Cost Studies

Cost Planning
A method of controlling the cost (price to client) of a project within a pre-determined sum up to the tender stage.

It attempts to measure and value the cost of work after it is designed

and before it is executed (built).
Is a process of pre-costing the design proposal
Represent the total picture of anticipated costs
Provides a clear statement of issues and isolated the courses of
action and their relative cost,
Provide a guide to decision making.
Cost planning aims at ascertaining costs before many of the
decisions are made relating to the design of a building.
provides a statement of the main issues,
clarifies the various courses of action,
determines the cost implications of each course
provides a comprehensive economic picture of the whole.

Purpose of Cost Planning

Ensure that clients are provided with
value for money.
Make clients and designers aware of the
cost consequences of their proposals.
Provide advice to designers that enable
them to arrive at practical and balanced
designs within budget.
Integrate costs with time and quality.
To keep expenditure within the amount, or
limit, allowed by the client.

PRINCIPLES OF COST
CONTROL
frame of reference (cost limit);
method of checking (cost
target);
means of remedial action (cost
check).

Frame of Reference
establishing a realistic first estimate;
planning how this estimate should be
spent among the elements of the building.

Method of Checking
The cost planner, in conjunction with all
members of the design team, must
detect and measure variances from the
cost targets previously established

Variances between the sum total of the

cost targets and the overall cost limit
will require remedial action to be taken

Remedial Action
The remedial action must be taken quickly and,
ideally, as soon as the cost overruns become
known and the decisions communicated to
everyone in the team.
Remedial action thus ensures that total project
expenditure is contained within the cost limit.
Occasionally, suitable remedial action is
impossible, and additional finances must be
obtained to complete the project.
the presentation to the client of a carefully
completed and detailed revised budget is the
most convincing argument to justify the need for
additional funds