3.1 Project Costs and Value Flashcards
Why do we manage costs?
-To work within budget limitations
-To make value-based decisions
When are you predicting and when are you controlling costs?
Predicting costs through to some point in the technical design stage (where you get a contractor on board
>then you can start controlling costs
What is pre-contract and post-contact in a traditional project?
Pre contact-everything up until the contractor is appointed
Post-contract-everythin after contractor is appointed until you get to handover of project
What is pre-contract and post-contract in a traditional project?
Contractor appointed at end of stage 2 (predicting), and once contractor is on board you are controlling costs (indicative split only)
When does cost management start?
Stage 0 or stage 1 and will (most likely) continue to early ‘in use’
How do we go about rules of cost prediction?
New rules of measurement
What are the three design stages (RIBA Plan of work)
-Concept design including outline proposals for structural design, building service systems, outline specifications
-Prepare Spatial Design including co-ordinated and updated proposals for structural design, building services systems, outline specifications
-Prepare Technical Design to include all architectural, structural and building services information
What’s the difference in risk and impact on cost from concept design to handover
Lower stages-Ability to make change is high and impact on cost should be low
Higher stages-Ability to make change to design reduces and the impact on cost is likely to increase
What are the four key purposes of cost prediction?
-To test financial feasibility of achieving the emerging project brief taking into consideration project risks
-To keep expenditure within the agreed cost limit
-To determine and agree a cost limit
-To provide robust cost information so that the client can make informed decisions
Traditional cost planning: What stages are order of cost estimate and cost planning?
Order of cost estimate-Stage 0 and 1
Cost planning-Stage 2-4
Cost planning (typically) continues until the project is tendered (so end of cost construction planning process will be determined by the issue of tender documentation)
What is and what is the purpose of order cost estimate?
An estimate based on benchmark data for a similar type of project based on the client’s strategic definition or initial brief
Purpose: to establish affordability of a project development for a client
What’s a cost limit?
The maximum expenditure the client is prepared to make in relation to the completed building-includes construction costs, cost of professional services etc
