Page 282 - TCDB combined Book

260 The Complete DESIGN BUILDER

Project Budget:

Preparation of the project budget will be based on the final contract amount and the
estimate detailed breakdown. The contract price is usually not disclosed as part of the
Construction Budget and therefore all budget figures will be bare costs with no margins or
overheads applied. Depending on your preference and the nature of your particular operation,
some budgets will provide the estimated quantities and labor costs allotted, with the names of all
subcontractors, but no contract amounts stated.

Regardless of the extent that your budget describes the financial information, a clear
mandate should be stated. Conveying the significance of staying within budget based on the
allotted dollar amounts and total labor costs will be the main objective.

The formal Contract Budget, considered to be an internal company document, should be a
full and complete detailed breakdown including projected mark-ups and overhead allowance. This
particular budget will be the basis for preparation of your Schedule of Contract Values used to
establish your Progress Billing amounts. It is important to obtain agreement, before work
commences, establishing your schedule of value amounts as the basis for all contract billings and
may not be adjusted without mutual agreement.

An effective construction budget should provide the site superintendent with immediate
cost information allowing construction to proceed without delay due to uncertainty on suppliers,
subcontractors or allotted costs.