This document discusses cost control proposals for construction projects. It proposes using either a separation order or cost-on-order approach. With separation orders, costs are more transparent as different contractors are responsible for different parts of the project. However, aftercare is an issue. Cost-on-orders make costs and maintenance fees clear upfront but the general contractor handles all aspects. The company assists with cost analysis, verification, and control through the different phases of a project to keep it within budget and deliver quality.

1. Proposal of Cost Control for
Construction
Keikakuin Ltd. manages the cost and
assists leading the project to success
through our cost-control-focused
Construction Management

2. Problems of Separation Order
Developer
CM tie-up
Keikakuin
Ltd.
Contract Contract Contract
Separation of Orders
General contractor Reserved contractor1 Reserved contractor2
Merits of the Separation Order Disadvantage of Separation Order Result:
■Clearer cost transparency ■Problem of Aftercare The effect of the cost
(Possible to control the cost of wholesale can be confirmed.
traders and trading companies.) To solve this issue, contract negotiations Cost-effectiveness
■The early order is possible. with manufacturers and construction in the quality and the
■Wider choices of manufacturers and companies are made. construction cost can
overseas orders in FF&E and construction be estimated.
materials.

3. Examination of Cost On Order
Case１ Advantage to Developer
Developer Order by initial budget
(In fact, it is based on deficit
budget. The budget gap
should be filled somehow. ) ●The proof of grounds is positively
Contract Maintenance Construction promised along with validity and the
fee Fee cost verification of the amount of
money of the construction presentation
and the amount of money of the
presentation of the developer.
General contractor
Keikakuin Ltd. ●The validity of the cost presentation of
the general contractor and the
manufacturer can be confirmed by
Contract
Effect verifying the cost and uneasiness is
of cost canceled.
●Strict cost management makes possible
to maintain the quality and value of the
Manufacturer project, and the cost which works for
the quality improvement of the building
The quality and the cost can The cost assessment of the becomes possible.
be managed by proving not manufacturer and the construction
company becomes possible
an impossible assessment by the construction cost
but grounds from an comparison and the assessment
exaggerated initial budget. service by our company.

4. Case Study in Cost Verification of Our Company
Case study
1 Estimate analysis and comparison of each company in tender (From foreign countries if necessary)
2 Separation of labor and material
3 Analysis and comparison between cost and profit when a part of construction materials is separated
4 Comparison of the estimate between the tendered companies and a new company D
5 Analysis and comparison of estimate excluding the traders who are separate and compared in 3.
Client
Keikakuin Ltd.
Cost Management
Tender Best price
Construction company A,B,C Evaluation
CASE 1 CASE 2 CASE 4
Material
Bid comparison
separation
of each company
Company A’s Company B’s Company C’s Estimation
Labor
estimate estimate estimate of a new
Material company D
CASE 3 Partial separation

5. Advantage and Disadvantage of Separation Order And Cost On Order
At the Separation Order At the Cost-On Order
The transparency of the cost increases, Clear. Because the construction
Cost Transparency ○ ○ expense and the maintenance fee are
previously decided.
and the cost control becomes possible.
Advanced order for each construction type is Advanced order for each construction
Advanced Order ○ possible. It leads to shortening the term of
works.
○ type is possible. It leads to shortening
the term of works.
It is guaranteed not through the general General contractor is in charge of the
Risk on Purchaser’s Side ○ contractor but each manufacturer and
construction company.
○ maintenance of the construction. No
contract needed with Sub-contractor.
No need to handle by each one since it
Although it is not maintained by the general
is only through the general contractor,
Aftercare △ contractor but the purchaser, there is no
problem in terms of maintenance.
△ but, time and the cost must be taken
into consideration.
Our Company Fee － Our fees cannot be compared because it is counted in accordance with the work volume.

6. Work Phase Planning
phase１
・Presentation of cost calculation of rough estimate according to plans.
・Cost analysis by a construction company at the time of tender.
・Consultation of purchasers of FF&E and ordering system (Separate Order
and Cost-On Order), and cost analysis by comparison.
・Preparation of presentation materials and meetings.
phase2
・Cost verification of VE and CD after bidding.
・Cost analysis of prices listed by manufacturers, suppliers, and distributors
of procurement (ex. FF&E).
・Cost verification of separation order.
Phase3
・Presentation of cost analysis through materials.
・Final report reflecting on the result of cost control.