Project Cost Control

Procedure

03.01.05-Project_Cost_Control-Procedure
TABLE OF CONTENTS
Document History................................................................................................................................... 3
1.0 Purpose ........................................................................................................................................ 4
2.0 Scope ........................................................................................................................................... 4
3.0 Confidentiality and Distribution .................................................................................................... 4
4.0 Cost Control process ............................................................................................................... 5
5.0 Cost WBS .................................................................................................................................... 5
5.1 CWBS Level-0 (Project) ............................................................................................................ 5
5.2 CWBS Level-1 (Project Stage) ................................................................................................. 5
5.3 CWBS Level-2 (Project Cost Type) .......................................................................................... 5
6.0 Cost Control Metrics and Definitions ..................................................................................... 6
6.1 Current Control Budget (CCB) ................................................................................................ 6
6.2 Earned Value Analysis ............................................................................................................. 7
6.3 Accruals..................................................................................................................................... 7
6.4 VOWD ......................................................................................................................................... 7
6.5 Commitment ............................................................................................................................. 8
6.6 Contingency ............................................................................................................................. 8
6.6.1 Deterministic Budget Contingency Assessment ............................................................... 9
6.6.2 Probabilistic EAC Contingency Assessment ..................................................................... 9
6.7 Cash Flow ................................................................................................................................ 10
6.8 Cost Progress Curves ............................................................................................................. 10
6.9 Trend Analysis ......................................................................................................................... 10
7.0 Cost Reporting ........................................................................................................................ 11
8.0 ERP system ............................................................................................................................... 12
8.1 SAP Investment Management Module (SAP IM) ............................................................... 13
8.2 SAP Project Systems Module (SAP PS) ................................................................................. 13
8.2.1 Creation of Project Cost WBS in SAP (ERP System) ......................................................... 13
8.2.2 PMOC, Reporting, Commitments and Close out in SAP (ERP System)......................... 13
8.3 SAP Material Management Module (SAP MM) .................................................................. 14
9.0 Roles and Responsibilities ..................................................................................................... 14
Appendix 1: Project Cost Control Process Map ........................................................................... 16
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 Appendix 2: Cost Reporting Template .......................................................................................... 17
Appendix 3: Example of Cost WBS for Project Budget (pre/post-FID) ...................................... 18
Definitions............................................................................................................................................ 20

Document History

Version Date Author Approver Description of Amendment

No.

1.0 30-June-21 Hussain Al Mahmoud Al First Issue

Tuhami Aamri

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1.0 Purpose
This document has been developed to help employees understand the procedure associated
with providing project teams with a methodology and best practice for effective project cost
control at OQ.

This document is linked to OQ’s Opportunity and Project Management System Policy Manual
and it is recommended to present documents jointly when required.

2.0 Scope
Completing a project within the approved budget is one of the most important project success
criteria. Effective project cost control provides the project team with full visibility of the project
costs, and accurate, up to date, and reliable forecasts to enable timely interventions and
mitigation.

This procedure addresses cost control requirements for pre-FID budget and post-FID - Project
Budget (see Opportunity & Project Management System Policy).

Its target audience includes:

• Project Directors, Project Managers, Project Leads

• finance

• contracts and procurement

• project technical services

• project team members

• consultants

This document is applicable to all OQ projects. Deviations from the mandatory requirements of
this document require the approval of the Project Delivery Lead – COE.

3.0 Confidentiality and Distribution

• This document is internal and is to be treated as confidential and will be retained as per the
Governing Documents Policy.

• This document must also not be disclosed, printed or distributed to any unauthorised individuals
or parties without the acknowledgement of the document’s custodian.

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 4.0 Cost Control process
The Project cost control process will be as follows:

• setting up the Original Budget (BDG) in accordance with the CWBS

• load the cost WBS in SAP

• calculate VOWD, earned value metrics

• calculates the cost forecast

• change control

• cost reporting

Once the project is completed a Final Cost Close-out Report shall be prepared as detailed in
the Project Close-out and Handover Procedure)

5.0 Cost WBS

The Cost Work Breakdown Structure (CWBS) is a breakdown or hierarchical representation of
the various costs in a project. The CWBS is a critical tool in managing the financial aspects of
any project and creates a structure for executing cost control. The CBWS will be created in the
Initiation / Assess phases as soon as there will be pre-FID costs to be registered. The typical CWBS
coding is included in Appendix 3.

