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Construction Cost Codes

Construction cost codes are used to help monitor and evaluate a contractor's costs during the course of a construction project. Construction cost codes are numbers assigned to specific job categories: wood used for the frame of the house would have its own cost code, as would the shingles used to finish the construction of the roof. Concrete would be one of the many more construction cost codes. Construction cost codes help keep track of actual costs in comparison to estimates, and are now largely followed by computer programs.

During the traditional bid process, the construction cost codes would cover the amount it would cost a general contractor to build a project, pay its employees and make a small percentage of profit. The codes cover items like concrete for the foundation, cables for electrical wiring, flooring, plumbing, carpentry and HVAC (heating, ventilation and air conditioning). In this case, the agreement does not cover the cost of building or project design, as an architect has been hired by the property owner through a separate contract process.

With the design-build process, the construction cost codes can be more comprehensive and more involved. In this process, an architect and general contractor combine as a team and present a building or project design and construction contractor services in one proposal. The design-build process is used by those who believe an architect-contactor team with a past history of working together would be more efficient and, as a result, cheaper than an architect and contractor working together for the first time.

The construction cost codes used in construction manager at-risk (CM at-risk) project falls in between the two. The architect is hired separately from the general contractor, but the contractor is involved in the project from the pre-construction process all the way through completion. The estimate comes in the form of a guaranteed maximum price, which covers all services rendered from pre-construction through the building process.

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