Cost certainty
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.
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.
For contractors, it may mean lower than expected profits as a result of:
- Increases in overheads.
- Hiring more operatives.
- Longer plant-hire periods.
- Storage of materials costs.
- Delayed payments from the client.
Some factors that cause delays and cost overruns may not be the contractor's fault:
- Clients making changes.
- Unforeseen ground conditions.
- Delays in material or equipment supplies.
- Inclement weather.
- Labour disputes.
- Changes in market conditions.
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:
- Poor management.
- The contractors’ inability to predict and control the time needed to complete a project.
- Inaccurate material estimating.
- Poor productivity.
- Inadequate planning.
- Poor site management.
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.
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.
[edit] 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.
Featured articles and news
Future Homes Standard Essentials launched
Future Homes Hub launches new campaign to help the homebuilding sector prepare for the implementation of new building standards.
Building Safety recap February, 2026
Our regular run-down of key building safety related events of the month.
Planning reform: draft NPPF and industry responses.
Last chance to comment on proposed changes to the NPPF.
A Regency palace of colour and sensation. Book review.
Delayed, derailed and devalued
How the UK’s planning crisis is undermining British manufacturing.
How much does it cost to build a house?
A brief run down of key considerations from a London based practice.
The need for a National construction careers campaign
Highlighted by CIOB to cut unemployment, reduce skills gap and deliver on housing and infrastructure ambitions.
AI-Driven automation; reducing time, enhancing compliance
Sustainability; not just compliance but rethinking design, material selection, and the supply chains to support them.
Climate Resilience and Adaptation In the Built Environment
New CIOB Technical Information Sheet by Colin Booth, Professor of Smart and Sustainable Infrastructure.
Turning Enquiries into Profitable Construction Projects
Founder of Develop Coaching and author of Building Your Future; Greg Wilkes shares his insights.
IHBC Signpost: Poetry from concrete
Scotland’s fascinating historic concrete and brutalist architecture with the Engine Shed.
Demonstrating that apprenticeships work for business, people and Scotland’s economy.
Scottish parents prioritise construction and apprenticeships
CIOB data released for Scottish Apprenticeship Week shows construction as top potential career path.
From a Green to a White Paper and the proposal of a General Safety Requirement for construction products.
Creativity, conservation and craft at Barley Studio. Book review.
The challenge as PFI agreements come to an end
How construction deals with inherited assets built under long-term contracts.
Skills plan for engineering and building services
Comprehensive industry report highlights persistent skills challenges across the sector.
Choosing the right design team for a D&B Contract
An architect explains the nature and needs of working within this common procurement route.
Statement from the Interim Chief Construction Advisor
Thouria Istephan; Architect and inquiry panel member outlines ongoing work, priorities and next steps.