CWBS Level Description

L0 Project
L1 Project Stage
L2 Project Cost Type
Table 1: CWBS Level and Description

5.1 CWBS Level-0 (Project)

WBS Level-0 denotes the overall project being developed by Company (e.g. refinery,
petrochemical complex, pipeline). It is the highest level of the scope hierarchy and can be
considered closed only on final overall project completion. The project ID will be XX20001 (seven
alphanumeric characters) where XX is the program, 20 the year, 001 the project number inside
the program.

5.2 CWBS Level-1 (Project Stage)

WBS Level-1 denotes the Project Stage (pre-FID, post-FID)

5.3 CWBS Level-2 (Project Cost Type)

WBS Level-2 denotes the Project Cost Type (contractor cost, owner cost, financing)

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 As an example, the CBWS for the engineering cost in an EPC project - package 1 in the Gas
Network program will be GA18014.02.01.01.02 (GA-Gas Network Program, 18-Year 2018, 014-
Project Number, 02-Post FID, 01-EPC, 01-Package 1, 02-Engineering). More cost account level
can be added if necessary.

The CWBS will be created in SAP and It is advisable that the Cost WBS used for cost reporting is
the same Cost WBS loaded in SAP. The cost WBS shall contain cost items related to the FEED
/EPC contract (will change according to the contract) and owner costs. The Cost WBS and the
Project WBS (see Scope Management and Control Procedure) should have the same Project
ID (Investment Program – Year – Number)

All payment milestones by project phase (engineering, procurement, construction,

commissioning, start-up) are loaded in SAP in order to proceed with the payment when the
milestones are achieved.

The typical CBWS for a pre-FID budget will contain costs related to FEED Contractor, Feasibility
/ Concept Contractor, Licensors, studies, legal, marketing, project management consultants,
Company personnel, travel, permits, contingencies (see Appendix 3).

The typical CBWS for a post-FID budget will contain costs related to EPC Contractor, Company
personnel, travel, project management consultants, third party inspection, Long Lead Items
(free issue from Company), utilities, land, finance cost, legal, administration, company studies,
Site preparation, training, Contingency (see Appendix 3).

6.0 Cost Control Metrics and Definitions

6.1 Current Control Budget (CCB)

The CCB is the original budget of the project plus the approved change orders and budget
transfers from one cost WBS to another.

CCB (Current Control Budget) = BDG (original budget) + CO (change orders) + BT (budget
transfer)

A Change Order is an approved change to the original budget. Proposed changes must be
formally communicated, recorded in a “Change Proposal Form” and assessed as per the
Project Management of Change Procedure (PMOC). The Company Cost Engineer shall ensure
that each contract accurately reports the current budget and variation orders (including
provisional sums/ prime sums drawdown and internal budget transfers if applicable).

Any over commitments from the original budget need business unit approval as per the Project
Management of Change Procedure (PMOC). Similarly, any under commitments from the
original budget shall be considered as savings and the same shall be transferred to the
respective business unit. Accordingly, Company Cost Engineer shall ensure that the Current
Control Budget is aligned with Commitments.

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 6.2 Earned Value Analysis

Earned Value Analysis (EVA) is a methodology which establishes performance indices for cost
performance which provide information on how well the project performing in relation to the
original budget. These indices, when applied to future work, allow to forecast how the project
will do in the future. EVA is a powerful tool which enables senior management to identify the
performance of the project through the following steps:

• accurate display of the project status,

• early identification of trends and issues; and

• a basis for correcting the project course.

The metrics and definitions used in the earned value analysis are provided in paragraph 7.0 – Cost
Reporting.

6.3 Accruals

Accruals are work the has been completed earned or expenses incurred at a certain date but
the invoice related to that work has not yet booked in the system (SAP).

• accruals are needed for any work completed, expense incurred, payment milestones in
progress which have not been invoiced.

