The approximate budget of the proyecto básico: what it is worth

The Código Técnico de la Edificación (the Technical Building Code, CTE, Royal Decree 314/2006) draws a clear line between the two designs. Its article 6 provides that "the proyecto básico shall define the general characteristics of the works" (unofficial translation), that it is enough to apply for the licence but not to build, and that "the proyecto de ejecución shall develop the proyecto básico". The content of both is described in the articles on the basic design and on preliminary studies and the outline design.

On cost, Annex I to Part I of the CTE, which lists the content of the design and is worded as amended by Royal Decree 173/2010, includes a presupuesto aproximado (approximate budget) and describes it as an "approximate valuation of the material execution of the designed works, by trade section" (ejecución material, the net works cost), among the contents marked with an asterisk that the proyecto básico must include as a minimum. Itemised quantities and the detailed budget by trade section appear in the same annex as content of the design, without an asterisk, that is, without forming part of that minimum.

The practical consequence is simple. The minimum to expect from the proyecto básico is an approximation of the net works cost, and the level of detail of that approximation depends on what the client asked for in the appointment.

The net works cost is the cost of the works themselves, without the contractor's costs or the client's costs. In public works, the General Regulation of the Public Administration Contracts Act (RGLCAP, art. 131) defines the presupuesto de ejecución material (PEM, the net works budget) as "the sum of the products of the number of each unit of work by its unit price and of the lump-sum items". It is a good structural reference in private works too: the approximate budget lacks, by definition, the layers that turn the net works cost into a contract price and then into a total cost.

Item	In the approximate budget?	Who adds it
Units of work of the building as designed	Yes, valued approximately	designer
Provisional sums still to be defined	Sometimes, and without detail	designer; the client should ask for the list
Contractor's overheads and profit	No	client, or the contractor's bid
Site works, demolition, utility connections	Only if the appointment includes them	client, who should check
Design and site supervision fees	No	client
Surveys, licences, taxes, insurance	No	client
Financing and VAT	No	client
Contingency reserve	No	client

The risk lies not in what the figure excludes by definition, but in what it excludes without saying so. An approximate budget that does not cover the site works on the plot or the special installations in the brief is correct as a valuation of what has been drawn, but it leaves out items the client will pay for anyway.

It is worth using to check that the design fits within the order of magnitude of the budget. If the approximate budget, once completed with what it lacks, already exceeds the works line of the client's budget, the proyecto de ejecución (detailed design) will not correct it: it will detail it. This is the last moment when changing the brief or the construction solutions is cheap.

It is not a contract price. Bids are requested on measurements and a detailed budget, not on an overall valuation. Asking for a fixed price on a proyecto básico shifts the lack of definition onto the contractor, who charges for it or claims it later.

It is not a commitment by the architect, unless agreed. The texts reviewed do not show a general obligation on the architect to design within a budget; if the client wants the approximate budget to be binding, it must write into the appointment a target budget, its date and a tolerance.

A useful approximate budget is delivered with its data sheet. Six items are enough to turn a stand-alone figure into a valuation that can be checked.

Item	Question it answers	Why it matters
Scope	which works does it include and which not?	identifies the items the client will add
Method	valuation by floor area, by building system or by trade section with simplified quantities?	indicates the degree of uncertainty
Price date	prices from which month?	allows it to be updated and compared
Price database	where do the prices come from?	allows them to be cross-checked
Specification assumptions	which finishes, installations and level of performance does it assume?	prevents the budget rising as specifications are settled
Provisional sums	what remains undefined, and for how much?	measures what can still move

The structure of the budget should be the same from one stage to the next. If the proyecto básico is priced by major building systems and the detailed design by trade sections, the client will not be able to see where the cost has grown. Organisation by trade sections is explained in the article on the structure of a construction budget.

The approximate budget is compared with the works line of the client's budget, never with the total. That takes three steps: complete the scope, add the contractor's costs to obtain an estimated contract price, and place the result within the total cost. The order in which each item of the total cost becomes certain is covered in the article from works budget to total development cost.

Fictitious example. A client has set aside 2,200,000 euros, excluding VAT, for the contract price of the works. The proyecto básico arrives with an approximate net works budget of 1,800,000 euros. The data sheet reveals that internal site works are not included; the client values them at 150,000 euros of net works cost. The complete net works cost is therefore 1,950,000 euros. The client estimates the contractor's overheads and profit for this job at 312,000 euros. The estimated contract price is 2,262,000 euros, excluding VAT: 62,000 euros above the sum set aside, before any contingency reserve.

The example shows why the raw figure misleads. Read on its own, the approximate budget (1,800,000 euros) seemed to leave a comfortable margin against 2,200,000 euros. Once completed, the design is already over. The decision is taken now, at the proyecto básico stage, and follows the method in the article on what to do when the design estimate exceeds the client's budget.

An approximate valuation carries a margin of error that nobody writes down. There is no official accuracy percentage for this stage, and it is unwise to invent one. What is useful is to ask the designer to identify the most uncertain items (foundations without a geotechnical survey, installations not yet sized, provisional sums) and to say, for each one, what its amount depends on.

That list feeds the client's reserve. The longer it is, the larger the contingency reserve should be at this stage, and the more it matters that the detailed design resolves those uncertainties first. Each item resolved narrows the margin and allows part of the reserve to be released or reallocated.