Avoiding construction cost overruns is best accomplished by,
- Getting the front-end of capital investments right, including using reliable reference class information to create unbiased cost estimates. The more localized and granular the information the better. Optimally a locally researched detailed unit price cost book (UPB) is used. The UPB should be updated to include the most recent labor, material, cost,, and productivity information available. The exclusive use of historical information, subcontractor quotes, national average cost data, or parametric estimating do not provide the requisites levels of local market cost visibility and transparency.
- Establishing an integrated and collaborative construction planning, procurement, and project delivery environment within which the incentive structure encourages all involved work to deliver optimal outcomes. All incentives are performance-based and information is clearly communicated to all participants on an early and ongoing basis using a common data/information environment.
