Final budget

A final budget is the budget set at the procurement stage, which forms the basis of the implementation proposal and the contract.

The final budget is prepared at the procurement stage, once the budget has already been approved. Even then, it is still worth analysing alternatives: alternative equipment, its suppliers or the installation methods for individual components. Pricing these alternatives makes it possible to optimise costs within the approved budget without lowering the technical specifications of the installation.

Negotiations also take place at this stage and further shape the final budget. The final budget forms the basis of the implementation proposal and the contract for carrying out the work or delivering the investment project. In the table in the article, it is referred to as the “final budget with option pricing”.

Example: An investor has an approved budget to replace a sauce preparation tank in a pet food plant. Before procurement, the system integrator compares agitators from two manufacturers with the same technical specifications and prices two installation methods for the piping. Together with the investor, they select solutions that lower the cost without compromising the installation’s performance. After negotiations, the final budget is drawn up, on the basis of which the integrator prepares the implementation proposal, and the parties sign the contract for delivery.