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Initiation Feasibility Design

Client Preliminary Developed Construction

Brief Design Design Drawings

Planning Building
permission Consent
Commissioning
Construction and hand over

Building
Consent
 Cost
Establish budget for project Analysis
Initiation Feasibility Design

Client Preliminary Developed Construction

Brief Design Design Drawings
Contract Price +
Contingencies= Cost Planning - work with design team to ensure building
Revised Budget as designed stays within budget (or revise budget)
Commissioning
Construction and hand over

Final Contract
Manage cost of variations to contract Price Cost
Analysis
Plus analysis of the final account for
the project

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UK - BCIS example

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 Budget
Cost
Estimating
Analysis
Final price

Cost
Analysis Cost
Contract price
Planning

Contract Bid or
Administration Negotiation

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 Cost
Establish budget for project Analysis
Initiation Feasibility Design

Client Preliminary Developed Construction

Brief Design Design Drawings
Contract Price +
Contingencies= Cost Planning - work with design team to ensure building
Revised Budget as designed stays within budget (or revise budget)
Commissioning
Construction and hand over

Final Contract
Provide advice on cost of variations to contract Price Cost
Analysis
Type of Building Method of Estimating

Most Buildings $ * M2 of floor area

◦ Offices
◦ factories

Schools $ * number of students

Hospitals $ * number of patients
Hotels $ * number of beds

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 Establish budget for project Budget Budget Budget
Review Review Review
Initiation Feasibility Design

Client Preliminary Developed Construction

Brief Design Design Drawings

Cost Plan 1 Cost Plan 2

Contingency 1: Changes to the clients brief.
The details of the clients requirements may change during the
design process.
Contingency 2: Unknowns and errors in the design
documents.
Contingency 3: Changes in market prices.

The amount of the contingencies should reduce as

the project progresses

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 Establish budget for project Budget Budget Budget
Review Review Review
Initiation Feasibility Design

Client Preliminary Developed Construction

Brief Design Design Drawings

Cost Plan 1 Cost Plan 2

+/- 20 – 100%
+/- 20 – 50% +/- 10 – 25% +/- 5 – 15%
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Drawings and Request for Variation
Specification variation order

Variation price
agreed

Contract Revised
Amount ($) Contract
Amount ($)

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Cost Control is concerned with
(a) Influencing the factors which create
changes to the cost baseline to ensure that
changes are beneficial.
(b) Determining that the cost baseline has
changed
(c) Managing the actual changes when and as
they occur
Cost Control includes:
Monitoring cost performances to detect variances
from plan.
Ensuring that all appropriate changes are recorded
accurately in the cost baseline
Preventing incorrect, inappropriate, or
unauthorized changes from being included in the
cost baseline.
Informing appropriate stakeholders of authorized
changes.
Cost Baseline
Performance Reports
Provide information about cost performance
such as which budgets have been met and
which have not. It also alerts the project team
to issues which may cause problems in the
future.
Change Requests
These may occur in many forms-oral or
written, direct or indirect, externally or
internally initiated, and legally mandated
or optional. These may require increasing
the budget or may allow decreasing it.
Cost Change Control System
It defines the procedures by which the cost
baseline may be changed. It includes the
paperwork, tracking systems, and approval
levels necessary for authorizing changes.
Performance Measurement
It helps to assess the magnitude of any
variations which do occur.
Additional Planning
Perspective changes may require new or
revised cost estimates or analysis of
alternate approaches.

Computerized Tools
Revised Cost Estimates
Budget Updates
Corrective Action
Estimate at Completion
It is a forecast of total project costs based on
project performance.
Lessons Learned
1 – To have a knowledge of the profit and loss of the
project throughout the duration of the project.
PROJECT PROFITS
1) Client payments.
2) Sale of surplus or scrap material and plant
3) Payments for plants or labor by others, where, this plant or labor is , from time
to time not required for the project.
PROJECT LOSSES
1) Labor and site office costs
2) Plant costs
3) Site overheads i.e. site facilities, access roads and office etc
4) Cost of tendering including bonds, insurance, etc.
5) Material costs.
6) Head office overheads proportioned over all current projects.
2 –To have a comparison between the actual project
performance and that conceived in the original project
plan.
Comparison is basically done according to the following
bases:
1) According to units of production
2) According to line items; e.g., labour, material,
equipment, overheads, ---

3 –Provides feedback data on actual project performance

to future project planning