• accruals improve the quality of information on financial statements by adding useful

information about upcoming liabilities owned to vendors / contractors.

• accruals and deferrals are the basis of the accrual method of accounting.

• accruals are created by adjusting SAP entries at the end of each month.

• periodically check that actual invoices and invoice payments match prior period accruals

6.4 VOWD

A key element of cost progress is the calculation of value of work done (VOWD). VOWD is the
value of goods and services received, regardless of whether they have been invoiced or paid
for:

VOWD = total invoices booked + accruals

For the purposes of applying the earned value analysis on the project, VOWD shall be
considered as the Inception To date Cost at a certain date. During the calculation of the VOWD
the following should be checked:

• negative accruals (too rapid payment scheduling)

• large accruals (delayed payments to contractors)

• approved contract changes (to be reflected in the VOWD)

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 • financial data (exchange rates; inflation rates, interest, tax rates)

• updates coming from monthly contract meetings

• calculate the VOWD well in advance of period ends

6.5 Commitment

Commitment is a cost that the Company has already made and cannot recover by any means,
as well as obligations already made that the business cannot get out of (ex. award of a
contract, placement of a purchase order)

The purpose of the commitment control process is to enable Company to clearly control and
monitor commitments within the project, and ensure that funds are committed only to planned,
budgeted and approved activities.

The commitment status shall be recorded on a monthly basis and shall include the following:

• This Period Commitments

• To Date Commitments

• Balance To Commit (CCB - To Date Commitments)

During execution, all work carried out must be within the authorized commitment value for each
CWBS element.

All contractual issues shall be resolved and authorized prior to contract close-out. At contract
close-out, if final VOWD is less than authorized commitment then the commitment value
recorded in the ERP system needs to be reduced.

6.6 Contingency

Once the CWBS has been set up in the ERP system (SAP), the contingency should be recorded
under a separate line.

A release of contingency may be required when a risk materializes, for which no provision has
been made in the base cost estimate, and a potential budget over-run is forecast. Subject to
PMOC approval, the amount requested will be transferred and released from the contingency
WBS to the WBS where additional budget is required.

Contingency should be re-assessed in the following situations:

1. when the remaining contingency has been almost consumed

2. when the latest cost forecast for the project exceeds the approved budget amount
including the existing contingency.

When a work scope item has been completed within the project for less than the base cost
budget, with or without any previous contingency drawdown, then it is possible to return the

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 funds to the contingency budget. This shall be done in line with the guidelines in the Project
Management of Change Procedure. The contingency is designed to cover items of cost which
are not known exactly at the time of the estimate but which will occur on a statistical basis.
Contingency status must be reported as part of the monthly progress report.

6.6.1 Deterministic Budget Contingency Assessment

The Cost estimator should complete a deterministic Contingency Assessment for all projects that
will be extrapolated into the original budget (BDG). The contingency to be applied depends
on the project risk score (see Project Risk Management Procedure – paragraph 12) and is
calculated as follows:

Project risk score Risk rating Contingency

>4 Very High 15%

>3 and 4 High 12.5%

>2 and 3 Medium 10%

>1 and 2 Low 7.5%

1 Very Low 5%
Table 2 – Contingency calculation from the project risk score

6.6.2 Probabilistic EAC Contingency Assessment

The cost engineer may also to complete a probabilistic assessment for medium / large projects
on the ETC. These techniques utilize specific software with the Monte Carlo methodology. The
probabilistic methods assign a range of possible outcomes to cost elements and evaluates the
probability of achieving the total Forecast. Also, significant correlations among cost elements
(CWBS) are incorporated into the model. All this information is loaded into the software and the
result is a histogram reporting the ETC value in the horizontal axis and the probability in the
vertical axis.

In the example above we have the following:

Estimate To Complete (ETC) = 1060 MUSD

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 P50 Budget = 1080 MUSD

Contingency = 20 MUSD

6.7 Cash Flow

Long-term cash flow projections for the work shall be prepared with the initial projections based
on the baseline Level-3 schedule and thereafter monitored and updated on monthly basis.
Cash flow projections shall be revised along with any submissions of recovery or re-baseline
schedule submissions when required.

