Target cost for construction - Revision history

Editor at 07:18, 15 September 2025

2025-09-15T07:18:59Z

← Older revision		Revision as of 07:18, 15 September 2025
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	Target costs might be set for the overall project, or for specific elements of the works. Agreeing the target cost requires that the client has sufficient knowledge and experience to be able to accurately estimate the likely cost of the works and to negotiate effectively with the contractor and sometimes the consultant team.		Target costs might be set for the overall project, or for specific elements of the works. Agreeing the target cost requires that the client has sufficient knowledge and experience to be able to accurately estimate the likely cost of the works and to negotiate effectively with the contractor and sometimes the consultant team.

−	Examples of target cost contracts include the New Engineering Contract (NEC) Engineering and Construction Contracts Option C: Target contract with activity schedule and Option D: Target contract with bill of quantities.	+	Examples of target cost contracts include the New Engineering Contract (NEC) Engineering and Construction Contracts Option C: Target contract with activity schedule and Option D: Target contract with bill of quantities. Also the J[https://corporate.jctltd.co.uk/target-cost-contract-hub/ CT Target Cost Contract], a new contract family introduced with the JCT 2024 Edition. It includes a Main Contract (TCC 2024), Sub-Contract (comprising the Sub-Contract Agreement (TCCSub/A 2024) and Conditions (TCCSub/C 2024)), and a Guide for both the Main Contract (TCC/G 2024) and Sub-Contract (TCC Sub/G 2024).

	NB: According to NRM2: Detailed measurement for building works, in the context of bills of quantities, the term ‘cost target' means; '...the total expenditure for an element or<br />		NB: According to NRM2: Detailed measurement for building works, in the context of bills of quantities, the term ‘cost target' means; '...the total expenditure for an element or<br />

Designing Buildings at 10:50, 30 October 2023

2023-10-30T10:50:21Z

← Older revision		Revision as of 10:50, 30 October 2023
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	work package.'		work package.'

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Related articles on Designing Buildings =

	* Bill of quantities.		* Bill of quantities.

Designing Buildings at 10:32, 2 September 2020

2020-09-02T10:32:17Z

← Older revision		Revision as of 10:32, 2 September 2020
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	* [http://www.amazon.com/On-target-design-manage-procurement/dp/0727716468 On Target, David Trench, Thomas Telford Ltd 1992].		* [http://www.amazon.com/On-target-design-manage-procurement/dp/0727716468 On Target, David Trench, Thomas Telford Ltd 1992].

−	[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Designing Buildings at 13:37, 4 February 2020

2020-02-04T13:37:13Z

← Older revision		Revision as of 13:37, 4 February 2020
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	work package.'		work package.'

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Bill of quantities.		* Bill of quantities.
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	* Target contract.		* Target contract.

−	=== External references ===	+	= External references =

	* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Contractors and Consultants].		* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Contractors and Consultants].

Designing Buildings: Reverted edits by 84.51.32.194 (talk) to last revision by Editor

2019-08-23T12:54:05Z

Reverted edits by 84.51.32.194 (talk) to last revision by Editor

← Older revision		Revision as of 12:54, 23 August 2019
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	* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Contractors and Consultants].		* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Contractors and Consultants].
	* [http://www.amazon.com/On-target-design-manage-procurement/dp/0727716468 On Target, David Trench, Thomas Telford Ltd 1992].		* [http://www.amazon.com/On-target-design-manage-procurement/dp/0727716468 On Target, David Trench, Thomas Telford Ltd 1992].
−	* [https://www.projectcubicle.com/cost-estimation-methods-project-management/ Cost Estimation Methods]

	[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]		[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

84.51.32.194 at 12:35, 23 August 2019

2019-08-23T12:35:12Z

← Older revision		Revision as of 12:35, 23 August 2019
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	* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Contractors and Consultants].		* PACE [http://webarchive.nationalarchives.gov.uk/20100503135839/http://www.ogc.gov.uk/documents/PACE_-_GACC.pdf Guidance on the Appointment of Contractors and Consultants].
	* [http://www.amazon.com/On-target-design-manage-procurement/dp/0727716468 On Target, David Trench, Thomas Telford Ltd 1992].		* [http://www.amazon.com/On-target-design-manage-procurement/dp/0727716468 On Target, David Trench, Thomas Telford Ltd 1992].
		+	* [https://www.projectcubicle.com/cost-estimation-methods-project-management/ Cost Estimation Methods]

	[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]		[[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]]

Editor at 15:58, 7 August 2018

2018-08-07T15:58:08Z

← Older revision		Revision as of 15:58, 7 August 2018
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	* Contract condition.		* Contract condition.
	* Contract sum.		* Contract sum.
		+	* Cost overruns.
	* Cost-reimbursable contract.		* Cost-reimbursable contract.
	* Disallowed cost.		* Disallowed cost.

