Cost plans for construction projects

[edit] What are cost plans?

Cost plans are generally prepared by cost consultants (often quantity surveyors), and provide a snapshot of the likely costs associated with construction works. They evolve through the life of the project, developing in detail and accuracy as more information becomes available about the nature of the design, and then actual prices are provided by suppliers.

[edit] What are the different types of cost plan?

Starting with initial appraisals at the beginning of a project and evolving through to the final account, the range of types of cost plan that might be prepared on a project include:

• Initial cost appraisal (studies of options prepared during the feasibility study stage).
• Elemental cost plan (prepared during the project brief stage and carried through to detailed design).
• Approximate quantities cost plan (from the end of detailed design through to tender).
• Pre-tender estimate (prepared alongside tender documentation).
• Tender pricing document (strictly speaking this is not a priced document, but is part of the tender documentation issued to the contractor for pricing).
• Contract sum (agreed with the contractor during the tender period and adjusted during the construction period).
• Contract sum analysis (a break down of the contract sum prepared by the contractor on design and build projects).
• Final account (agreed during the defects liability period).

[edit] What is included in cost plans?

Other than initial cost appraisals, these all relate to the construction cost of the project (rather than wider project costs that the client might incur, which could include fees, equipment costs, furniture, the cost of moving staff, contracts outside of the main works, and so on). It is important that the client makes clear what costs should be included in cost plans and what will remain within the control of the client organisation.

Initial cost appraisals are carried out without the benefit of a design for the project. They include client costs that may not feature in later cost plans and as a result will almost certainly need input from the client's finance director or financial advisers.

Once the initial cost appraisal is completed, the client will decide the scope of costs that will in future be monitored by the cost consultant and those that will be monitored and controlled by the client organisation.

Cost plans, and the elemental and approximate quantities that underpin them, are generally prepared with reference to the New Rules of Measurement (NRM), published by the Royal Institution of Chartered Surveyors (RICS). The NRM suite was reissued by RICS as practice information in October 2022, incorporating a 2021 update, and RICS has confirmed that earlier editions are now out of date.

[edit] Sources of other information about cost plans

Articles about cost plans and cost control on Designing Buildings include:

• Approximate quantities cost plan.
• Bills of quantities.
• Budget.
• Business plan.
• Cash flow.
• Contract sum.
• Contract sum analysis.
• Cost consultant.
• Cost control.
• Cost engineering.
• Cost monitoring.
• Cost of building.
• Cross estimating method.
• Elemental cost plan.
• Estimate.
• Final account.
• Initial cost appraisal.
• Measurement.
• New Rules of Measurement.
• Order of cost estimate.
• Outturn cost.
• Pre-tender estimate.
• Stage 2 cost plan.
• Stage 3 cost plan.
• Tender cost.
• Tender pricing document.
• Whole-life costs.

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