The cash flow shall be based on the forecast payments dates and not the incurred date
(expected achievement date) or on the expected invoiced dates. Planned disbursements for
the cash flow should be broken down into the following categories and included in cash flow
reporting:

• Advance Payments

• Progress Payments (where applicable)

• Milestone Payments

• Advance Payment Amortizations

• Approved Change Orders

• Actual versus Planned payments (Cash Flow)

No unapproved changes shall be included with the cashflow forecast report. Approved
change orders also need to be included in the cash flow reporting, by each change order, as
each will have unique payment terms outside of the current project baseline until such
variations are incorporated into a re-baselined budget.

6.8 Cost Progress Curves

Overall cost progress curves shall be prepared to reflect the actual cost progress versus the
forecast and the project budget. Forecasting helps to see if the future cost progress and
estimate at completion (EAC) is aligned to the Current Control Budget (CCB). In case forecast
curves are not aligned, the Company Cost Engineer shall ensure proper investigation and agree
on a recovery plan or adjustment. The cost progress curves shall be plotted on monthly basis
and shall include as a minimum the following:

• Planned Value (PV), Earned Value (EV), ITD Cost (Inception To date Cost), EAC (Estimate
at Completion),

6.9 Trend Analysis

Trend analysis is used to estimate the Estimate At Completion of the project (EAC). In order to
perform the trend analysis, the following parameters shall be defined:

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 • Estimate To Complete (ETC)

The ETC will be calculated through a detail estimate of the remaining cost for each
CBWS element at a certain cut-off date. In particular, for the FEED / EPC cost we have
the following scenarios:

o Lump Sum Contracts

The ETC will be equal to the remaining % of work to be completed plus the
forecast change orders

o Reimbursable

The ETC is calculated by multiplying the forecast remaining manhours by the

average hour cost

o Unit rate (construction)

The ETC is calculated by multiplying the forecast remaining construction

quantities by the contractual unit rate

• The cost performance index (CPI), a measure of the conformance of the Inception To
date Cost to the earned value:

CPI = EV / ITD Cost

The estimate at completion (EAC) will be then calculated with the following methodologies:

1. EAC = CCB / CPI (If the CPI is expected to be the same for the whole project duration)

2. EAC = AC + ETC (in all other cases)

3. The EAC can be calculated also with the probabilistic methods detailed in paragraph
6.6.2

7.0 Cost Reporting

The Company Cost Engineer shall prepare a project monthly cost report detailed by CWBS
(currency shall be USD). A separate report shall be issued for pre-FID and post-FID cost control.
The information included in the row fields will be depending on the CWBS of the Project. Further
customization on the row field can be done to add specific cost information related to the
project. The project cost report shall contain the following column fields (see Appendix 2):

• Original Budget (BDG)

• Approved Change Orders

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 • Internal Budget transfers

• Current Control Budget (CCB)= Original budget + Internal Transfers + Approved Change
Orders

• This period Commitments

• To Date Commitments

• Balance to Commit

• Planned % Complete

• Actual % Complete

• Planned Value PV = CCB x % planned progress

• Earned Value EV = CCB x % actual progress

• Progress Variance = Actual % progress – Planned % Progress

• Cost Variance = Earned Value – Inception To date Cost = EV - ITD Cost

• ITD Cost = Inception To date Cost = all costs incurred from the start of the project to the
current date (Incurred means the VOWD achieved at a particular point of time)

• Cost Performance index (CPI) = EV/ ITD Cost

• Estimate to Complete (ETC)

• Estimate at Completion (EAC) = ITD Cost + Estimate to Complete (ETC)

• VAC = Variance at Completion = EAC - CCB

• ITD Invoiced = Inception To date Invoiced = all invoiced booked from the start of the
project to the current date

• ITD payments = Inception To date Payments = all payments done from the start of the
project to the current date

8.0 ERP system

The Company ERP system (SAP) shall be used to produce the Project CWBS, budget, change
orders, actual costs, accruals, commitments etc. This section is intended as an overview of
requirements and is for information only. The detailed actual operation of SAP, the Company
ERP system, is described in the SAP Work Instructions.

