Levels of Performance

Each higher level of performance gives the client increasing control of project cost.

Level 0 Provide a safe project budget and update it at the completion of each phase.

This approach is fairly common. While it protects the client from exceeding a budget without foreknowledge, it provides protection after the fact - like a morning after pill.
Level 1 Provide a realistic project budget and update it at each phaseplus ensure that the project costs do not exceed 110% of the budget.
Level 2 Level 1 plus control project costs to within 10% of the budget.

When monies are set aside for a project they represent the value that the organization places on the project. If estimating by the design professional is so safe that a significant amount of the budget goes unspent, the desired improvements may not be realized -- sacrificed to inaccurate cost information.
Level 3

Level 2 plus manage the project design and engineering to maximize benefits.

That is, value engineer to reduce life cycle costs or bottom line impacts in terms of initial costs, or present value of future cash flows, or to increase internal rate of return or operating efficiency of the user department.

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