A recent court case highlights the importance of order of cost estimates to set reasonable budgets and elemental cost planning in ensuring that a design develops within budget.
In the case of Riva Properties Ltd & Ors v Foster + Partners Ltd*, the client successfully sued the designer for abortive fees for a hotel project that did not go ahead as the design could not have been delivered within the budget.
The judge noted that the designers should ‘confirm the client’s key requirements and constraints’ and that ‘the client’s budget for the project is plainly a constraint’.
RICS New Rules of Measurement (NRM)1** sets out the process for order of cost estimating to help set a reasonable budget and for cost planning to cost a design as it develops.
The BCIS data base provides benchmark data to help develop elemental order of cost estimates as the basis of budgets and cost plans.
Average building prices and elemental cost data are published in the BCIS Online service
*Riva Properties Ltd, Riva Bowl Ltd, Riva Bowl LLP and Wellstone Management v Fosters + Partners Ltd.
**RICS New Rules of Measurement (NRM) 1: Order of cost estimate and cost planning for capital building works.
