A base cost estimate is an evolving estimate of the known factors in a project, without any allowance for risk and uncertainty or for inflation. It is the sum of the works cost estimate, the project and design team fees estimate, and the other development and project costs estimate.
The term comes from NRM 1, which builds up the cost of a building project in stages. The base cost estimate represents the cost of the defined scope at the base date. Risk allowances are then added, followed by an allowance for inflation, to arrive at the recommended cost limit for the project. Keeping the base cost separate from risk and inflation makes it easier to see how much of the budget is firm and how much is an allowance.
- It includes building works, preliminaries, overheads and profit, fees and other project costs.
- It excludes risk allowances and inflation, which are reported separately.
Related terms: works cost estimate, risk allowance, cost limit, base date.
