The role of Quantity Surveyors and Cost Managers is to establish the overall project budget, and then to ensure that projects are planned, designed, procured, and delivered within this budget.
So how do we establish the overall project budget?
There are three different approaches depending on where you are in the project’s life cycle:
1. Cost Model
2. Cost Plan
3. Cost Estimate
What are the characteristics of a "Cost Model"?
*Usually developed during the Pre-development and Due Diligence stage to inform the feasibility study, financial models, and business proforma (Go/No Go Decisions).
*Typically based on very limited information such as high-level program areas, massing and blocking diagrams, and even back of the napkin sketches.
*A good cost model should be Prescriptive (explains how we can make the project happen).
*Cost Models should be holistic and inclusive of the overall project costs, including, but not limited to Hard Costs, Soft Costs, Contingencies and Escalation.
*Hard Costs are typically broken down elementally (Substructure, Superstructure, Services, Interiors, Site work, etc.) or by functional space.
*Finally, a Cost Model is as good as the DATA behind it…Garbage in = Garbage out