Construction DB | Construction Site Handbook | Project / Construction Cost

Construction Site Handbook

Share your expertise and experience with the Construction DB community. You are free to add or edit any of the articles in the Construction Knowledge Collaboration Project.

[English | 简体] Project / Construction Cost

Project / Construction Cost
Naturally the client wants to know as close as possible the forthcoming expenditure that will incur for the project , and also wish to see the project work will be finished at a minimum cost compatible with satisfactory materials , workmanship and time .

So , when the set of engineering drawings is available together with the determination of materials to be used , the apparent cost of the project will be then evaluated for the client’s consideration . The cost of the project will have to be amended as the revised architectural / engineering design demands , or vise versa until the decision of final design is made .

In case the financial status mainly governs the size and sequence of the project , the client itself should know well about the schedules of its capital investment and expenditure .

Schedule of Quantities
After the architectural / engineering design is determined , a schedule of quantities for all the proposed works will be prepared and to ascertain the true cost of the project by entry of estimated unit rate against each work item . For the sake of not changing the design , the cost of budget can only be fine toned by the change of building material or lower requirement of specifications .

Estimation / Cost Planning
An estimate of capital cost ( direct cost and indirect cost ) and an estimate of capital expenditure ( plant , labour , material , temporary works , fixed overhead , subcontractors , suppliers , operation and maintenance ) will be well prepared in some kind of financial schedule to assess the economic viability . At the same time , an income schedule shall also be prepared to foresee the profitability and rate of return in case of a commercial project .

Financial Support
Financing of a project , particularly for a commercial project , may significantly affect the choice of size of project and type of contract to be selected by the client . In case the financial status mainly governs the size and sequence of the project , the client itself should know well about the financial schedule of its capital investment and expenditure . If short of funding , it should look for supports well in advance from outside parties or banks whence necessary .

Contingency
No matter how much time and efforts have been spent on preliminary investigations and in engineering design stage , there are always unforeseen problems encountered in civil engineering projects after the commencement of work . In order to eliminate the situation of running out of budget , the client or its engineer usually allows a contingent sum of money to cover the unexpected additional works .

Project / Construction Cost Sub-Pages