An important concern facing the construction industry today is rising engineering and construction costs. Our mission is to perform contract auditing services and assist companies in controlling these capital costs. Our Contract Audit Group (APG Construction Services, Inc.) has many things to offer. First, we provide ongoing project administration and monthly reporting of cost savings and potential recoveries. We recommend incentives to reduce contractor costs so you don’t leave money on the table. Next, early involvement helps to ensure costs are controlled and alternative solutions are considered throughout all project phases. We also conduct follow-up audits to ensure compliance with recommendations previously identified.

We provide a local, core team of experts who focus on the best practices within the industry versus past practices. We can also provide a risk assessment model individualized to your company’s criteria and focus the audit approach for each project. Our long-term strategy is to provide contract auditing expertise to enhance the following things: capital cost savings for your company; efficiency and effectiveness of contracted projects; process by providing expert and objective recommendations and innovative solutions; identification of potential risk areas; and finally, your criteria for doing business with contractors. In the past, contract audits were performed 100% of the time by internal auditors for contract compliance. Presently, approximately 10% of audits conducted are out-sourced providing companies with cost savings and recoveries. In the future, approximately 42% of audits will be out-sourced.

To provide cost savings, we will audit for non-compliance with contracts. We will focus on Cost Plus (time and materials) contracts, including maintenance contracts. Fixed bid addendums and riders where scope changes and change orders are incurred will also be audited. Project Cost Control (billing based upon estimates versus actual usage or incorrect conversion factors) is an important consideration. Constant comparison of construction costs to the project budget ensures that the Owner is not overcharged or faced with costly overruns.

Some potential cost savings areas are: labor rates billed at a higher classification than actually paid, overcharging of payroll expenses – taxes, insurance, and benefits; overcharging on rental equipment, trucks, small tools, and other machinery; and sales tax charged on exempt items.