UNIVERSITY OF THE EAST

CIVIL ENGINEERING DEPARTMENT

Caloocan

COURSE: NCE_4401: Construction Cost Engineering

ACTIVITY NO.: M1: ACTIVITY NO.1

TITLE: Reaction Paper on: Development of Cost Engineering System in

Construction

NAME: KENJIE B. DELA ROSA

SECTION: NCE_4402 – 1B

PROFESSOR:

DATE: August 30. 2022

RATING:
 What is cost engineering? A cost engineer must forecast costs and expenses for
the manufacturing process, identify and address risks, and create tactical plans to
minimize excessive financial loss for project buildings. In my opinion, engineering
design affects a product's total cost of ownership. Understanding a product's actual cost
and the factors that affect it throughout the design phase could direct the process and
produce more competitive options. Cost engineering focuses on project management,
planning, and scheduling as well as cost estimation, cost control, business planning and
management, profitability analysis, and cost risk analysis. The cost estimation is mainly
the focus of this special issue. Based on the information available at the moment, cost
estimation is a methodology used to anticipate or predict the likely future cost of a good
or service. A product's cost is heavily committed at the conceptual design phase.
Therefore, estimating a product's cost at an early stage of design and basing design
decisions on the knowledge can result in significant cost reductions. Designers are
becoming more interested in the costs associated with their decisions and using the
cost as a design motivation. Cost must now be taken into account during product
development and optimization in addition to performance and schedule.

This suggests that the transition to a new system of construction cost

management, which would integrate the preliminary evaluation of the investment costs,
the estimated pricing, the contract pricing, and the system of the actual costs
determination, be used to improve construction pricing. This system would also allow for
the connection and management of the aforementioned processes. The interconnection
of the investment and construction process stages is made possible by construction
cost management, which also manages the transitions from one type of cost to another,
from investment to estimated, from estimated to contract, from contract to actual, from
actual to operation cost, and from operation cost to investment cost of such facilities
that are slated for future implementation. Cost engineering has long been a distinct type
of career internationally. In industry and capital construction, the engineering approach
to the management of investment and production costs is commonly utilized. Cost
engineering solutions have been developed and put into use by an increasing number
of businesses in recent years with the purpose of optimizing their capital investments at
each stage of construction.

The creation of a single system for the formation, management, and control of
construction costs is the ultimate goal of national and municipal regulation of pricing. As
a result, it would be desirable to adopt the concept of cost engineering and use it as the
foundation for developing construction pricing control systems at the national, regional,
and municipal levels. The federal standard of cost engineering in construction, which
governs a uniform procedure, purpose, and general principles of cost formation and
control at various stages of the investment and construction process, must be created
and approved in order to develop the system of cost engineering in construction
because construction pricing is subject to concurrent legislative regulation. The
requirements of laws and rules of procedures, as well as transitional procedures from
one type of cost to another, the process of expertise, and cost management, will all be
clearly connected by this document. As a result, economic laws are not the only ones
that apply to the processes of determining and examining the cost of construction. They
undoubtedly have a strong engineering and technical foundation and call for
construction price professionals with the right knowledge and abilities.