Emerging cost contract
|
Emerging cost (Time and Materials (T&M)) contracts are most commonly used for rail infrastructure projects.
They are essentially cost reimbursable management contracts for a programme of works and services where the management contractor is paid direct costs identified in an 'estimate of project costs'. They provide for sophisticated management services along with sub-contracting the construction of the works.
However, while there may be target costs and schedules of rates for individual items of the programme of works, with associated incentives and penalties, there is no overall target cost. This means that the final value of the contract may not be known until the contract is complete. This can be useful where setting an overall target cost would restrict the client’s ability to vary the scope of works.
This means the client is accepting many of the financial risks of the project, and must have the expertise and appropriate controls to manage those risks.
Emerging cost contracts provide for value engineering and for the right to terminate if the cost estimate reaches an agreed percentage above the original estimate.
Emerging cost contracts are often applied over a defined period of time. The longer this period of time, the more consideration the contractor is likely to give to long-term performance issues in design and workmanship.
[edit] Related articles on Designing Buildings Wiki
Featured articles and news
Government outcome to the late payment consultation, ECA reacts.
IHBC 2025 Gus Astley Student Award winners
Work on the role of hewing in UK historic conservation a win for Jack Parker of Oxford Brookes University.
Future Homes Building Standards and plug-in solar
Parts F and L amendments, the availability of solar panels and industry responses.
How later living housing can help solve the housing crisis
Unlocking homes, unlocking lives.
Preparing safety case reports for HRBs under the BSA
A new practical guide to preparing structural inputs for safety cases and safety case reports published by IStructE.
Male construction workers and prostate cancer
CIOB and Prostate Cancer UK encourage awareness of prostate cancer risks, and what to do about it.
The changed R&D tax landscape for Architects
Specialist gives a recap on tax changes for Research and Development, via the ACA newsletter.
Structured product data as a competitive advantage
NBS explain why accessible product data that works across digital systems is key.
Welsh retrofit workforce assessment
Welsh Government report confirms Wales faces major electrical skills shortage, warns ECA.
A now architectural practice looks back at its concept project for a sustainable oceanic settlement 25 years on.
Copyright and Artificial Intelligence
Government report and back track on copyright opt out for AI training but no clear preferred alternative as yet.
Embedding AI tools into architectural education
Beyond the render: LMU share how student led research is shaping the future of visualisation workflows.
Why document control still fails UK construction projects
A Chartered Quantity Surveyor explains what needs to change and how.
Inspiration for a new 2026 wave of Irish construction professionals.
New planning reforms and Warm Homes Bill
Take centre stage at UK Construction Week London.
A brief run down of changes intentions from April in an onwards.