The dashboard in eight lines
Eight lines are enough, provided they are kept at the same base date and in the same unit, that is, net throughout or gross throughout. Only the last line serves the decision.
| Line | Content | Source of the figure |
|---|---|---|
| Budget | approved amount, with cost base date and scope by cost group | contract with the designer, cost calculation |
| Contract sums | prices of the construction contracts signed | contracts and annexes |
| Variations instructed | changes agreed in writing, with a price | variation agreements, change orders |
| Variations notified | claims received but not yet decided, at their probable amount | variation offers, own assessment |
| Variations disputed | rejected or contested claims, at their probable amount | correspondence, own assessment |
| Quantity changes | difference between contract quantities and forecast quantities | measurements, interim invoices |
| Price adjustment | effect of agreed escalation clauses, billed and still to come | contract clause, indices |
| Forecast of total cost | contract sums plus the five deviation lines | calculation by the client or its representative |
The remaining risk budget stands against the forecast. What is left of the contingency, compared with what the deviations are consuming, shows whether the budget will hold.
Instructed is not final
The contract sum is reassuring, and that is precisely its flaw. It reflects only the contracts signed; variations, quantity changes and price adjustment escape it.
Notified and disputed variations go into the forecast at their probable amount, not at zero because they are contested. Taking them out is betting on the outcome of a dispute.
Quantities and price adjustment are projected to the end. What has been billed so far says nothing about the adjustment on work still to come, and an item that has already reached its contract quantity when half executed signals an overrun.
The pace: every interim invoice
The dashboard is updated at the rhythm of the interim invoices, because that is where the information arrives. Under s. 632a of the Bürgerliches Gesetzbuch (BGB, the Civil Code), the contractor can claim interim payments up to the value of the work performed and owed under the contract, shown by a statement that allows a quick and reliable assessment. That statement is the data source for the forecast.
Under a VOB/B contract the window is short. Under s. 16(1) no. 3 VOB/B, claims to interim payments "fall due within 21 days of receipt of the statement" (unofficial translation, as are all quotations here). Those 21 days are also the window in which the forecast should be updated, before payment in effect confirms the quantities. The VOB/B contract as such is explained in the article on the construction contract under the VOB/B.
What the designer owes, what the client keeps
Cost control during construction is a basic service of the lead designer. For work phase 8, Annex 10 of the HOAI lists "cost control by checking the invoicing of the contractors against the contract prices" (letter i) and "final cost statement, for example under DIN 276" (letter j). The content of the work phase is set out in the article on work phases 8 and 9, the method in the article on cost control and cost management.
The decision stays with the client. The designer compares and reports; the client approves variations, decides on savings and releases contingencies. The federal RBBau (federal building guidelines) makes this clear: the funds for risk costs under letter d. "are released by the client only when the risks occur" (C.8), and where deviations from deadlines and cost targets are emerging, the client must be informed without delay, with proposals for alternatives (D.4). For a private client this is a useful model, not binding law.
The five causes of deviation
A deviation in total cost can almost always be traced to one of five causes. Each is covered by an article of its own in this branch:
- a change ordered by the client
- a variation arising from the contract itself
- a quantity variance under a unit price contract
- a price adjustment whose effect depends on the budget's base date
- the termination of a contract, whose cost sits alongside the cost of the successor
What weakens the dashboard
Three habits undermine any forecast, namely accepting a variation orally and without a price, mixing net and gross amounts and keeping the budget without a cost base date. With the third, the share of price movement in the deviation can no longer be isolated.
The articles in this branch
- Changes under section 650b BGB: the right to order changes, the 30-day period, the adjustment of pay under s. 650c BGB and the 80 per cent interim payments.
- Variation register: how variations are numbered, assessed and carried into the forecast with their status as instructed, notified or disputed.
- Quantity variances and final cost: the 10 per cent rule of s. 2(3) VOB/B and projection item by item.
- Price adjustment and the base date: bringing the budget forward to the tender date and the material price escalation clause in federal building.
- Terminating the construction contract: what termination costs the client, from termination at will to termination for good cause.
This article reflects the state of the rules at the date of checking and is for professional guidance. It does not replace legal advice or examination of the individual case.