Earned Value Technique is an Essential Project Management Tool to Prevent Cost Overrun

Abstract

The cost of construction projects has a long history of exceeding the planned cost. At the project level, this is termed as “Project Cost Overrun”. This research reviews the main critical factors of causing the cost overrun of the projects in the construction stage. These factors have been collected from previous literatures and studies to identify the reasons behind the inefficiency of the existed site cost monitoring and control system in the construction projects. The research has then used the identified factors to develop a proposal for modifying the existed cost control system enabling the construction firms to implement Earned value technique for monitoring and controlling the site cost in the construction phase. This research is the second part of a M.Sc. Research work has been taken place on Saudi Arabian and Bahraini building companies to identify the efficiency of existed cost control methods applied by these construction companies in their projects. The suggested management system will assist the project manager in monitoring, controlling and forecasting the project cost and preventing project from going over run in its cost.

Keywords: Construction Management, Cost Control, Project Management, Earned Value Technique, Site Management