6.2 Progress Claim Cost Based (06020m)

This process requires the project manager to complete the Project Review Cost & Processes [7.1] as this will provide the client with an updated project status, including cost at completion. (The amount of money the client needs to complete the project).

A Cost Based project should also be associated with a complementary project.

"Too often, the client just wants extras without understanding the cost implications and all projects have a value above which client pain will occur. The client pain is usually transferred into contractor pain as they start disputing everything to contain the project costs.  Early identification of cost variations, even with Ballpark Values, will force the client to expose their limit and then allow a joint process to identify the best mix of variations within that limit. This will considerably reduce project administration on changes  that are not going to be paid."

To reduce misconception in the client and contractor's minds, we recommend that the client project includes all project income items and then treats those elements that are agreed as fixed management fee expenses (Allocations 1157-1159) . Likewise if project invoice is paid by the client from a number of "buckets", by separate AR invoice (Allocations 1151-1159), thereby all the project income is cleared through the one project, providing a clear picture of the project cost structure.

1. Project/Order
2. Allocation
3. Order
4. Claim number
5. Claim date
6. Due date
7. G.S.T code 321