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Last edited 26 Nov 2021
Cost plans for construction projects
Cost plans are generally prepared by cost consultants (often quantity surveyors). 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 specialist contractors, contractors and suppliers:
- 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).
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 monitored by the cost consultant 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.
- All-in rates.
- Approximate quantities cost plan.
- BCIS elements.
- Bills of quantities.
- Building society.
- Business plan.
- Cash flow statement.
- Common arrangement of work sections.
- Contract sum.
- Contract sum analysis.
- Cost consultant.
- Cost control.
- Cost engineering.
- Cost exercises.
- Cost information.
- Cost management techniques used to monitor the cost of construction projects.
- Cost monitoring.
- Cost of building.
- Cost overruns.
- Cost-benefit analysis in construction.
- Design economics.
- Difference between cost plan and budget.
- Elemental cost plan.
- Final account.
- Forecast period.
- Front-loaded costs.
- Initial cost appraisal.
- Market value.
- New Rules of Measurement.
- Operational unit rate.
- Order of cost estimate.
- Outturn cost.
- Pre-tender estimate.
- Spon's Price Book.
- Stage 2 cost plan.
- Stage 3 cost plan.
- Tender cost.
- Tender pricing document.
- Top down and bottom up estimating.
- Trade credit insurance.
- Whole-life costs.
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