Cost planning not only enables capital cost budgets to be set but also provides a structure to accommodate as well as manage transformations to the client’s brief and design (Murdoch & Hughes, 2007, p.80). An effective Cost plan enables a client together with the design team to understand where and how finances have been allocated towards the completion of a project. On the other hand, Cost control should be provided from start to completion of the project, ensuring that the estimated final cost is always known. However, Pre-contract Cost Controlling is quite different from the Post-contract Cost Controlling.
Pre-Contract Cost Planning and RIBA Plan of Work
As aforementioned, an effective construction plan is the foundation of the budget development as well as schedule for work. Pre-construct cost planning is thus crucial when preparing a construction plan. Even though construction costs can be pre-planned as well as estimated, it is quite possible for these to significantly change in the course of the actual construction (Chitkara, 1998, p.99). Pre-contract cost planning informs the owner when financial installments will be required to enable him/her keep current with the billings (Ferry, et al., 1999, p.55). ...Show more