The cost framework
The Kostenrahmen serves as a basis for the decision on the brief. It arises before or at the start of the initial appraisal, that is before design in any narrow sense exists.
Its data basis consists of the brief, the schedule of accommodation and benchmarks per unit of area or volume. The depth of treatment is the first level of the cost structure, meaning the eight cost groups.
Three characteristics make it a distinctive stage. It is the only stage preceding any design.
It is not a basic service under the HOAI. Where the designer is expected to provide it, it must be separately agreed and remunerated.
It rests on the thinnest data of any stage and is nonetheless later used as the yardstick when cost movements are assessed.
It should be confirmed by the cost estimate. Where the cost estimate diverges substantially, that is not a detail but a signal calling for a decision by the client.
Anyone preparing a cost framework should therefore record the benchmarks used, their source, their price date and their reference area. Those four entries are later the difference between a defensible statement and an assailable one. The system behind benchmarks is covered in reading construction cost benchmarks.
The cost estimate
The Kostenschätzung serves the decision on concept design. It is the first stage owed as a basic service, prepared in work phase 2.
Its bases are the results of concept design, particularly outline drawings, together with calculations of the quantities of reference units under DIN 277, meaning areas and volumes. Since 2018 it must be prepared at the second level.
The second level is mandatory
With the December 2018 edition the cost estimate must show total costs by cost group at the second level of the cost structure. Until then the first level sufficed.
This change is frequently overlooked in practice, because numerous templates, software defaults and guides still carry the former requirement. A cost estimate showing merely eight totals does not meet the current edition.
In practice the second level means that cost group 300, for instance, no longer appears as a single figure but divided into excavation, foundations, external walls, internal walls, floors, roofs and further groups. The effort rises noticeably, and so does the value of the result.
A deepened estimate is an additional service
Beyond the second level, a cost estimate may be prepared by items of individual trades. That is permissible and in some situations sensible, but it is no longer a basic service; it is an additional service to be separately agreed and remunerated within work phase 2.
What the figures rest on
At this stage no tenders and no bills of quantities exist. The figures come from three sources of differing reliability.
| Source | Reliability | Note |
|---|---|---|
| The practice's own completed projects | high where the task is comparable | presupposes an analysed final cost statement |
| Published cost benchmarks | medium | require regionalisation and updating |
| Figures from specialist designers and suppliers | variable | reference quantity and scope must be clarified |
The first source is the best and the least used. It presupposes that completed projects have been systematically analysed, which makes the final cost statement the real foundation of future estimates.
For the second source, a published benchmark must be adjusted to the location and to the valuation date before use. That adjustment is covered in updating costs with the construction price index.
What is routinely set too low at this stage
Four items come out systematically low in early determinations. All of them concern costs outside the building itself.
Ancillary construction costs in cost group 700. Design services, surveys, permit charges and inspections are forgotten or estimated too low as a lump sum. They must be captured in full, and fees can be assessed early once chargeable costs and fee zone are approximated.
Price movement up to construction. One to two years frequently separate the cost estimate from procurement. Calculating solely at today's price level omits the time factor entirely.
The extent of building services. Their share of building cost has risen over the years. Adopting experience from older projects produces an estimate reflecting a plant standard no longer matching current requirements.
External works in cost group 500. They rarely feature in early design and are correspondingly rarely quantified, yet reach substantial scale for certain uses.
Reference quantities at the early stages
Both early stages work with benchmarks per reference unit, and the choice of unit governs how much the result says. The standard refers here to the areas and volumes of DIN 277.
| Reference quantity | Suited to |
|---|---|
| Gross floor area | the standard case in building work, comparison with published benchmarks |
| Gross volume | buildings with unusual storey heights, halls, special structures |
| Usage area | assessing the space efficiency of a design |
| Use-specific units | school place, hotel room, childcare place, parking space |
The last row is underestimated at early stages. Where a project has a clear output measure, a benchmark per unit of use is frequently more robust than an area benchmark, because it connects directly to the schedule of accommodation, which is already fixed at this point.
Carrying at least two reference quantities in parallel within the cost estimate and holding the results against one another is worth doing. Where they diverge markedly, unusual geometry or an unusual area relationship is almost always present, and that is valuable information at this stage. The system of area categories is covered in reference areas under DIN 277.
Communicating accuracy correctly
An accuracy figure of plus or minus 30 per cent circulates for the cost estimate, sometimes 20 to 30 per cent. These values come from professional literature and practice, not from the standard itself.
Stating a range nonetheless makes sense, for a simple reason. A single figure suggests a precision that does not exist at this design stage, and the client will later remember it as a commitment.
A presentation with three entries per cost group works well: the allowance, the range and the basis. The third is the most important, because it explains why the range is narrow for some groups and wide for others.
What should be avoided is absorbing the uncertainty into the allowances through blanket safety margins. A project estimated too cautiously can fail on apparent lack of viability although it would be sound. Contingencies belong as a separate, named item, as described in cost risks and contingencies.
The transition to the cost calculation
The cost estimate is the basis of the following stage. Between the two lies not only an increase in accuracy but a change of level and a different data basis. How that transition is built is covered in from cost estimate to cost calculation.
Related articles
This article reflects the position at the date of checking and serves professional orientation. It does not constitute legal advice and does not replace assessment of the individual case.