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Construction Cost Management

Introduction
Anyone proposing to construct a building or engineering structure will need to know in advance the probable costs involved in the works. These costs include the costs of the works to be carried out on site by the contractor, professional fees, and any taxes that may be due to the government. Throughout the design and construction process, quantity surveyors are required to advice the client on any cost implications that may arise such advice is especially crucial during the project's inception (Ashworth and Hogg, 2002, Ferry et al. 1999). At the project's inception, the cost advice given needs to be as reliable as possible so that clients can proceed with the greatest amount of confidence. This is because "[t]he initial estimate of the cost of a building often carries the burden of being the cost limit for the project" (McCaffer et al., 1984, p. 415).

Construction is a major capital expenditure which clients do not commence until they are certain that there is a benefit (Myers, 2004, Potts, 1995). The early estimate is particularly important as it influences the client's brief and can determine the viability of the entire project. Most clients are working within tight predefined budgets that are often part of the larger overall scheme. If the budget is exceeded or the quality not met then the scheme could fail (Tyler and Smith, 1995). Pre-tender estimating sets the original budget and forecasts the likely expenditure to the client (Potts, 1995). Within this context, "[t]he establishment of the cost limit is important in determining a project's viability, and so [the] initial estimate carries a burden disproportionate to its reliability" (McCaffer et al., 1984, p. 415).

Therefore, the conclusion of this paper is that estimating project costs requires a methodical approach, yet at the same time demands certain finesse. All projects are not the same. Even if contractors build the exact same facility over and over, the price of each project will differ. There are many specific factors that will always influence the pricing of the project, and the quantity surveyor must be able to discern the level of impact for each. Many of these factors call for the art of estimating, and the more experienced the estimator, the more accurate the 'gut feel' for some of these impacts will be. This is because

Cost estimation is an experience-based process. Construction practitioners are aware of uncertainty, incompleteness and unknown circumstances of factors affecting construction costs. Realisation and understanding of cost-determinants enrich the competence of cost estimators, and hence along with decent cost forecasting techniques, deliver more reliable and accurate cost estimates (Ellag et al., 2005, p. 538).

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