By implementing good control practices, owners can lower project costs by as much as 30%
By John K. Hollmann Edward W. Merrow Independent Project Analysis, Inc.
Atrend needs to be reversed. For the past 20 years, owners in the chemical process industries (CPI) have reduced their cost-engineering function because cost engineering was perceived as “overhead.” This tactic did not improve cost outcomes; it negated other improvement trends. Those who chose this route are now finding that cost-effective projects are just a dream.
Merrow and Yarrosi reported in 1994  that the average cost growth (the ratio of actual costs to estimated costs) for projects was declining. That trend has since changed. Since 1994, neither average-cost growth nor variability (the ±…