Hidden Cost Exposure
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Case Details
Project Type
High-End Residential Development
Project Stage
Pre-Construction Cost Planning
Service Focus
Digital Cost Planning & Quantity Verification
Risk Category
Cost Planning
Advisory Area
Commercial Cost Exposure
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Hidden Cost Exposure in Early Cost Planning
Early stage construction cost planning often relies on preliminary architectural drawings and incomplete design coordination. While early budgets may appear commercially viable, hidden discrepancies within quantities, specifications and design information can create significant cost exposure before procurement begins.
In this scenario a residential development project progressed into early procurement with a cost plan prepared from concept design information. The cost plan had been based on approximate quantities and preliminary assumptions regarding structural elements, internal layouts and building services.
Although the budget appeared stable, a digital quantity verification review identified inconsistencies between architectural drawings, schedules and measured quantities. Several key construction elements had been underestimated due to simplified assumptions within the initial cost plan.
Without early review these discrepancies could have resulted in substantial cost variations during contractor tendering and later construction delivery.
Advisory Approach
Reltic applied a structured digital construction analysis combining quantity verification, cost planning review and procurement risk assessment.
The advisory process focused on three key areas:
- Verification of quantities derived from architectural drawings
- Identification of inconsistencies between drawings and specifications
- Review of procurement assumptions affecting contractor pricing
Using digital quantity analysis tools, the project information was reviewed in order to identify areas where cost assumptions were inconsistent with the actual scope implied by the design documentation.
This process helped clarify the relationship between project scope, quantities and the cost plan before procurement decisions were finalised.
Commercial Analysis
The digital review identified multiple discrepancies within the original cost planning assumptions. Several construction packages including structural works, internal finishes and building services had been underestimated due to incomplete design coordination.
The analysis revealed that certain quantities derived from early drawings did not fully reflect the actual construction scope required for delivery.
By restructuring the quantity analysis and aligning the cost plan with verified quantities, the development team gained a clearer understanding of construction cost exposure before contractor tendering.
One significant aspect of the transformation involved the consolidation of the IT organizations of both companies. Prior to the merger, these IT departments had underperformed and lacked prior experience.
Data Analysis Chart
The Results
Our involvement in supporting the Company merger extended over a comprehensive three-year period, encompassing activities ranging from pre-merger due diligence to post-closing strategy.
Customer Reviews of the Case
Giles and his team at Herrington Business Consulting have been absolutely great to work with and they definitely have gone above and beyond for us by streamlining all of our accounts so that we can focus on what we do love to do and continue to grow our business. Morbi venenatis ut sapien eu lobortis.
