Evaluation of the cost control practices used by construction firms in Ghana

Large sums of money have been lost in most public and non-public sectors in the construction industry due to unsuccessful projects in relation to time and cost. Cost overrun is intense in the developing and Sub-Saharan countries and this depicts that Project Cost Control (PCC) is major challenge to some members handling a project and contractors as well. Therefore, this study aimed at determining the cost control practices used by construction firms in Ghana. In order to achieve the aim of the study, three (3) objectives were established which were to identify the cost control practices used in the Ghanaian construction industry, to identify the challenges associated with the cost control practices in the Ghanaian construction industry and to identify the strategies to improve the effectiveness of the cost control practices in the Ghanaian construction industry. With these objectives, an extensive literature review was conducted from which variables on sub-contractor’s risks and communication were identified. The variables were subsequently used in the development of a structured questionnaire. The questionnaire was distributed and fifty-nine (59) was retrieved and used for the analysis of the study. The analysis was done using the mean score ranking and content analysis. With the objective one, it was realized that, the most often used cost control practice is cashflow/S-curve. Material cost variance was ranked second, followed by earned value and overhead variance. With the second objective, it was realized that, lack of knowledge on the use of available tools and technology occurs most in the Ghanaian construction industry as indicated by the respondents. Usage of old methods and concepts was ranked second followed by striving in observing various sources of regular cost data and over emphasizing of results while ignoring the process of project cost control. With the third objective, the respondents indicated that, construction firms should be consistent about their approaches of controlling cost. Furthermore, the respondents indicated that, clients and their advisors should closely monitor construction firms to ensure they are applying any form of cost control system on their project. They also indicated that, construction firms must properly-establish standards and protocols in monitoring the sources of cost data that arises during the course of project execution. Lastly, construction firms must also endeavor to educate their work personnel on the use of some cost control systems and its applicability on site so as to ensure its ease in adoption. Based on the findings of the study, it was recommended that, construction firms should be consistent about their approaches of controlling cost. If managers become consistent on the cost control processes to adopt, it becomes easier in transferring the knowledge to others. Also, clients and their advisors should closely monitor construction firms to ensure they are applying any form of cost control system on their project. This can serve as a motivation for construction firms to adopt such practices. This study was limited to D1K1 and D2K2 construction firms in the Accra metropolis. This study was also limited to cost control practices that are used at the construction phase of a project

Source: KNUST