sap construction project cost escalation

[Former Member]

Hi Experts,

My current client asking to implement the Project Cost Escalation . Please brief me how to proceed.

Thanks in Advance

Rakesh Ranjan

[former_member230675]

Cost escalation means changes in the cost of specific goods or services in the project for a specific time.

You can get these details by implementing Project Budgeting and Project Progress Analysis.

To know more about Project Budgeting and Project Progress Analysis Please read SAP Help and also search the forum.

[Former Member]

Please guide in the following scenario.

my client is getting project with escalation clause applicable. In this clause the variation in the rates of material or services gets the impact on cost of project . The variation in cost due to change in rate impacts the escalation. The escalation has some short of formullas mutually understood with client, which also includes RBI index and all.

Eg. Estemation has been done for 1000 Ltrs petrol at 50 Rs/ltr in the project. Project will be executed for 5 years. In first year 200 ltrs has been consumed with a rate of 53 Rs/Ltr. Then the extra amount 200 X 3 (this is not the formulla, it is being desided with customer and their client) = 600 will be claimed to client.For this system should record the year wise consumed/work done qty and the variation of rate to generate the claim amount.

The extra amount generated should have to be claimed as escalation value.

[former_member388328]

Hi,

Configure Progress analysis. Where you can capture price variation. Now use a badi or user exit in DIP see that it picks these items in RRB. based on that you can bill the customer.

Thanking you

Vengaiah Chowdary

[former_member230675]

> Eg. Estemation has been done for 1000 Ltrs petrol at 50 Rs/ltr in the project. Project will be executed for 5 years. In first year 200 ltrs has been consumed with a rate of 53 Rs/Ltr. Then the extra amount 200 X 3 (this is not the formulla, it is being desided with customer and their client) = 600 will be claimed to client.For this system should record the  year wise consumed/work done .

If the requirement is for Material then I think it can be easily handled through Material Ledger keeping standard price for all these Items. Please check with your CO consultants about the scope of material ledger.