Cost Control: Planning for Predictability
A Foundational Guide for Smarter Project Delivery (PC-005-P)
By David Gray | DavidGrayProjects.com
Introduction: Budget Overruns Aren’t Just a Problem—They’re a Pattern
It’s not just that capital projects go over budget. It’s that they always seem to go over budget.
Why? Because too many owners rely on cost tracking instead of cost control. They measure instead of managing. And when that happens, cost escalation doesn’t creep—it sprints.
This post breaks down how owners can implement true cost control strategies—ones that drive accountability, improve forecasting, and build trust from boardroom to jobsite.
Cost Control vs. Cost Tracking
Let’s get something straight: tracking a blown budget doesn’t fix it.
Cost control is proactive. It starts before the first dollar is spent—with solid estimating, contingency planning, and scope alignment. And it continues with constant oversight of commitments, forecasts, and trends.
Cost tracking, on the other hand, is reactive. It waits until things go sideways before raising the flag.
The Building Blocks of Real Cost Control
1. A Well-Defined Budget Baseline
Your budget isn’t just a number—it’s a strategy. That means it must be built on clear assumptions, scope alignment, and cost classification standards. Without this, tracking variance is meaningless.
2. Commitment Management
Every contract, PO, and change order affects your forecast. Owners must establish a system where commitments are logged, reconciled, and reported consistently—ideally in real-time.
3. Forecasting and Trending
A project is a living thing. Forecasting means constantly adjusting your financial outlook based on current performance, market conditions, and risk exposure. Trending helps identify if slippage is accelerating.
4. Contingency Management
Contingency isn't a slush fund—it’s a strategic reserve. Define who owns it, what qualifies for usage, and how it’s replenished. Without clear rules, contingency vanishes without impact.
5. Reporting That Drives Action
Too often, cost reports are just data dumps. Real cost control means actionable reporting—clear visuals, executive summaries, and focus areas that help decision-makers act before there’s a problem.
A Quick Story from the Field
On one government project, we were handed a budget that “looked solid.” But there was no cost classification structure, no aligned scope documents, and no clear rules for how contingency was allocated.
Six months later, the project was already 11% over budget—and no one could explain why.
We rebuilt the baseline, classified every commitment, and implemented monthly cost trending. It didn’t erase the overrun, but it gave the leadership clarity—and stopped further bleed. That’s what real cost control does: it prevents panic by building predictability.
Final Thought: Predictability Builds Confidence
Executives don’t need every number to be perfect. But they need to trust that surprises are rare, responses are swift, and the financial story is clear. When owners lead with cost control—not just cost tracking—they protect more than budgets. They protect reputations.
Read the consulting version of this article:
Change Management in Capital Projects: How to Navigate Shifts Without Losing Control – Albers Management
About the Author
David Gray is a capital delivery strategist, owner’s representative, and founder of DavidGrayProjects.com. With over two decades of experience helping organizations bring complex projects to life—from data centers and healthcare facilities to higher-ed campuses—David blends practical delivery with forward-thinking strategy.
He writes about project controls, capital planning, and real estate development to help leaders deliver smarter, faster, and more sustainably.
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