https://doi.org/10.24928/2021/0131

Development of Target Cost for a High-Performance Building

Atle Engebø1, Olav Torp2 & Ola Lædre3

1PhD candidate, Norwegian University of Science and Technology (NTNU), Trondheim, Norway, +47 905 719 02, [email protected], orcid.org/0000-0002-5293-0176
2Associate Professor, Norwegian University of Science and Technology (NTNU), Trondheim, Norway, +47 934 226 73, [email protected], orcid.org/0000-0002-1916-5097
3Professor, dr. ing. , Department of Civil and Environmental Engineering, The Norwegian University of Science and Technology (NTNU), [email protected], orcid.org/0000-0003-4604-8299

Abstract

Target costing aims at making both cost and value to drivers for design. Still, few have studied how this is done in a high-performance building project, where a set of parameters beyond the typical cost, schedule, and quality parameters are optimised. Here we explore how a construction project team collaborated to reach the owner's allowable cost during design using observations and document study. The findings show that the owner should precisely describe expectations before starting Target Value Design. If not, the owner will get disengaged or develop suspicion towards provided cost estimates. Furthermore, we argue that the typical development of expected cost can inhibit a high-performing design team. The expected cost typically starts at the owner's allowable cost, increases drastically during design, and has to be substantially reduced. The consequence is that a highperforming team's mood moves from optimism towards realism and eventually into a realm where challenges occur. The domain where challenges arise is when the project team must substantially reduce the expected cost to reach an acceptable level. To remain high-performing throughout, the project team should avoid a drastic increase in expected cost in the initial stages.

Keywords

Target cost, Target Value Design, collaboration, team development

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Reference

Engebø, A. , Torp, O. & Lædre, O. 2021, 'Development of Target Cost for a High-Performance Building' In:, Proc. 29th Annual Conference of the International Group for Lean Construction (IGLC). Lima, Peru, 14-16 Jul 2021. pp 3-12

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