1. A standard in force for more than twenty years
According to information published by the Estonian Centre for Standardisation and Accreditation the position is unambiguous. A classification already exists in a standard.
| Item | Detail |
|---|---|
| Standard | EVS 885:2005 "Classification of construction costs" |
| In force since | 4 November 2005 |
| Approved by | directive of the Estonian Centre for Standardisation of 31 October 2005 |
| Status | the latest version, not since replaced |
The standard has therefore been available throughout the period in which the problems of construction budgeting have been discussed. This guide does not reproduce its content, since it is a copyright-protected document whose full text must be obtained from the standardisation centre.
2. Who prepared it
Here is a detail that changes the tone of the whole discussion. The standard is voluntary rather than mandatory.
According to the standard's own information it rests on two draft standards: "Classification of construction costs", prepared by the Estonian Association of Construction Entrepreneurs, and "Management of construction costs", prepared by a specialist consultancy. Neither draft achieved consensus in consultation, and in the course of discussion it was decided to prepare a new standard on the basis of both.
Structured budgeting is therefore not a requirement imposed from outside: the construction entrepreneurs' own representative organisation was among its initiators. That is worth remembering when the subject is raised with a contractor.
3. How it divides costs
According to the standard the underlying logic has two levels, and one distinction is particularly useful to a client. The upper level covers the parts of the building.
Costs are divided into main groups identified by cost positions. Some positions describe structures, that is the physical parts of the building. Three positions are not structures in the construction sense but cost groups significant to the organisation of the work.
| Cost group | What it depends on |
|---|---|
| Structures | the design solution and the quality requirements stated in it |
| Client costs, site organisation costs, site overheads | the organisation of the procurement and the works, and the duration of construction |
This distinction is the most useful part of the whole standard for a client, because it shows which costs the design drives and which the organisation drives. It makes tenders comparable.
4. Why the names may not be changed
One rule is stated directly in the standard, and its reason is practical. It concerns the numbering of positions.
According to the standard, a position code is extended at a lower level by an additional number, but in use the principles of the classification as a whole must be observed, and the main names of cost positions and their content may not be arbitrarily changed. The link to the upper level is thereby preserved.
If everyone changes the names, comparability disappears, which is the sole point of a classification. The rule is therefore short: detail may be added, structure may not be redone.
5. Why it is little used
Three reasons, all structural rather than anyone's fault. They follow from how the market is organised.
The standard is not mandatory, so its use depends on agreement. The standard is a paid document that must be obtained from the standardisation centre. And if the client does not require it, a company has no reason to change its internal structure.
The third is decisive, and it leads to the guide's conclusion: the lever for change is the client's requirement. The standard exists, is available and is in force; what is missing is asking for it.
Summary and four practical rules
The construction cost classification standard EVS 885:2005 has been in force since 4 November 2005 and is the latest version, and one of the two drafts behind it was prepared by the Estonian Association of Construction Entrepreneurs. The standard divides costs into structures, which depend on the design solution and its quality requirements, and organisational groups, which depend on the procurement arrangements and the duration of construction. Detail may be added, but the main names and their content may not be changed, since comparability would then disappear.
Four rules: cite the standard by name when requiring a structure. Recall that the entrepreneurs' association was among its initiators. Distinguish structure costs from organisational costs, since different decisions drive them. Do not change position names; add detail at a lower level.
This article offers professional orientation as at the date of verification. It replaces neither a quotation nor the assessment of a competent specialist.