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 It is essential that the Project CWBS is created immediately to facilitate the establishment of
commitments and early assignment of codes for allocation of actual costs (i.e. ERC Costs or
Vendor / Contractor commitments / expenditures)

8.1 SAP Investment Management Module (SAP IM)

The SAP Investment Management (SAP IM) module in ERP is an overarching Module that enables
Company high level management of investments and capital expenditures. The SAP IM module
contains functions for managing investments in fixed assets. The SAP IM manages investment
plans and annual budgets for "investment programs". The SAP IM Module is organized in
programs. A new project shall be assigned to an existing investment / program once the budget
is approved in the Business Plan (BP) and Position IDs Created in SAP IM Module.

For new mega projects, or a project owned by a JV, a new specific program will be created.

8.2 SAP Project Systems Module (SAP PS)

The SAP Project Systems (SAP PS) module in ERP shall be utilised by the Project Control Cost
engineer to create the CWBS, manage and monitor all aspects of the project cost control. The
Cost WBS of the project is created in this module and according to this structure the project will
manage the budget, change orders, actual costs, accruals etc. The following is required for
establishing the baseline Cost reporting structure:

8.2.1 Creation of Project Cost WBS in SAP (ERP System)

• The initial step and prior to establishing the Project Cost WBS structure, is to obtain the
Parent WBS ID. This information will be available from the F&S Value Partner
• The Cost engineer shall, with the collaboration of the Project team, will set up the CWBS
for the Project
• With the SAP Transaction Code screen name Code “CJ01” the Cost Engineer will create
the 1st node of the Project CWBS
• The Cost Engineer will then create the Parent Child hierarchy using the SAP Transaction
screen name code “CJ02”
• The Cost Engineer will then use the SAP Transaction screen name code “CJ30” Distribute
/ Allocate the original budget (BDG) to the lower CWBS level
• CJ20N is the project builder and can be used for WBS creation as well as modification
8.2.2 PMOC, Reporting, Commitments and Close out in SAP (ERP System)

• Once a Budget Shift is approved the Cost Engineer will utilise the Budget Management,
Transfer using the SAP Transaction screen name code CJ34 to reallocate budgets to
CWBS
• Once a Change order is approved the Cost Engineer will utilise the Budget Management,
Transfer using the SAP Transaction screen name code Supplement - CJ37 to register new
funds under a CWBS facilitated by PMOC
• For reporting the Cost Engineer will utilise the SAP Transaction screen name code CJ13
called Project Reporting Actual Line Items & CJI5 – commitment Line item report”. (Others
are available for more details contact the ERP team).

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 • Lastly and as part of the Project close out, the Cost Engineer should utilise the Budget
Transfer using the SAP Transaction screen name code Return – CJ38. This is to reallocate
any surplus budget back to the Parent WBS. It is essential that this is done before closing
the project if there is surplus available budget
Furthermore, the processes described above are applicable for Projects after SG3. For projects
still in the Assess, Select phases the CWBS will be allocated within each Internal Work Order
created for that Project.

8.3 SAP Material Management Module (SAP MM)

The Materials Management (SAP MM) module is fully integrated with the other modules of the
ERP SAP System. It supports all the phases of the procurement of material and services. This
module is used to create Purchase Requisition (PR) and service entries for the invoices to be paid
(SE) after the relevant approval. For more detailed explanation of how this process is defined we
need to refer to the SAP Work Instructions

9.0 Roles and Responsibilities

The table below defines the responsibilities of selected key project personnel in project cost
control activities. The Cost Engineer under the Control and Planning Team Leader is responsible
for the data gathering process, the preparation and analysis of the cost report and shall ensure
that all cost reports are structured as required by this procedure.

