A Cost Plan is the document we provide you to determine the accurate budget for your Custom Building or Renovation project.
The Cost Plan identifies all costs, including those found during the Pre-Design stages that may also have a cost impact during construction.
A well structured Cost Plan can save you the costs of producing engineering and final drawings in the event that your design comes in way over your budget. We place the Cost Plan in a strategic location in the building process as shown in our Process Flowchart.
A Cost Plan is prepared by The Construction Managers in conjunction with a Quantity Surveyor and as well as keeping your design on budget, it also provides realistic cost estimates that would help you to keep your construction on budget and prevent cost over runs.
This is particularly important when dealing with new and innovative products such as Structural Insulated Panel Systems (SIPS) construction where the costs of construction need to be carefully analysed to ensure you avoid cost over runs.
What is a Cost Plan?
A cost plan is a Cost Control device that is derived from a Bill of Quantities as prepared by a Quantity Surveyor.
A Bill of Quantities is a detailed estimate all of the Labour, Materials, Plant and Equipment required to complete your project.
The Construction Managers then develop the Bill of Quantities further so that it is now divided into specific Trades and Suppliers to give a highly detailed and accountable budget planning tool – a Cost Plan.
Design Control Benefits:
One of the key purposes of the Cost Plan is to keep your Working Drawings to your original budget and to ensure that your Custom Home is still on budget before you commission final drawings and engineering.
One of the greatest problems we have seen over the years is where clients ‘overdesign’ their project to the point where they are unable to find anyone to complete the building work within budget - or, worse still, be able to secure finance.
As a result, either
- the plans need to be redrawn at great cost, or
- the project simply doesn’t proceed or
- You accept an incorrect quote that is clearly in error and too cheap, or<
- You scuttle the project, or
- You go into horrendous debt to finance your project
A Cost Plan, completed after the Preliminary drawings, will save all of this wasted time and money and give you the opportunity to alter your Preliminary Drawings to suit your budget without the risk of having to contract an incorrect cheap quote, simply out of desperation.
Finance Made Easier:
A Cost Plan is a transparent document where you have full access to all of the costings for your Custom Home. You can use the Cost Plan to give you a realistic estimate of your project costs so that you can then arrange finance.
Many banks, will accept the cost plan as a basis to approve your construction finance however since the Global Financial Crisis, all banks have tightened up on the options that they offer their customers.
At this stage, the NAB is the only bank that understands Cost Plans and Construction Management however if your bank is not sure, then please get them to call us.
Control Your Costs:
Once The Construction Managers complete your Cost Plan then we also will provide you with a Cost Control schedule. This schedule allows us to measure and manage all the quotes as they come in from the various trades and suppliers as we progress with your project.
You can then measure your project to determine if your finished budget is above or below the Cost Plan so that you can avoid any cost over runs that could cause problems for your finance and scheduling
Site Management Benefits:
As the Cost Plan details the work required by the Trades then we use that information to create Quote Requests for all those trades to ensure that there are no items missed on their quote and even more importantly, we also use that information to manage them on site to ensure that they have actually completed the work before we ask you to make their payments.
Better Tender Selection:
Finally, if you have an architect or drafter wanting to send your project out to public tender then a cost plan will provide you and your designer a valid benchmark by which to assess the quotes as they get returned from builders.
One of the greatest risks for a Custom Building project is if your builder runs out of money and either goes broke or cuts corners on quality and finish and this is often the result of the builder not allowing enough or simply making basic errors on his quote.
To avoid accepting a builder quote that is unrealistic then a Cost Plan is a vital document to save you the nightmare of choosing the wrong builder.