Outturn cost
The term ‘outturn’ or ‘out-turn’ refers to an amount achieved in a certain time, for example, an actual amount produced, or actual sales made. This is in contrast with the amount that might have been predicted or estimated. It is thought to be derived from, or related to, the term ‘turn out’.
The ‘outturn cost’ or ‘out-turn cost’ of a project is its actual construction cost. Generally this refers to the actual, total construction cost calculated at the end of the project, but it may also refer to the cost of a specific contract, or to costs incurred over a defined period. This contrasts with cost estimates, or target costs, which are calculations of the cost that is expected, or the cost that should be achieved.
This meaning of outturn cost is slightly confused by the use of terms such as ‘forecast outturn cost’, ‘estimated outturn cost’ or ‘target outturn cost’ which refer to the cost that is anticipated or should be achieved at the end of the project.
According to the Royal Institution of Chartered Surveyors (RICS), these outturn cost comprises: fixed costs, variable costs, variations, fluctuations and risk allowances.
- Fixed costs are costs that have been pre-calculated and agreed to be paid.
- Variable costs include; provisional sums, provisional quantities, prime cost sums and daywork allowances.
- Variations are alterations in the form of additions, substitutions or omissions from the original scope of works.
- Fluctuations are a way of dealing with inflation on large projects that may last for several years. The contractor is asked to tender based on current prices (prices at an agreed base date) and they are then reimbursed for price changes to specified items over the duration of the project (a fluctuating price).
- Risk allowances are financial allowances for works or services that are unknown in terms of quantity and specification, and are the client’s risk.
Cost prediction, Professional Statement, 1st edition, published in November 2020 by the Royal Institution of Chartered Surveyors (RICS), defines out-turn cost (‘final account’, ‘actual cost’ or ‘cost outcome’) as: ‘The known cost at the end of a project. Generally, it refers to the actual, total construction cost calculated at the end of the project, which includes the effects of any changes made to the design and the impact of any disruption. It may also refer to the costs incurred over a defined period, such as in life cycle cost.’
See also: Final account.
[edit] Related articles on Designing Buildings
- Balance sheet.
- Bill of quantities BOQ.
- Budget.
- Capital costs for construction projects.
- Construction costs.
- Contract conditions.
- Contract sum.
- Cost plans for construction projects.
- Cost reporting.
- Cost Value Reconciliations (CVR).
- Disallowed cost.
- Discounted cash flow.
- Elemental cost plan for design and construction.
- Final account.
- Prime cost sum.
- Quantity surveyor.
- Sunk cost.
- Types of cost.
[edit] External references
Featured articles and news
CIAT responds to the updated National Planning Policy Framework
With key changes in the revised NPPF outlined.
Councils and communities highlighted for delivery of common-sense housing in planning overhaul
As government follows up with mandatory housing targets.
CIOB photographic competition final images revealed
Art of Building produces stunning images for another year.
HSE prosecutes company for putting workers at risk
Roofing company fined and its director sentenced.
Strategic restructure to transform industry competence
EBSSA becomes part of a new industry competence structure.
Major overhaul of planning committees proposed by government
Planning decisions set to be fast-tracked to tackle the housing crisis.
Industry Competence Steering Group restructure
ICSG transitions to the Industry Competence Committee (ICC) under the Building Safety Regulator (BSR).
Principal Contractor Competency Certification Scheme
CIOB PCCCS competence framework for Principal Contractors.
The CIAT Principal Designer register
Issues explained via a series of FAQs.
Conservation in the age of the fourth (digital) industrial revolution.
Shaping the future of heritage
Embracing the evolution of economic thinking.
Ministers to unleash biggest building boom in half a century
50 major infrastructure projects, 5 billion for housing and 1.5 million homes.
RIBA Principal Designer Practice Note published
With key descriptions, best practice examples and FAQs, with supporting template resources.
Electrical businesses brace for project delays in 2025
BEB survey reveals over half worried about impact of delays.
Accelerating the remediation of buildings with unsafe cladding in England
The government publishes its Remediation Acceleration Plan.
Airtightness in raised access plenum floors
New testing guidance from BSRIA out now.
Comments
[edit] To make a comment about this article, or to suggest changes, click 'Add a comment' above. Separate your comments from any existing comments by inserting a horizontal line.