The estimate base date is the date on which the cost limit, excluding inflation, is established as the basis for calculating inflation, changes and other related variances. The cost limit excluding inflation is the sum of the works cost estimate, the project and design team fees estimate, the other development and project costs estimate and the risk allowance estimate.
The base date fixes the price level of the estimate. All rates and allowances should reflect costs at that date, and inflation is then calculated forward from it to the tender date and through the construction period. Without a stated base date, nobody comparing or updating a cost plan can tell how much of a change is due to price movement rather than to design or scope.
- State the estimate base date on every order of cost estimate and cost plan.
- When rebasing to a new date, adjust using a recognised tender price index and record the index values used.
Related terms: Inflation, Cost Limit, Tender Price Index.
