Cost certainty - Revision history

Designing Buildings at 08:41, 31 December 2020

2020-12-31T08:41:38Z

← Older revision		Revision as of 08:41, 31 December 2020
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	* Whole life cost.		* Whole life cost.

−	[[Category:Cost_/_business_planning]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Cost_/_business_planning]]

Editor: Reverted edits by 137.195.110.234 (talk) to last revision by Designing Buildings

2020-10-23T11:36:51Z

Reverted edits by 137.195.110.234 (talk) to last revision by Designing Buildings

← Older revision		Revision as of 11:36, 23 October 2020
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−	~~Clients~~ and contractors in the construction industry, cost certainty is one of the most important performance criteria. It has a direct impact on resources.	+	For clients and contractors in the construction industry, cost certainty is one of the most important performance criteria. It has a direct impact on resources.

	Cost certainty is the likelihood that before a project, or part of a project starts, it will be completed within the agreed budget. Cost certainty is affected by time certainty which is the likelihood that a project, or part of a project, will be completed within the agreed time period agreed.		Cost certainty is the likelihood that before a project, or part of a project starts, it will be completed within the agreed budget. Cost certainty is affected by time certainty which is the likelihood that a project, or part of a project, will be completed within the agreed time period agreed.
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	* Whole life cost.		* Whole life cost.

−	~~[[Category:Conservation]]~~ [[Category:Cost_/_business_planning]]	+	[[Category:Cost_/_business_planning]]

137.195.110.234 at 10:52, 23 October 2020

2020-10-23T10:52:14Z

← Older revision		Revision as of 10:52, 23 October 2020
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−	~~For clients~~ and contractors in the construction industry, cost certainty is one of the most important performance criteria. It has a direct impact on resources.	+	Clients and contractors in the construction industry, cost certainty is one of the most important performance criteria. It has a direct impact on resources.

	Cost certainty is the likelihood that before a project, or part of a project starts, it will be completed within the agreed budget. Cost certainty is affected by time certainty which is the likelihood that a project, or part of a project, will be completed within the agreed time period agreed.		Cost certainty is the likelihood that before a project, or part of a project starts, it will be completed within the agreed budget. Cost certainty is affected by time certainty which is the likelihood that a project, or part of a project, will be completed within the agreed time period agreed.
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	* Whole life cost.		* Whole life cost.

−	[[Category:Cost_/_business_planning]]	+	[[Category:Conservation]] [[Category:Cost_/_business_planning]]

Designing Buildings at 12:10, 26 July 2019

2019-07-26T12:10:16Z

← Older revision		Revision as of 12:10, 26 July 2019
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	For clients and contractors in the construction industry, cost certainty is one of the most important performance criteria. It has a direct impact on resources.		For clients and contractors in the construction industry, cost certainty is one of the most important performance criteria. It has a direct impact on resources.

−	Cost certainty is the likelihood that before a project starts, it will be completed within the budget ~~agreed between the client and the contractor~~. Cost certainty is affected by time certainty which is the likelihood that a project will be completed within the time period agreed at the outset between the client and the contractor. Construction clients hold these two concepts as their top priorities as delays and cost overruns may lead to higher costs for the client and a possible diminished relationship between client and contractor. For contractors, it may mean lower than expected profits and a dent in their reputation leading to a possible reduction in competitiveness.	+	Cost certainty is the likelihood that before a project, or part of a project starts, it will be completed within the agreed budget. Cost certainty is affected by time certainty which is the likelihood that a project, or part of a project, will be completed within the agreed time period agreed.

−	~~Many construction projects are high-risk undertakings which very frequently generate time~~ and cost overruns. ~~Typical factors~~ that ~~can~~ hold up a ~~project and are usually considered outside the control of contractors can include:~~	+	Construction clients often hold these two concepts as their top priorities as delays and cost overruns can be disastrous. It is for this reason that clients will tend to hold a contingency fund to deal with unforeseen eventualities.

−	* Clients making sudden changes and introducing variations	+	For contractors, it may mean lower than expected profits as a result of:
−	* Unforeseen ground conditions	+
−	* Delays in material supply	+
−	* Inclement weather	+
−	* Labour disputes	+
−	* Changes in market conditions	+

−	~~Yet a 1996 study by the Construction Industry Board (CIB) revealed that cost certainty (and also time certainty) is~~ more ~~often than not likely to be under~~ the ~~contractor’s control~~. ~~This is mainly because cost overruns are frequently seen to be:~~	+	* Increases in overheads.
		+	* Hiring more operatives.
		+	* Longer plant-hire periods.
		+	* Storage of materials costs.
		+	* Delayed payments from the client.

