Pre Contract Cost Control Rics

Pre-contract cost control RICS: Ensuring cost efficiency in construction projects

In the construction industry, pre-contract cost control is critical for ensuring that a project stays within budget and achieves expected cost efficiency. It is a process that is aimed at managing costs during the early stage of a project, before the contract is signed. The Royal Institute of Chartered Surveyors (RICS) has developed guidance for pre-contract cost control, which is important for ensuring that construction projects run smoothly and minimize the chance of disputes arising between the parties involved.

Pre-contract cost control involves estimating the costs of a proposed construction project by identifying and defining the scope of work, defining the roles and responsibilities of all parties involved, and identifying potential risks and uncertainties related to the project. Once this information is gathered, it can be used to prepare detailed cost estimates for the project, and to identify any areas where costs could be reduced.

The RICS guidance on pre-contract cost control recommends the use of a range of tools and techniques to help achieve cost efficiency, such as life-cycle costing, value engineering, and benchmarking. Life-cycle costing involves assessing the costs of a project over its entire lifespan, rather than just during the construction stage. This approach can help identify opportunities for cost savings by considering the long-term costs involved in maintaining and operating the building.

Value engineering is a process that involves reviewing the design and specifications of a project to identify areas where costs could be reduced without compromising on the quality of the finished product. This can be achieved by identifying alternative materials or construction methods that could reduce costs, or by re-evaluating the design to eliminate unnecessary features or works.

Benchmarking involves comparing the costs of a proposed project against similar completed projects. This can provide a useful reference point for estimating the likely costs of a new project, and for identifying any areas where costs may be higher than expected.

By implementing the RICS guidance on pre-contract cost control, construction projects can be completed more efficiently, with less risk of cost overruns and disputes between parties. By considering the long-term costs of a project, and by identifying areas where costs can be reduced without compromising on quality, construction companies can achieve cost efficiency and improve their competitiveness in the market.

In conclusion, pre-contract cost control is an important element of successful construction projects, and the RICS guidance provides valuable recommendations and tools to ensure cost efficiency. If you are planning a construction project, it is essential to implement proper cost control measures from the outset, to minimize the risk of unexpected costs and delays.