Last edited 22 Oct 2018

Cost information

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In the construction industry the term ‘cost’ generally refers to the amount that has to (or will have to) be paid to receive goods or services. Different types of cost include capital costs, construction costs, operational costs, whole-life costs, environmental costs, social costs and so on.

Cost information is an important element across several activities that are involved in cost engineering (the practice of managing costs involved on a construction project), such as cost control, budgeting, forecasting, estimating, investment appraisal and risk analysis. It is also used to help measure profit margins, value assets and make decisions.

The type of cost information will depend on the particular type of costs that are being managed.

In relation to construction costs, cost information can be used to help set prices, which are typically the actual cost plus a percentage to allow for profit.

In the context of estimating construction or capital costs, cost information should be aligned with the project budget and can be set out in cost plans. These are generally prepared by cost consultants (often quantity surveyors) and 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 specialist contractors, contractors and suppliers.

Types of cost plan include:

For more information see: Cost plan.

Cost reporting is the process of providing a client (or other party) with information about the magnitude of a project’s predicted, or actual cost. This can be expressed either in absolute terms or as a variance compared to the project budget. Cost reports are typically prepared by a cost consultant (such as a quantity surveyor) and updated regularly (perhaps monthly), to keep the client informed and to help them and the project team control costs.

BCIS is the Building Cost Information Service of the Royal Institution of Chartered Surveyors (RICS). Cost and price information is collected by BCIS from across the UK construction industry, then collated, analysed, modelled, interpreted and made available to the industry to facilitate accurate cost planning.

For more information see: BCIS

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