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CONSTRUCTIONCOSTCONTROLTHESISABSTRACTThisthesisstudiesthemethodsfollowedbythebuildingconstructioncontractorsintheEasternProvinceofSaudiArabiatocontroltheprojectcostaswellasthefactorsthataffectthelevelofcontrolexertedduringconstruction.Thisstudywasconductedbyseriesofstructuredinterviewswithfortyfiverandomlyselectedcontractors.Resultsofthisstudywerepost-stratifiedaccordingtothefivecontractorsgradesspecifiedbytheAgencyofClassificationofContractorsinRiyadh.ItwasfoundthatthecontractorsintheEasternProvincefollowabasiclogicsequenceincostcontrol.First,theystartbysettingtherequiredbudgetasfollows:A)Projectestimatesareeitherverygeneralandsimpleorbasedonunrealisticassumptions.B)Soilreportsformthemainsourceofsiteanalysis.C)Workbreakdownstructureisbasedonstandarditemheadingspredefinedatheadoffice.D)Contractorsare-unfamiliarwiththeconceptofcostcodes.E)Aperiodbetween1-4weeksismostcommonforshorttermplanning.Second,theymeasureandreportactualcostsasfollows:A)Chargingresourceshoursisbasedonpersonalobservations.B)Purchaseordersandinvoicesaremainlyusedtochargematerialconsumed.C)Systematicproceduresforsitefeedbackarelacking.D)Monthlycoststatementsarethemostcommontoolforcoststatusreporting.Third,costvariancetestingisbasedoncomparingthebudgetedvs.theactualcostofworkdonetodate.Finally,thecause(s)ofcostvarianceisinvestigatedbyinformalmethodsandincentivesform-themostpopularcorrectiveaction.Regardingthefactorsthataffectthelevelofcontrol,CompanyCharacteristics,ProjectCharacteristicsandProjectDocumentsarethemostinfluential.Ontheotherhand,CompanyCharacteristicsisthemostdiscriminatingfactoramongthefivecontractorsgrades.INTRODUCTIONOneofthemainobjectivesforanycontractorenteringanyconstructioncontractistorealizeanacceptablereturnonhisinvestment.Oneoftheinitialstepsinthecontractualprocessispreparingaprojectestimate.However,agoodestimateisnotenoughtoachievesuchadesiredreturn.Becauseofthedynamicnatureoftheconstructionindustry,andinorderfortheprojecttobeprofitable,afirmcontrolofresourcesduringconstructionshouldbeapplied.Realizingthisfact,almostallcontractorsapply-eitherexplicitlyorimplicitly-somesortofasystemtocontroltheirprojectcosts.Nowadays,becauseoftheincreasingcomplexityandthenewtechnologicaladvancesachievedintheconstructionindustry,differentsystemsandtechniqueshavebeendevelopedandapplied.Suchsystems,eithermanualorcomputerized,weredevelopedbythecontractors.However,sincesomeofthebigcompaniesbuildtheirownbuildingsbythemselves,theydevoteagreatdealoftimeandmoneytodevelopcostcontrolsystemsspeciallytailoredtotheirprojects.THECOSTCONTROLSYSTEM:Foranyprojecttobesuccessfullyconstructedthreephasesareconsidered;PLANNING,EXECUTINGANDCONTROL.Duringthecontrolphasethreeinterdependentparametersareusuallycontrolled;cost,scheduleandperformance.Highercostusuallybuysbetterperformance.Costandtimearerelatedinamorecomplexway,whereextramoneyispaidtocompensatefortimeoverun.Sotherelativeimportanceplacedoneachoftheseparametershasanoticeableeffectondecisionsrelatedtoconstructioncostcontrol,speciallywhencostoverrunisexperienced.Fromtheaboveitcanbeconcludedthatcostcontrolformsasubsetoftheprojectcontrolsystem.Costcontrolcanbedefinedastheprocessofachievingacostobjectiveoftheprojectconstruction.Thiscostobjectiveformsthebaselinethatiscomparedwiththeactualcostfortimelydecisions.Thebasiccomponentsofthecontrolsystemare:1.Progressmeasurement.2.Creatingastandardforcomparison.3.DataAnalysis.4.Reportingsystem.5.Correctiveactions.Insmallprojects,itispossibletoshortenthepathfromstep2tostep9andprovidedirectfeedback.PROBLEMSTATEMENT:Thisresearchisdirectedtowardansweringthefollowingquestions:1)WhatmethodsdoSaudiconstructioncontractorsutilizetocontrolprojectcost?2)Whydotheyusethesespecificmethods?Whataretheiradvantagesanddisadvantagesandhoweffectivearethey?3)WhatfactorsinfluencethelevelofcontrolinaconstructionprojectinSaudiArabia?4)Whatistheranking(relativeimportance)ofeachoftheabovefactors?SIGNIFICANCEOFTHESTUDY:Asaresultoftheconstructionboomexperiencedintheseventiesandearlyeighties,theconstructionindustryinSaudiArabiawascharacterizedbygreatdemandplacedoncontractorsservices.Duetotheavailabilityofprojectsaswellasgenerousgovernmentalgrantsatthattime,costcontrolwasofminorinteresttothecontractor.Nowadays,however,thesituationisdifferent.Recently,theeconomicalsituationhasbeencharacterizedbylimitedbudgetswhichhavereducedthenumberofconstructionprojects.Becauseofthegreatnumberofcontractorsandthesmallnumberofprojectsavailable,competitivebiddinghasstartedtoplayanimportantroleinprojectsawarding.Consequently,itisexpectedthecontractorshavestartedtopaymoreattentiontoconstructioncostsaswellastoimplementsoundcostcontrolsystemstoachievetheirprofittargets.InspiteoftheimportantrolecostcontrolplaysintheSaudiconstructionindustry,nopublishedstudyexploredthemethodsbeingutilizedbySaudicontractorstocontrolthecostoftheirconstructionprojects.Duetothislackofknowledge,aneedexiststoidentifythesemethods.Thedegreeofcostcontrolmayvaryfromoneprojecttoanother.Sometimescontractorstendtoexertfirmcostcontrolinsomeprojectsw