Trade-oriented cost structure by procurement package

DIN 276 provides, in its section on cost structure, for a cost determination to be prepared on an execution basis, that is by trade or procurement package rather than by element. The standard treats this as a permitted alternative rather than a departure, though under a condition set out further below.

Modernisation is named as the typical situation. The reason is plain: in existing buildings whole elements are rarely created; individual measures are carried out on existing ones. A structure by trade then reflects the actual scope of works more closely than one by element.

A second benefit concerns cost tracking between the cost calculation and the tender sum: where both are ordered by the same procurement packages, comparison is immediate, without tender sums having to be distributed across element groups. Neither schedule then has to be redistributed onto element groups before it can be read against the other.

Trades and element groups are not congruent, and the mismatch runs in both directions at once. That is why no single mapping can resolve it.

Trade	Cost groups affected
Drylining	internal walls, floors, built-in fixtures
Shell	excavation, foundations, external walls, internal walls, floors
Facade	external walls, in part roofs, in part windows
Roofing	roofs, in part external walls
Electrical	several installation groups within KG 400, in part automation

Conversely, a single cost group is worked on by several trades, and the external wall is the clearest example. The shell contractor, the facade contractor, the window contractor and the decorator all work on it in turn.

Direction of the mismatch	Example
One trade touches several cost groups	shell: excavation, foundations, external walls, internal walls, floors
One cost group is worked by several trades	external walls: shell, facade, windows, decorator

No unambiguous mapping between the two orderings therefore exists. Every reconciliation is an apportionment, and it must be recorded to remain traceable.

Here lies the real condition. Trade-oriented structuring is permissible so long as chargeable costs can still be properly determined from it.

The reason is systematic, since chargeability attaches to cost groups and not to trades. A schedule that no longer permits that distinction is unfit for determining fees.

Cost group	Chargeability
300 building, construction works	in full
400 building, services	only under the threshold rule
100 site	not chargeable
700 ancillary costs	not chargeable
800 finance	not chargeable

In practice: where trade-oriented structuring is agreed, an allocation to cost groups must be carried from the outset. Establishing it afterwards means working against an apportionment that can no longer be unambiguously reconstructed.

The boundary between building fabric and technical installations deserves particular attention here, because it governs application of the threshold rule. The system is covered in the branch on chargeable costs.

The workable approach is not two separate schedules but one schedule with two attributes per item. Every item carries a cost group and a procurement package, so analysis is possible in both directions without anything being duplicated.

Where a procurement package touches several cost groups, it is to be apportioned at item level rather than distributed as a lump. A percentage key is permissible where justified and recorded, but it is the poorer solution because it does not follow changes.

Three requirements secure the reconciliation, and all three concern the moment at which the allocation is made rather than its content. Afterwards the split can no longer be reconstructed unambiguously.

#	Requirement	Why
1	The allocation arises when the schedule is drawn up	afterwards the split can no longer be reconstructed unambiguously
2	The splitting rule is recorded	with its basis stated, otherwise it cannot be audited
3	The allocation stays stable across the stages	a later change produces apparent variances in cost control

Three reasons argue for retaining the cost group structure as leading and carrying procurement packages additionally. Each of them concerns a use that a purely trade-based schedule cannot serve.

Reason	What is lost
Comparability with benchmarks	published benchmarks are formed by cost group; a purely trade-based schedule cannot be tested against them
Cost control across the stages	case law has held that schedules by trade and updates by cost group yield no comparability beyond the total
Usability for future projects	the final cost statement yields usable in-house benchmarks only when read by cost group

Where the works go to a single main contractor, a particular situation arises: there is only one procurement package, and the price is a single sum. The order that normally arises from the procurement itself must here be demanded expressly.

Trade-oriented structuring largely falls away as a management instrument, while allocation to cost groups becomes a task in its own right. Without it, chargeable costs cannot be determined, cost control against the cost calculation cannot be maintained, and no usable benchmarks can be drawn from the final cost statement.

The solution lies in the tender documents: where the bill of quantities requires a price breakdown by sections that can be mapped to cost groups, analysability is preserved. Where the breakdown is requested only after contract, the tenderer is not obliged to provide it and has no interest in doing so.

That requirement therefore belongs in the tender documents rather than in a later request. It costs little in preparation and decides whether the project remains analysable for cost planning at all.

Procurement packages are set within the pre-tender estimate, and the tender sum follows that setting. It is therefore a decision with effect through to the final cost statement.

Their scope is simultaneously an instrument of management. Larger packages reduce coordination effort and the number of interfaces; smaller packages increase competition per lot and permit finer procurement. Both act on price, and in opposite directions.

The system of both stages is covered in pre-tender estimate and tender sum. The procurement law framework is set out in the subject area on tendering under the VOB.