Auditing construction costs during building design: A case study of cost planning in action

Abstract

Building cost planning was originally developed in the framework of traditional procurement methods with conventional documentation, tendering and administration processes. With the advent of alternative forms of procurement with more fluid approaches to design stages and documentation, the need for sound cost planning does not appear to diminish. As a process established on solid theoretical foundations, cost planning should be robust enough to adapt and flourish in a variety of procurement environments. However, little documentation and analysis of transformed and adapted forms of cost planning appear to have been made. This case study of a design‐construct company in Melbourne, Australia, presents and explores a contemporary form of building cost planning integrated into a design cost management approach adopted by a construction company experienced in alternative forms of procurement. The article traces this process on a design‐construct project from inception to the end of the design development stage and tender. Whilst the fundamental framework of cost planning remains intact, the focus and detail in each of the stages are guided by the company's priority for greater financial control over the cost and value implications of design and other decisions. This recently established working model of design cost management in this company has been designed to deliver added value to the client through a better balance of time, cost and quality in each project.

Citation

Smith, J., O'Keeffe, N., Georgiou, J. and Love, P.E.D. (2004), "Auditing construction costs during building design: A case study of cost planning in action", Managerial Auditing Journal, Vol. 19 No. 2, pp. 259-271. https://doi.org/10.1108/02686900410517858