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• CHARACTZ RISTTCS OF GOOD BUDGETS Historically, more projects have been observed to <br /> come to grief from a cost point of view because of <br /> poor initial budgeting. It is not always easy to <br /> • Establish an achievable target cost. ensure that realistic budgets are assigned to <br /> programs, since these can be tied to an <br /> • Reflect the preferred time frame or "emotional" decision rather than a careful and <br /> schedule. objective appraisal of program requirements <br /> translated into reasonable cost limits. Sometimes a <br /> • Reflect the programs scope client's unreasonably stated cost limits can be a <br /> condition of acceptance of a project's commission - <br /> • Reflect the desired quality level a practice that should be discouraged. <br /> (with "needs" rather than "wants" The preparation of a program budget, therefore, is <br /> expressed). the first step in a project's cost planning and <br /> control activities. It greatly assists orderly <br /> •ReBect the desired performance appropriations for funds and sets a discipline for <br /> levels (how well the building will the project's ongoing development. <br /> serve to operate its original intent). <br /> • Be defensible and the basis of its How is a program budget prepared? <br /> preparation clearly understood. The budget should be prepared by, or with input <br /> from, a professional who has the relevant <br /> • Act as the basis for future cost experience, in close collaboration with the client. <br /> control <br /> • •Have all participants' confidence The technique of preparing a program budget <br /> involves the appraisal of the program's area, the <br /> and acceptance <br /> performance, quality and operational criteria, and <br /> • Include a defined contingency sum. the development of estimates based on historical <br /> data from similar facilities. It fundamentally <br /> involves a conversion of the program's stated "net" <br /> floor areas (usable space) into "gross" floor areas <br />_ to include the unprogrammed but necessary <br /> horizontal and vertical circulation spaces, the <br /> structural, mechanical, electrical and other <br /> miscellaneous support spaces required for the total <br /> structure. Carefully selected unit cost rates are <br /> _ then applied to these functional areas in order to <br /> develop the core of the project's budget - the <br /> building construction cost. The building interiors <br /> and equipment components and the site development <br /> work should be calculated and determined separately <br /> to narrow the "information gap" that usually exists <br /> at this front-end stage. <br /> • <br /> 5 <br />