A development budget is used to establish the total costs and expected returns for a project. The construction costs, including professional fees and contingency allowances, are summarized in a cost plan which is included as part of the total costs of the budget. Developer's returns, surveys, insurance, and extraneous consultant fees are not included in a cost plan, but are part of a development budget. By using a cost plan, it is possible to subdivide the budget to each of the main building elements and thereby provide a basis for cost control. Cost plans evolve as projects progress from conceptual to completion stages.
Initial Cost Appraisals
At the preliminary, or feasibility stage, initial cost appraisals provide some guidance on the overall costs of similar projects, and may be provided as a range. The estimates are primarily used to determine the feasibility of a project, given the expected returns for the project, as well as define the overall size or scope of the construction.
Elemental Cost Plan
Before detailed design is completed, as part of the project brief stage, an elemental cost plan is prepared which allows various building shapes, component specifications, and materials to be evaluated for their cost effectiveness. This information is also used to provide cost checks during the design process.
Approximate Quantities Cost Plan
Once detailed design is completed, approximate quantities are combined with current market prices to prepare a more accurate estimate of construction cost. This costing may be further revised as a pre-tender cost plan for larger projects.
Sample Elemental Cost Summary
All parts of the cost analysis must be presented in a clear and consistent manner to facilitate further analysis and easy reference. The following sample cost summary is standardized around the order of construction, and each element is described in terms of both it's cost, as well as a ratio of gross floor area. Some elements are also given in terms of a ratio and elemental price list, as well as an elemental quantity.
The following example is of a small warehouse.