−	* Symptomatic of poor management	+	Some factors that cause delays and cost overruns may not be the contractor's fault:
−	* The contractors’ inability to predict and ~~control~~ the ~~time needed to complete a project.~~	+
−	* Inaccurate material estimating	+
−	* Poor labour productivity	+
−	* Inadequate planning	+
−	* Poor site management	+
−	* Longer periods of on-site annual leave	+

−	~~Cost certainty is of major importance to both clients and contractors but it is the latter group who are exposed to more risks~~. ~~If delays occur on a project, contractors are impacted almost immediately by additional costs resulting from:~~	+	* Clients making changes.
		+	* Unforeseen ground conditions.
		+	* Delays in material or equipment supplies.
		+	* Inclement weather.
		+	* Labour disputes.
		+	* Changes in market conditions.

−	* ~~Increases in overheads~~	+	However, a 1996 study by the Construction Industry Board (CIB) revealed that cost and time certainty is more often than not under the contractor’s control, resulting from:
−	* ~~Hiring more operatives~~	+
−	* ~~Longer plant-hire periods~~	+	* Poor management.
−	* ~~Storage of materials costs~~	+	* The contractors’ inability to predict and control the time needed to complete a project.
−	* ~~Delayed payments from the client~~	+	* Inaccurate material estimating.
		+	* Poor productivity.
		+	* Inadequate planning.
		+	* Poor site management.

−	~~Cost certainty is crucial to clients: they~~ will tend to have more confidence in contractors who have a solid record of reliability when it comes to cost certainty and so are likely to rate highly.	+	Clients will tend to have more confidence in contractors who have a solid record of reliability when it comes to cost certainty and so are likely to rate highly.

−	~~It is in the nature of the construction process~~ to ~~generate cost overruns on~~ a ~~high percentage of projects. Given this state of affairs~~, ~~it is in contractors’ interests to focus~~ as ~~much as possible on costs~~ and their ~~control~~ and ~~so ensure projects remain on time and to budget~~.	+	Cost certainty tends to improve as a project progresses, as some of the works are complete, and so their actual cost is known, and some risks may have been avoided or mitigated. It is for this reason that the client may reduce the amount they hold as contingency as the project proceeds.

	= Related articles on Designing Buildings Wiki =		= Related articles on Designing Buildings Wiki =

Editor: Created page with "For clients and contractors in the construction industry, cost certainty is one of the most important performance criteria. It has a direct impact on resources. Cost certainty i..."

2019-07-17T16:31:42Z

Created page with "For clients and contractors in the construction industry, cost certainty is one of the most important performance criteria. It has a direct impact on resources. Cost certainty i..."

New page

For clients and contractors in the construction industry, cost certainty is one of the most important performance criteria. It has a direct impact on resources.

Cost certainty is the likelihood that before a project starts, it will be completed within the budget agreed between the client and the contractor. Cost certainty is affected by time certainty which is the likelihood that a project will be completed within the time period agreed at the outset between the client and the contractor. Construction clients hold these two concepts as their top priorities as delays and cost overruns may lead to higher costs for the client and a possible diminished relationship between client and contractor. For contractors, it may mean lower than expected profits and a dent in their reputation leading to a possible reduction in competitiveness.

Many construction projects are high-risk undertakings which very frequently generate time and cost overruns. Typical factors that can hold up a project and are usually considered outside the control of contractors can include:

* Clients making sudden changes and introducing variations
* Unforeseen ground conditions
* Delays in material supply
* Inclement weather
* Labour disputes
* Changes in market conditions

Yet a 1996 study by the Construction Industry Board (CIB) revealed that cost certainty (and also time certainty) is more often than not likely to be under the contractor’s control. This is mainly because cost overruns are frequently seen to be:

* Symptomatic of poor management
* The contractors’ inability to predict and control the time needed to complete a project.
* Inaccurate material estimating
* Poor labour productivity
* Inadequate planning
* Poor site management
* Longer periods of on-site annual leave

Cost certainty is of major importance to both clients and contractors but it is the latter group who are exposed to more risks. If delays occur on a project, contractors are impacted almost immediately by additional costs resulting from:

* Increases in overheads
* Hiring more operatives
* Longer plant-hire periods
* Storage of materials costs
* Delayed payments from the client

Cost certainty is crucial to clients: they will tend to have more confidence in contractors who have a solid record of reliability when it comes to cost certainty and so are likely to rate highly.

It is in the nature of the construction process to generate cost overruns on a high percentage of projects. Given this state of affairs, it is in contractors’ interests to focus as much as possible on costs and their control and so ensure projects remain on time and to budget.

= Related articles on Designing Buildings Wiki =

* Budget.
* Capital costs.
* Construction costs.
* Construction price and cost indices.
* Cost-benefit analysis in construction.
* Cost control.
* Cost engineering.
* Cost information.
* Cost of building.
* Cost overruns.
* Cost plans.
* Cost vs price.
* Front-loaded costs.
* Estimate.
* Hard costs v soft costs.
* Irrelevant cost.
* Life cycle assessment.
* New Rules of Measurement.
* Operational costs.
* Other development/project costs.
* Quantity surveyor / Cost consultant.
* Relevant cost.
* Whole life cost.

[[Category:Cost_/_business_planning]]