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 Role Responsibility Owns Authors Reviews Approves Updates

Feasibility /
Concept Creates pre-FID budgets
X X
Team (for until SGR3
each stream)
Owns and review the
project cost budget and
BOM X X
reports for projects until
SGR3
Project Owns and review the
Director/ project cost budget and
X X
Manager/ reports after SGR3
Lead
Decision Approve the project cost
Executive (DE) budget X

Contracts / Responsible for Pre and

Procurement Post award Contract /
Administrator Purchase Order
X X
Management. Responsible
for Contract / PO change
Orders
N-4 Controls Reviews the budget
and Planning updates and Company X
cost reports
N-5 Controls Author of the Company
and Planning schedule, provides
necessary information to
X X
Cost engineer and reviews
contractor’s cost
submissions
Cost Engineer Creates the Original
Budget for projects and
X X
updates the Cost report for
issue
Estimator Creates estimates X

Table 3: Roles and Responsibilities

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 Appendix 1: Project Cost Control Process Map

Project Cost Control Process Map

Executive (DE)
Concept Team

SGR Leader &

Engineering

docuemtns /
Feasibility /

Comments
Reponsible Party

Reference
Estimator
Manager
(for each

Decision

Director/
stream)

Project

Team
BOM

Cost
Actions/ Process

1 Pre-FID budget (PIN) Create Pre- Approve

FID budget

2 SGR1
Present Review

3
Update Pre-FID budget
Update Pre-
(Feasibility) FID budget
Approve

4 SGR 2
Present Review

5 Update Pre-FID budget (Concept) Update Pre- Approve

FID budget

6 SGR 3
Present Review

Update Pre-
FID budget
8 Update Pre-FID budget (FEED) Approve /
Close

Create
Create project budget (BDG) Approve Project Provide Class
Budget (BDG) 1 estimate

9 SGR 4 Present Review

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 Appendix 2: Cost Reporting Template

Budget Commitments Progress & Variances Actual Cost Forecast Invoices/Payment

Approve Internal Current
Original This Balance Planned Progress Cost Var
dChange Budget Control To Date Actual % Planned Earned ITD ITD
SAP WBS Description Budget Period to % variance CV ITD Cost CPI ETC EAC VAC
Orders Transfer Budget Commits Complete Value PV Value EV Invoiced Payment
BDG Commits Commit Complete %
CO BT CCB
D=A+B+
A B C E F G=D-F H I J=D*H K=D*I L=I-H M=K-N N O=K/N P Q = P+N R = Q-D S T
C

EPC cost - Package 1

Project management
Engineering
Procurement
Construction
Commissioning
Initial Operations
Milestones
Change order

EPC cost - Package 2

Project management
Engineering
Procurement
Construction
Commissioning
Initial Operations
Milestones
Change order

Owner cost

Company ERC
Travel
PM Consultant
Third Party Inspection
Long Lead Items
Utilities
Land
Finance cost
Legal
Administration
Company studies
Site preparation
Free issue material
Catalyst
Consumables
Training

Contingencies

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 Appendix 3: Example of Cost WBS for Project Budget (pre/post-FID)
Cost WBS Element Cost WBS Description
XX20014 Project
XX20014.01 Pre-FID
XX20014.01.01 FEED
XX20014.01.01.01 Any other item under FEED
XX20014.01.02 Pre FID _ Owner Cost
XX20014.01.02.01 Company ERC
XX20014.01.02.02 Travel
XX20014.01.02.03 PM Consultant
XX20014.01.02.04 Land
XX20014.01.02.05 Finance cost
XX20014.01.02.06 Others …...
XX20014.02 Post FID
XX20014.02.01 EPC
XX20014.02.01.01 EPC _ Package 1
XX20014.02.01.01.01 Project management
XX20014.02.01.01.02 Engineering
XX20014.02.01.01.03 Procurement
XX20014.02.01.01.04 Construction
XX20014.02.01.01.05 Commissioning
XX20014.02.01.01.06 Initial Operations
XX20014.02.01.01.07 Milestones
XX20014.02.01.01.08 Change order
XX20014.02.01.02 EPC _ Package 2
XX20014.02.01.02.01 Project management
XX20014.02.01.02.02 Engineering
XX20014.02.01.02.03 Procurement
XX20014.02.01.02.04 Construction
XX20014.02.01.02.05 Commissioning
XX20014.02.01.02.06 Initial Operations
XX20014.02.01.02.07 Milestones
XX20014.02.01.02.08 Change order
XX20014.02.02 Owner Cost
XX20014.02.02.01 ERC - EPC1
XX20014.02.02.02 ERC - EPC2
XX20014.02.02.03 Travel - EPC1
XX20014.02.02.04 Travel - EPC2
XX20014.02.02.05 PM Consultant
XX20014.02.02.06 Third Party Inspection
XX20014.02.02.07 Long Lead Items (free issue from Company)
XX20014.02.02.08 Utilities
XX20014.02.02.09 Land
XX20014.02.02.10 Finance cost
XX20014.02.02.11 Legal
XX20014.02.02.12 Administration
XX20014.02.02.13 Company studies
XX20014.02.02.14 Site preparation
XX20014.02.02.15 Free issue material
XX20014.02.02.16 Catalyst
XX20014.02.02.17 Consumables
XX20014.02.03 Financing
XX20014.02.03.01 ECA 1
XX20014.02.03.02 ECA 2
XX20014.99 Contingencies

