DOI: 10.7910/dvn/kzq0oh
title: Cost management in a building renovation project in the city of Hartford-CT, USA.

description: Abstract

Cost management is a fundamental step in any project, regardless of size and characteristics, as it is essential to balance finances and maintain the quality of services. It is important to develop good cost management through a systematic and judicious approach, as the market has become increasingly competitive, especially with regard to the construction sector. In this way, seeking to align the client's needs with the use of project management methodology, as well as the use of its tools within the scope of renovation, this work aims to plan and control costs throughout the project's renovation process, the in order to prevent failures during the stages that could affect the defined deadlines and planned costs.
Keywords: WBS; Parametric; Bottom-Up; EVA; TCPI.
description: According to data released by “Mordor Intelligence” [MI] (2023), the homebuilding sector has been the driving force in the US economic recovery from the COVID-19 crisis since the third quarter of 2020, generating double-digit growth rates and making significant contributions to the economy and the overall recovery of the construction industry. Limited mortgage rates, robust demand for larger living spaces, and a low inventory of homes on the market continue to drive the sector. Home renovation, in addition to new construction, is a significant aspect of residential construction. According to the author, by 2023, the annual value of residential building upgrades in the United States is expected to exceed $205 billion. More than 330,000 new rental units are scheduled to be delivered nationwide. Eight metros are expected to set five-year highs in new apartment deliveries, despite the obstacles of the pandemic. Considering the growth forecasts in the residential sector until the end of 2023 and the great competitiveness in the construction industry, it is important to find new ways to optimize routines and comply with plans. It is not uncommon to face problems with delays in deliveries, which eventually lead to increased expenses that can even compromise the quality of the project. To prevent this from happening, good cost management in the construction is essential. And to help in this process, it is necessary to rely on technology and process tools to ensure better cost control in projects, applying solutions that enhance the organization of activities and the company's results (hinc.com.br, April 13, 2023)
According to the “Project Management Body of Knowledge [PMBOK]” (“Project Management Institute [PMI]”, 2017), project cost management includes the processes involved in planning, estimating, budgeting and cost control, so that the project can be completed within the approved budget.
Thus, the final objective of this work is based on planning and controlling labor and material costs, using cost management tools as a method, in order to avoid internal and external interference that could compromise planned costs, deadlines and the 30% gross profit expected by the end of the work.
description: In the initial phase of the project, some resistance points were observed during the implementation of the methodology, mainly regarding the team composed of subcontractors, since it was a methodology unknown to most of them. Despite the initial resistance, it was possible to notice an adherence on the part of those involved, when the work began. It was also notable that before the project, the works were sequenced in a disorganized manner, mainly regarding the control of documentation, costs and deadlines. The project brought great improvements in this sense, generating historical data that will serve as a basis for new projects.
With regard to the use of cost management tools, it is considered that the objective of this case study was achieved, mainly regarding the completion performance index (IDPT), since it allowed a predictive analysis by pointing out deviations related to delays in the schedule, and consequently in the cost of some activities. This allowed for important decision-making, preventing such deviations from compromising the reserves determined at the beginning of the project. Regarding the 30% gross profit expected by the end of the project, the project achieved 28.77%. It is also worth mentioning that the results left a great impression and satisfaction on the part of the client and the sponsor after the project was completed, both in relation to the new practices applied, which provided great learning for those involved, and also the final result.
It can be concluded that cost management aspects are essential for obtaining better results in projects. It is also suggested that, for future projects, improvements in the development of schedules should be made, as well as the use of more structured software to control deadlines and subcontracted services.