Cost estimates will be used throughout the design and construction process.
During project planning, these estimates are calculated using data from comparable projects, usually on the basis of the area of each type of space (hence the importance of a good building program). These early estimates will necessarily have a high degree of uncertainty, often +-10% or more, which is covered by a contingency allowance in the project budget. As design continues, and more information is available about the planned building, cost estimates get more and more precise, and contingency percentages will be reduced.
Value engineering can be a way of improving cost-effectiveness
Periodically during the design cost exercises known as Value Engineering (VE) will be undertaken. VE is supposed to be about making sure the design is as cost-efficient as possible, while still delivering the same quality and performance. It can often be a useful exercise involving the client, the architectural team, and often contractors, working together to find cost-effective adjustments to the design and specifications.
However, many architects will tell you that VE often results in ‘engineering the value out of the project.’ VE is not a good way to make up for ‘scope creep’ (un-planned growth in a project’s scope), or to correct for inaccurate (as opposed to imprecise) earlier cost estimates.
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