Cost Planning is a statement of how the design team proposes to distribute the available money among the elements of the building. The cost planning can be adjusted to design requirement. In practical sense, the CP starts with the development of a figure (or cost) to allow client to decide whether the project is feasible. Early cost planning has major benefits for construction projects.
Cost planning is used to monitor and control the estimated construction costs of a project to ensure you get accurate information on expenditure and progress at every stage. Cost Planning is the use of a Cost Model for “should-cost” forecasting to make informed decisions. Often performed for:
- Budget Requirement Requests
- Cost Estimations
- Output Quantities
- Capacity Management
- Risk Analysis
- Various Time Frames: Out year / Current year, Quarterly, Monthly
- Defining Targets to Measure Efficiency and Effectiveness
Quantity Surveyors are proving there is a lot of added value in getting them involved at the ground level of a new project, rather than at the tail end of the design process. Many developers are turning to early cost planning for a number of reasons.
Advantages of cost planning
- Early cost checks ensure preliminary estimate is more accurate.
- The better understanding of market conditions. Quantity Surveyor has an in-depth understanding of the property market and access to historical information which can assist developers in evaluating various feasibility options for a particular site or project.
- Saves time and money if the architect of redrawing, quantity surveyor creating budgets, and contractor on agreeing amendments.
- A balanced expenditure distribution may produce a more rationalized design.
- Rational distribution of expenditure throughout the design is achieved
- Closer alliance between design team assist in understanding each other.
- QS is familiar with the design at the earliest stags
- Better chance of comparing different projects
- Working drawings are likely to be available sooner
- Cost consideration will be given more attention since the QS is involved in the early stage of the design process.
- Since there is a checking system on the cost, there is a possibility that fewer changes will be made to the BQ. Discussions among designers can be made before the production of the final design. This will definitely save time in making an adjustment to any changes to the cost and design.
- Cost planning provides basic information on the cost comparison between different projects.
Disadvantage of cost planning
- More preparation is necessary for the early stages of design
- The architect is likely to be more restricted in his method of working
- QS requires a greater knowledge of pricing of the design factors that affect the cost
- Architect and QS are likely to b involved in more work
- The designers may have some limitation in their work style.
- The QS need to be equipped with past experience and knowledge pertaining to cost and factors influencing the cost.
- Both designer and QS are involved with a lot more work at the design stage as compared to when no cost planning is used.