Cost control and cost management through the project

Component	What it achieves
Kostenermittlung	forecasting costs to be incurred or establishing costs incurred
Kostenkontrolle	comparing the current determination against preceding results
Kostensteuerung	targeted intervention in the development of costs, particularly on deviations

What is missing	Consequence
the determination	there is nothing to compare
the control	variances go unnoticed until they are paid
the management	the variance is known and still not averted

The order is unavoidable. No determination, no comparison; no comparison, no basis for intervention. A project in which cost determinations are prepared but never compared with one another has cost planning formally and none in practice.

Cost control compares each current determination continuously against the preceding results. It identifies deviations and attributes them.

That sounds trivial and regularly fails in practice on a single precondition: the comparability of the schedules. Two schedules are comparable only where they follow the same ordering.

Situation	What remains comparable
continuous cost group structure	each group individually
switch from cost groups to procurement packages	the total sum only
switch with a recorded reconciliation	each group, provided the splitting rule is on record

This requirement is not theoretical. German case law has already established that schedules ordered by trade and cost updates ordered by cost group yield no comparability beyond the total. Submissions resting on such documents do not hold.

How a sound comparison is built is covered in the article on target-actual comparison. That article also sets out how a reconciliation between two orderings is recorded.

Cost management is targeted intervention in the development of costs, particularly on deviations identified by cost control. It is therefore the only one of the three activities that changes the state of the project.

The decisive point is rarely stated: costs can only ever be a reflection of the design in hand. Changing the costs therefore requires changing the design. Cost management that merely revises allowances downwards without anything changing in the building is not management but a reposting.

This also explains why timing is decisive. The scope for intervention shrinks with every step of design progress and is effectively closed after procurement. The system of interventions is covered in the article on cost management.

Cost control appears in several work phases as a basic service, particularly as a comparison of each current determination against its predecessor. It is therefore owed rather than optional.

Notably, it is not itself a stage of cost determination. It takes place between the stages and depends on their comparability. For the contract this means: how the determinations are built decides whether the control owed can be performed at all.

A further duty sits outside cost planning in the narrow sense but connects directly to it: where it becomes apparent that the costs determined will be exceeded, the client must be informed without delay. This duty to inform is standard in German design contracts and is taken seriously by the courts.

Cost control and cost management presuppose a benchmark against which testing occurs. That benchmark is the Kostenvorgabe, the cost target, frequently termed a Kostenobergrenze, cost ceiling, in contracts.

The standard expressly provides for testing the feasibility of a cost target before it is fixed. That is the single most important sentence on this subject, because no amount of management can hold an unrealistic target.

In practice this means: before a cost framework is agreed as a binding ceiling, whether the schedule of accommodation, the standard and the target fit together must be tested. Where they do not, either the cost side or the scope side must be adjusted, and before contract.

The consequences of an agreed ceiling and the tolerances applying are covered in cost risks, contingencies and tolerances. It also explains why a ceiling that arises unnoticed is more dangerous than one expressly agreed.

Three preconditions decide whether control and management function. All three are set at the start of the project and can hardly be retrofitted later.

Precondition	What it secures
A consistent ordering	the cost group structure stays leading across all stages, with additional attributes carried in parallel
Recorded assumptions	quantity, unit rate and origin for every material item; only then does a variance show whether quantity or price was the cause
An early rhythm	comparison runs continuously rather than only when a stage is finished; the pre-tender estimate may be prepared repeatedly for that reason