ABSTRACT
This chapter differentiates cost accounting and controlling cost. Controlling a project’s cost is presented as a two-part process of managing its cost. Monitoring and taking remedial action, the two parts of the controlling process are explained. Selecting the activities, line items, and the cost elements to control, reporting frequencies, and when to consider remedial action are discussed. Interpretation of monitored project status and root causes of cost variances in quantities, unit costs, and output performance, including various types of changes, are provided to enable readers to better understand their corrective action options. The importance of identifying the stakeholder accountable for the cost variance and how a stakeholder’s remedial action may be governed by the delivery system and pricing option used for the project is emphasized. Remedial action decisions are categorized and explained. Corrective action disputes, dispute avoidance, and preferred settlement options are provided.