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 Document title

Document number and the revision

User to use this Feedback form to identify any inaccuracy, error or ambiguity to notify the Document
Authority so that appropriate action can be taken. The user is requested to return this page fully
completed, indicating precisely the Proposed Improvement & Justification.

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Definitions
COMM Commitments
BDG Original Project Budget
CCB Current Control Budget
BOM Business Opportunity Manager
BT Internal Budget Transfer
CWBS Cost Work Breakdown Structure
CPI Cost Performance Index
CO Change Orders
CV Cost Variance
COE Centre of Excellence
EAC Estimate at Completion
ERP Enterprise Resource Planning
ETC Estimate to Complete
EVA Earned Value Analysis
ITD Inception To Date
PMOC Project Management of Change
PV Planned Value
SAP Company ERP system
SV Schedule Variance
VOWD Value of Work Done
WBS Work Breakdown Structure

Company means OQ.

Contractor is an entity appointed to execute part of a project under Company’s supervision.
Commitment: Commitment is a cost that the Company has already made and cannot recover by
any means.
Contingency: Amount included in the appropriation breakdown to cover the unforeseen in the
project
Shall denotes a requirement that is mandatory.
Should means something that is recommended but not mandatory

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 DOCUMENT INFORMATION

Title 03.01.05-Project_Cost_Control-Procedure

Document code 2021/03.01.05-Project_Cost_Control-Procedure

Purpose Provide project teams with a methodology and best practice for effective
project cost control

Audience Feasibility / Concept Team, BOM, Project Directors, Project Managers, Project
Leads, finance, contracts and procurement, project technical services, project
team members, consultants

Category Operational

Subcategory Project Procedures

Effective date 30-June-21

Review date

Document Team Leader Project Services, Center Of Excellence

advisor

Approving Leader, Center Of Excellence

authority

03.01.05-Project_Cost_Control-Procedure| June 2021

Page | 21
 RELATED AND SUPPORTING DOCUMENTS

Policy NA

Policy Manual 03.01.01-Project_Management_Framework-Policy Manual

Process NA

Procedures 03.01.01-Stage_Gate_Review-Procedure
03.01.02-Project_Management_of_Change-Procedure
03.01.03-Execution_and_Contracting_Strategy_Procedure_for_Project-
Procedure
03.01.04-Project_Planning_and_Control-Procedure
03.01.05-Project_Cost_Control-Procedure
03.01.07-Scope_Management_and_Control-Procedure
03.01.08-Project_Risk_Management-Procedure
03.01.09-Project_Interface_Management-Procedure
03.01.11-Progress_Monitoring_and_Reporting-Procedure
03.01.13-Project_Handover_and_Close_Procedure_Close_out-Procedure
03.01.15-Cost_Estimating-Procedure
03.01.06-Project_Initiation-Guideline

OPMS Opportunity and Project Management System Policy Manual

03.01.05-Project_Cost_Control-Procedure| June 2021

Page | 22
 DOCUMENT APPROVALS

Authorized Approver Date Signature(s)

Leader, Center Of Excellence 30-June-21

03.01.05-Project_Cost_Control-Procedure| June 2021

Page | 23