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Testing development viability early
Most development risk is priced in long before the first tender return. Early appraisal work decides whether a scheme is worth pursuing at all.
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Project management · 4 min read
Keeping commercial control through delivery
Overruns are rarely one large event. They are an accumulation of small decisions that were never priced.
Cost certainty on site comes from disciplined change control, honest reporting and decisions taken at the right time.
Report on the outturn, not the spend
A cost report that records certified value to date tells the developer where the project has been. A useful report states the forecast final account: committed cost, agreed variations, notified claims, assessed risk and remaining contingency.
Reporting should be issued on a fixed cycle with a consistent format so that movement between periods is visible at a glance. Trends matter more than snapshots.
Price change before it is instructed
Change is inevitable; unpriced change is a choice. Every proposed instruction should carry a cost and programme assessment before it is issued, so the client is deciding on a known basis.
Where the contractor cannot price it in time, the instruction should record the mechanism and the cap under which it proceeds. Retrospective negotiation is always more expensive.
Treat contingency as a managed budget
Contingency drawn down in the first third of the programme is a warning, not an accounting entry. Allocating contingency against the specific risks it was set aside for keeps the remaining exposure honest.
Where the risk register closes out favourably, the release should be recognised as recovered margin, not absorbed quietly into the next variation.
Decisions on time protect the programme
Most delay claims trace back to information or decisions that arrived late. A live schedule of client decisions, with dates driven by the construction programme, removes the most common and least defensible source of prolongation cost.
Senior involvement matters here. Decisions that require commercial judgement should not wait for a monthly meeting to be raised.
In short
- Report forecast outturn cost, not certified spend.
- Assess cost and programme impact before instructing change.
- Draw down contingency against identified risks only.
- Run a dated client decision schedule aligned to the construction programme.
Cost & commercial management
Procurement strategy in a changing market
Procurement is a commercial decision about risk allocation, not an administrative step between planning and site start.
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