Cost Control

Hazelton Hanlon Hart’s multidiscipline skill sets allow us to deliver Cost Engineering solutions, from tender documentation to a full suite of post contract services within all construction sectors
Cost Control
Hazelton Hanlon Harts Core focus is on Efficiently Controlling the Cost, minimising the exposure and maximising the return. 
The Margin requires protection, it is fundamental to the continued growth of any contractor, the upskilling of its staff, employment and investment in Future Projects and the next Generation of Construction Industry workers.

State of the Construction Industry
Whilst the Construction Industry Expands, accounting for almost 6% of the National GDP and Construction Costs continue to Rise, Project Margins however continue to fall, intense tendering between contractors for Project Award results in reduced Project Margin to simply continue turnover and "hope for increased cash flow" by way of Variation to Scope. As depicted below, this is the epitome of unsustainability. 

In 2015, The Australian Senate Economics References Committee into Insolvency in the Australian construction
Industry, attributed a range of Cause's related to Construction Industry Insolvency’s, such as;
  1. Inadequate cash flow or high cash use
  2. Poor strategic management of business
  3. Poor financial control including lack of records
  4. Poor management of accounts receivable
  5. Under capitalisation
Right Now
2 Years Post the Senate Committee findings, in March 2017, the Australian Security and Investment Commission released the Australian insolvency statistics, titled Series 1A: Companies entering external administration by industry, July 2013–January 2017.
ASIC's report depicts the Australian Construction Industry accounting for over 17% of all Australian Business Insolvency’s for the period of Reporting. 

The Future
As evident above, the argument can be made that the Nation is not Short of readily available quality Trades and labour, but short on the Principles of Control that both govern and administer the Project and Business efficiently. At Hazelton Hanlon Hart, our cost control services and project specific implemented controls provide the confidence and reliability to effectively manage the Scope, Margin and Change. 

Cost Forecasting 
Protecting the Margin requires accurate financial forecasting of Project costs, based on "actuals" and "predictive".

It is also critical to the pre-emptive identification of cumulative writedowns on project and provides for statistical analysis and reporting on project returns. However,  whilst cost input for materials, consumables and general items is important to the compilation of an accurate Cost to Complete, "direct costs" of "direct labour" is the largest variable in accurate project forecasting and the hardest for organizations to predict, as it invariably contains subjectivism such as risk, uncertainty and opinion. 

So, how do we remove subjective variables across the Labour Spectrum and the delta between what was "allowed" by Estimation and what is "predicted" by Forecasting?

Closing the Gap
The reality between productive hours allowed at Tender as opposed to actual productive hours met on project, in some cases, falls short of expectations. In order to identify where time is going and where our margin is absorbing these costs, Hazelton Hanlon Hart are removing the subjective with objective, by quantifying the mechanisms of labour to produce an Accurate Cost to Complete Forecast by way of compilation, progressive monitoring and updates of customisable and itemised labour tracking tools to identify Production values;
  • Accurate Production Control and Reporting - Analytics on Project Productive Labour values vs Project Contraints
  • Individual Labour Rates -  Productive Values of individuals vs Project Constraints across tasks
  • Group Labour Rates - Analytics on Individual Production Values vs Group Production Values across tasks
  • Transposable Productivity Rates into Schedules - Providing Maximum Productivity across Scheduled Tasks, using Production loss values against Days Worked, Shift Patterns and Environmental Constraints
  • Productive Rates vs Labour Value - Providing the science behind Labour Factor Adjustments for application to remaining Scope and variation works
  • Stutory Obligations -  Analytics using Predictive Forecasting of Award, Allowance, and Trades Specific allowance Increases against remaining Project time and claim Value

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