Eletrical Systems Procurment by Means of Target Costing

Kari Siren1 & Ari Pennanen2

1Kari Siren. Managing Director , Electrical Technology Ltd Kari Siren (Sähkötekniikka Oy Kari Siren), Finland
2Adjunct Professor (Tampere University of Technology). Partner of Haahtela Project Management Group, Finland. ari.pennanen@haahtela.fi. www.haahtela.fi


Electrical systems are typically procured through detailed drawings and specifications. In the case of an intense project timetable, the procurement process lacks time to commit the potential suppliers to the project and to compile precise and detailed design and bidding documents. This paper introduces methodology for preparing the tendering documents directly from the performance criteria set for electrical systems before the electrical design commences. In Finland, target costing methodology in construction is based on a constructive Building Information Model (BIM) prior design. Component-level target costing uses performance criteria set for the spaces (such as 400 lux lighting) as initial information. The result with a BIM design is a priced bill of quantities that indicates the target cost for the future design process. In this paper, it has been used as a tendering document before the start of design. For the most part, HVACE systems are composed of a producing element, a linking element, and a functional element. For instance, the elements in lighting are the switchboards, cables, and luminaires, and those in cooling are cooling units, pipes, and cooling beams. These elements can be modelled through building-informationmodelling- based prior design. In the case studies of this paper, the electrical systems suppliers were selected before the electrical design. The suppliers have given positive feedback because of the ease of tendering, opportunity to participate in the design, and possibility to schedule the work on their sites earlier. Managing the changing quantities in the contracts has been possible because of the unit pricing for costs. The target costing process and design steering during the design have ensured successful cost management.


Lean construction, open building, building flexibility, procurement, cost modelling, target costing, electrical systems.



Siren, K. & Pennanen, A. 2013, 'Eletrical Systems Procurment by Means of Target Costing' In:, Formoso, C.T. & Tzortzopoulos, P., 21th Annual Conference of the International Group for Lean Construction. Fortaleza, Brazil, 31-2 Aug 2013. pp 145-154

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