Construction cost is the total cost of constructing a project. It usually excludes preliminary planning, land or right of way acquisition and design costs, and may exclude start up and commissioning costs. The total or subtotal is usually identified as such in an estimate report. It is also known as Total Estimated Contract Cost (TECC).
Because the term can be used loosely, the QS should always make clear what a construction cost figure includes. In NRM 1 terms, the closest equivalent is the works cost estimate, which covers the building works, facilitating works, main contractor’s preliminaries and main contractor’s overheads and profit. Professional fees, other development costs, risk allowances and inflation are added separately to reach the total project cost or cost limit.
- State whether risk, inflation and VAT are included.
- Do not compare construction costs from different sources without checking the scope.
Related terms: works cost estimate, cost limit, project cost, building works estimate.
