Keeping control of costs is crucial for any construction project. Managing the pounds and pennies properly, right from the start, will mean that you can avoid budget blowouts as the job progresses.
Preliminaries are a collection of estimated costs for preparatory work and materials for a construction project as well as ongoing costs. In this article, we look at exactly what preliminaries are in construction.
What are Prelims in Construction? A Quick Guide
When a construction job is put up for tender, companies compete for the work by providing bids that show how much they’ll charge to get the project done. This information is compiled in a document known as a bill of quantities (BOQ). In the BOQ, all the projected costs are itemised and totalled. These costs encompass everything that the construction company must pay for before and during a project but will not necessarily be included in the finished building.
Site-specific expenditures are called preliminary costs. Preliminaries are directly related to the operation and administration of the construction site. They are usually between 11% and 15% of the total cost of a construction project, although in some cases they can be higher.
What Do Preliminaries In Construction Mean?
Preliminaries, or prelims as they are known, can include any expected costs incurred before and throughout the project related to running and managing the construction site. Often, a site owner will put forward a list of preliminary expenses. However, it’s always best if the contractor draws up the final tally of preliminary costs as they will have a better idea of what will be needed to finish the job on time and within budget.
What Might Preliminaries Include for a Typical Construction Job?
Prelims cover materials, labour, equipment, and services. They can be paid as one-time-only costs or ongoing costs that will last the length of the project. Everything is included in the prelims, from ensuring that the work site has an electricity supply to getting the right council permits to providing the site has security.
Each construction job will have its own quirky and unique requirements, so it’s impossible to develop a ‘one size fits all’ template. However, some generalisations can be made when working out what are preliminaries in construction projects.
Usually, preliminary costs are categorised as follows:
- Initial costs
- Ongoing costs
- Final costs
Within these categories, there are four main types of preliminary costs:
- Planning and design costs
- Mock-ups, testing and sampling costs
- Administration and management costs
- Site-based costs
We’ll now look at each in detail to better understand what’s involved in these preliminary costs.
Costs for Planning and Design Services
Whether you’re building a garden shed or a multi-storey office building, a construction project needs to be planned and designed carefully.
- Contractors must allocate tasks, create and maintain work schedules and report on progress
- The planning and design processes can span many work sections
- All costs involved in planning and design must be estimated as accurately as possible and listed in detail
Mock-ups, Testing and Sampling Costs
No one wants to buy something without seeing it first. Owners and construction companies require outside contractors to supply mock-ups of the project’s appearance when finished. The mock-ups can include:
- Physical models
- Intricate drawings and plans
- 3D digital models
Whatever form they come in, mock-ups are going to cost money to produce.
Contractors often also need to have materials and equipment tested to be sure they’ll be fit for purpose. For example, lumber is commonly tested for moisture levels and concrete undergoes slump testing.
Administration and Management Costs
Construction work involves more than just swinging hammers. As well as the physical side, much paper pushing must be done on a construction job. Admin and management are costs that last from the start till the end of a project.
Management and administration costs include:
- Council permits
- Staff payrolls
- Hiring equipment
It’s essential to be as transparent as possible when itemising these costs.
Costs for Site-Based Services
Every construction site requires a range of site-specific services, amenities and utilities ranging from power to water to access roads and facilities for staff. Work may need to be done to control erosion caused by excavation, or costs may be incurred from damage to adjacent buildings or complaints from neighbours.
How to Keep Your Construction Job on Budget
Accurately calculating and documenting a construction job’s preliminary costs is crucial. No matter how insignificant, every task or service must be anticipated, costed and included on the BOQ. If you don’t have a well-thought-out and detailed list of preliminaries, your project could have significant cost blowouts and delays.
Recent examples of unforeseen costs causing colossal budget overruns and delays include slowdowns in substantial projects like the HS2 high-speed railway project (Which has gone over its budget by an estimated £100 billion), and the Lower Thames Crossing project (Initially estimated at a cost of £7 billion but is now estimated to cost £9 billion or more).
Many contractors use professional third parties to help them calculate their preliminary costs to avoid these types of catastrophes. Others use specialised software or numbered templates to assist them in staying on track with their preliminary costs.
As the above projects illustrate, some costs are tough to anticipate. Competent contractors try to take measures to prepare for any eventuality. For example, if an employee has an accident or injures a member of the public, your project could face cost overruns and delays.
A construction risk assessment will help you avoid these types of incidents. It’s worth remembering that a risk assessment is also a legal duty on every construction site, as mandated by the Health and Safety at Work etc. Act 1974.
Where to Find Risk Assessment Training
Construction professionals can learn everything they need about risk assessments in our RAMS in Construction for Frontline Employees course. This certified course can be taken online whenever you have some time available. You don’t have to disrupt your work schedule to attend classroom training. This course will help you and your employees meet legal obligations and ensure safe work sites.