Protecting Cost Certainty: Taking action to deliver value across the project lifecycle
Consult Australia’s Protecting Cost Certainty examines how risks should be assessed and managed to support cost certainty. The report sets out what is required to deliver cost certainty at each stage of a project, and where current practice falls short.
Consult Australia identifies five actions to help protect cost certainty by improving how risk is managed, how scope is defined and how decisions are made across the project lifecycle. All parties have a role and Consult Australia is committed to working with government and industry to protect cost certainty.
Protecting Cost Certainty is a companion piece to Unravelling Risk. Together, these reports support ongoing reforms to improve risk management across the project lifecycle, lift productivity, strengthen industry culture and support a more sustainable professional indemnity insurance market.
Cost certainty starts with how risk is identified and managed from the outset. Risk is too often considered late in the process, typically at contract stage rather than embedded from the outset of project planning. Risk identification and allocation must begin during planning, before procurement strategy is set and tenders are issued.
Cost certainty depends on the client having complete and verified scope before going to market. Consult Australia’s Unravelling Risk report identifies scoping as a critical reform thread. Incomplete or ambiguous scope is one of the primary drivers of quantity growth, variations, claims and disputes.
Cost certainty requires clear accountability for decisions that affect cost. Ambiguity about who is responsible for what creates uncertainty.
Cost certainty is protected when changes are identified early and managed transparently. Even with rigorous scoping, changes will occur during a project. Design evolves as more information becomes available. Legislative and policy requirements change. Stakeholders shift priorities. These are the realities of complex infrastructure delivery.
Cost certainty is maintained through active, disciplined cost management across the life of the project. Protecting cost certainty requires disciplined processes for cost planning, quantity review, risk pricing and budget reporting that are applied consistently from planning through to final account.