Editor at 14:10, 7 August 2018

2018-08-07T14:10:49Z

← Older revision		Revision as of 14:10, 7 August 2018
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	Target costs are generally associated with cost-reimbursable contracts. They introduce a mechanism enabling the contractor, and sometimes the consultant team, to share in the benefits of cost savings, but also to bear some of the client's cost when there are cost overruns. Contracting the contractor and the consultant team on a target cost basis can be an effective way of ensuring good collaboration.		Target costs are generally associated with cost-reimbursable contracts. They introduce a mechanism enabling the contractor, and sometimes the consultant team, to share in the benefits of cost savings, but also to bear some of the client's cost when there are cost overruns. Contracting the contractor and the consultant team on a target cost basis can be an effective way of ensuring good collaboration.

−	The target cost is set early in the project, and then cost savings or ~~over-runs~~ are shared based on an agreed formula. The aim is to provide a financial incentive encouraging cost control, rather than to penalise. Bonus and penalty payments are usually capped to prevent over-zealous or adversarial behaviour.	+	The target cost is set early in the project, and then cost savings or overruns are shared based on an agreed formula. The aim is to provide a financial incentive encouraging cost control, rather than to penalise. Bonus and penalty payments are usually capped to prevent over-zealous or adversarial behaviour.

	Target costs might be set for the overall project, or for specific elements of the works. Agreeing the target cost requires that the client has sufficient knowledge and experience to be able to accurately estimate the likely cost of the works and to negotiate effectively with the contractor and sometimes the consultant team.		Target costs might be set for the overall project, or for specific elements of the works. Agreeing the target cost requires that the client has sufficient knowledge and experience to be able to accurately estimate the likely cost of the works and to negotiate effectively with the contractor and sometimes the consultant team.
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	Examples of target cost contracts include the New Engineering Contract (NEC) Engineering and Construction Contracts Option C: Target contract with activity schedule and Option D: Target contract with bill of quantities.		Examples of target cost contracts include the New Engineering Contract (NEC) Engineering and Construction Contracts Option C: Target contract with activity schedule and Option D: Target contract with bill of quantities.

−	NB~~, according~~ to NRM2: Detailed measurement for building works, in the context of bills of quantities, the term ‘cost target' means; '...the total expenditure for an element or<br />	+	NB: According to NRM2: Detailed measurement for building works, in the context of bills of quantities, the term ‘cost target' means; '...the total expenditure for an element or<br />
	work package.'		work package.'

Designing Buildings at 07:42, 22 May 2018

2018-05-22T07:42:24Z

← Older revision		Revision as of 07:42, 22 May 2018
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	Examples of target cost contracts include the New Engineering Contract (NEC) Engineering and Construction Contracts Option C: Target contract with activity schedule and Option D: Target contract with bill of quantities.		Examples of target cost contracts include the New Engineering Contract (NEC) Engineering and Construction Contracts Option C: Target contract with activity schedule and Option D: Target contract with bill of quantities.
		+
		+	NB, according to NRM2: Detailed measurement for building works, in the context of bills of quantities, the term ‘cost target' means; '...the total expenditure for an element or<br />
		+	work package.'

	= Find out more =		= Find out more =

Editor: Reverted edits by 58.177.19.234 (talk) to last revision by Editor

2018-03-29T09:54:28Z

Reverted edits by 58.177.19.234 (talk) to last revision by Editor

← Older revision		Revision as of 09:54, 29 March 2018
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−	Target costs are generally ~~associate~~ with cost-reimbursable contracts. They introduce a mechanism enabling the contractor, and sometimes the consultant team, to share in the benefits of cost savings, but also to bear some of the client's cost when there are cost overruns. Contracting the contractor and the consultant team on a target cost basis can be an effective way of ensuring good collaboration.	+	Target costs are generally associated with cost-reimbursable contracts. They introduce a mechanism enabling the contractor, and sometimes the consultant team, to share in the benefits of cost savings, but also to bear some of the client's cost when there are cost overruns. Contracting the contractor and the consultant team on a target cost basis can be an effective way of ensuring good collaboration.

	The target cost is set early in the project, and then cost savings or over-runs are shared based on an agreed formula. The aim is to provide a financial incentive encouraging cost control, rather than to penalise. Bonus and penalty payments are usually capped to prevent over-zealous or adversarial behaviour.		The target cost is set early in the project, and then cost savings or over-runs are shared based on an agreed formula. The aim is to provide a financial incentive encouraging cost control, rather than to penalise. Bonus and penalty payments are usually capped to prevent over-zealous or adversarial behaviour.