If the initial target is set as a result of competitive tendering, then the employer may feel some assurance that he is obtaining ‘value for money’. But if the target is negotiated or later has to be varied, then the employer may feel that the contractor’s knowledge of his intended methods and costs may enable him to add a margin in the target estimate to safeguard his position. This means that it is improbable that the target cost will ever be lower than the contractor’s privately estimated bottom line price
