Managing target cost contracts

The use of target cost and cost reimbursable contracts has continued to grow over the last ten years. This is especially the case in the UK: most major programmes of infrastructure work are now undertaken on a target-cost basis.

This UK success has led to international interest in such approaches. Major projects across the Middle East and Asia are now being undertaken under these arrangements.

This section covers:

• how target cost contracts work
• the often over-looked tender assessment process and
• the forecasting of the final outturn cost of a project.

This section is maintained by Ian Heaphy.

RICS standards: Cost prediction

RICS standards: Cost reporting

isurv section: Brief introduction to contracts for infrastructure