A Comprehensive Approach to Construction Cost Management in the Context of Public Investment

Abstract

Today, the interaction between government entities, private organizations, research and consultation centers in terms of pricing issues in construction is not efficient enough. In this regard, it is necessary to adjust the mechanisms of construction cost management.Aim. The presented study aims to develop an organizational and economic framework of construction cost management that would improve the interaction between executive authorities and the participants of the investment-construction process at the stages of development, coordination, and implementation of investment programs, while also increasing the accuracy of construction cost estimation.Tasks. The authors develop a methodological framework of construction cost management aimed at observing the maximum limit of public investment in construction in the context of implementation of investment programs; determine the content of the structural elements of the organizational and economic framework of construction cost management; develop an organizational and economic framework of construction cost management in the context of public investment.Methods. This study uses general scientific methods of analysis and synthesis, economic-mathematical and graphical modeling, methods of expert and comparative assessments, methods of pricing in construction, and methods of cost engineering.Results. An organizational and economic framework of construction cost management is developed, allowing for increased accuracy and reliability in determining the estimated cost of construction. The framework also regulates the interaction between the participants of investment program implementation as well as economic mechanisms and methods involved in construction cost management at different stages of implementation of investment programs - from development and coordination to implementation. The presented approach to construction cost management solves the problems of pricing and investment planning, cost management and investment policy formation. It creates a single information space, which makes it possible to quickly and flexibly respond to information requests and make management decisions with allowance for the objectivity, reliability, and completeness of the data provided. Thus, the organizational and economic framework of construction cost management provides a new format of interaction between the participants of targeted investment program implementation and calculation of the estimated construction cost. The authors propose a methodological framework for controlling construction costs, which includes management planning, assessing and determining the estimated cost of construction, controlling and monitoring construction costs, registering the actual cost of construction. This covers all stages of the construction object’s implementation life cycle.Conclusions. A methodological framework of construction cost management is developed with an aim to observe the maximum limit of public investment in construction in the context of implementation of investment programs.