. PVT.LTD New, Deh. Inda.
Forster. G., 1989. Constructon Ste Studes: Producton
Admnstraton and Personne, 2/E. Pubsher: Longman.
ISBN-10:0582019710.
Harrs, F and McCaffer, R., 2002. 5th ed.; Modern Constructon
Management. Granada Pubshng Lmted, 8 Grafton Street,
London W1X 3LA.
Hendrckson, C., 1998. Pro|ect Management for Constructon.
Carnege Meon Unversty, PA 15213.
Hot, G.D., Proverbs, D.G. and Love, P.E.D, (1999) "Logstcs of
materas handng methods n hgh rse n-stu constructon",
Internatona |ourna of Physca Dstrbuton & Logstcs
Management, Vo. 29 ISSN: 10, pp.659 - 675.
Lkert, R., 1932 "A Technque for Measurng Atttudes" Archves of
Psychoogy 140 1 - 55.
Rana, V.K., 1999. Constructon Management Practce. Tata
McGraw-H Pubshng Company Lmted7, West Pate Nagar, New
Deh, Inda.