From the works budget to the client's total budget

The Baukostenbudget (works budget) in the narrow sense covers the building. In design usage, this usually means cost groups 300 and 400 of DIN 276, that is, the building structure and the technical installations. Many benchmarks, many tenders and many conversations with the architect refer to this sum.

The client's Gesamtbudget (total budget) runs from cost group 100 to cost group 800. It also contains the land, the preparatory measures, the external works, the fittings and furnishings, the ancillary construction costs and the financing. What cost groups 500 to 800 cover in detail is explained in the article on cost groups 500 to 800; this article does not repeat the classification.

Even official sets of rules draw the line in different places. The federal RBBau (Richtlinien für die Durchführung von Bauaufgaben des Bundes, the federal guidelines for carrying out building projects) understands "construction costs" as cost groups 200 to 600, gross, and treats the ancillary construction costs of cost group 700 as a separate component (RBBau C.6 and C.8). Anyone taking over a figure must therefore always ask which cost groups it contains and whether it includes VAT.

The items do not become certain at the same time. Some are fixed before the first drawing is made, others only with the final account. For managing the budget, this sequence matters more than the size of any single item, because it shows where the uncertainty lies.

Ancillary construction costs are easily underestimated. They include not only the designers' fees but also expert reports, official charges and the costs of the client's own tasks. What they include and how to make a rough allowance for them is covered in the article on ancillary construction costs in cost group 700.

External works and fittings become certain last but are cut first. Because they come at the end of the design, in practice they often serve as a balancing item for overruns on the building. A client who carries them as separate lines from the outset sees early on whether this cushion really exists.

Financing depends on the payment plan. Commitment interest and interest during construction arise with the drawdowns, that is, with the instalment payments. A budget that carries cost group 800 as a lump sum without knowing the expected payment profile underestimates it every time the construction period is extended.

The federal government divides its budget into four types of cost, and this structure can be transferred to any private project. Under section C.8 of the RBBau, the Projektkostenziel (project cost target) consists of the construction costs (cost groups 200 to 600), the ancillary construction costs (cost group 700), the "forecast construction cost increases" (unofficial translation) and the risk costs, which are kept in two groups. The risk costs with a very high probability of occurrence are "determined on a project-specific basis" and "listed individually"; the funds for them "are released by the client only when the risks occur". The further "risk costs determined and justified with sufficient specificity" are only included in the federal budget where a project is budgeted individually (Einzelveranschlagung), and then as funds blocked under section 22 BHO (the Federal Budget Code).

For the private client this is a model, not a rule. Three ideas from it are directly useful:

1. Price increases are a component in their own right. They are not tucked silently into the construction costs but stand on a line of their own. This keeps visible which part of a later deviation is due to prices and which to quantities or design.
2. The risk reserve is broken down by risk, not set as a lump sum. A percentage on the construction costs says nothing about what the money is meant for. A list of individual risks, each with an amount, can be checked, updated and reduced when a risk falls away.
3. The reserve is released by the client, not by the designer. A client who hands over the reserve as part of the design budget risks finding it spent before any risk occurs. How the federal government organises this release is described in the article The project cost target: how the federal government sets its building budget.

Mixing gross and net produces overruns that are not real and hides ones that are. Benchmarks, procurement thresholds and many cost determinations are stated net; instalment payments under section 16(1) VOB/B, by contrast, are paid "including the stated VAT amount attributable to them". The client's cash flow therefore moves gross, even if the tax is later recovered.

The solution is to manage the budget net, with VAT as a separate line. That way every item can be compared with tenders and cost determinations, while it remains visible what funds actually have to be made available. Whether the tax is a burden for the client or a pass-through item must be settled from a tax point of view before the budget is set; no designer answers that question.

Every amount in the budget has a price level. A budget drawn up in the spring and compared with tenders the following year cannot be compared without being updated. The total budget therefore carries a base date, and the expected price trend up to award and construction stands on a line of its own, as the federal government does with the forecast construction cost increases. How the base date is set and how material price adjustment clauses (Stoffpreisgleitklauseln) are handled is covered in the article Price adjustment and the budget's base date.

A reserve that nobody manages gets quietly planned away. The client therefore keeps it outside the cost target given to the architect. If the client gives the designer the total budget including the reserve as the design target, the designer will design right up to the limit, and nothing will be left for the unforeseen.

The reserve is released according to events, not the passage of time. A risk occurs: the client releases the corresponding amount and records it. A risk falls away, for instance once the earthworks are complete: the amount does not automatically become available for other wishes; instead the client deliberately decides whether to reallocate it or save it.

This article does not give figures for reserve allowances. Their size depends on the project, the stage of design and the type of risk; the method is covered in the topic on DIN 276.

A benchmark is only as good as the statement of its scope. If a value per square metre refers to the building costs, all the other cost groups are missing from the total budget; if it refers to a different reference area from the one in your own brief, even the multiplication is wrong. What to look out for in the scope of a benchmark is explained in the article on what a cost benchmark includes.

The rule for the client is that every figure in the total budget carries its scope, its base date and its tax status. If any of these is missing, the line is not yet ready for the budget.

The following structure sums up the article. It deliberately contains no amounts and no shares, because these depend on the project.

The "Status" column is the most important. It shows at a glance how much of the budget is already contractually committed and how much is still an estimate, and therefore how robust the total is.