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EXAC EXAM 1 > 4 Cost Management > Flashcards

4 Cost Management Flashcards

1
Q

What are the 8 main factors influencing cost?

A 
1 - Economic + Political 
2 - Env. 
3 - Building Type 
4 - Owner / Client 
5 - Proj. Rqrmts 
6 - Proj. Delivery 
7 - Owner Timetable 
8 - Other
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2
Q

What about an economic / political climate might influence costing? (4)

A

1 - Inflation (follow trends / carry allowance)
2 - Market Conditions (ex: low demand = high cost)
3 - Other (unions, exchange rates..)
4 - Political and Social Climate (ex: approval often affected by election timing)

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3
Q

How might Environmental factors influence cost? (3)

A

1 - Site Characteristics (ex: adj. buildings, odd topo or soil, contamination or removal)
2 - Weather / Season (ex: Hoarding = $$$)
3 - Location (ex:urban = $$$ vs suburban and remote=$$$)

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4
Q

How might Characteristics of client owner influence cost? (2 examples)

A
  1. Expert clients (COMMERCIAL / INDUSTRIAL DEVELOPERS)
    - expect at or below budget targets $
  2. INSTITUTIONAL & GVNMTS
    - they impede competition, which drives prices up $$$
    - bureaucratic, long payment time to contractor
    - high standards for long life, insurances, bonds

The architect should consider adjusting the estimate based on the type of organization the client represents.

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5
Q

How might the functional program influence cost? (5)

A
  1. If client changes idea & modifies the scope of project.
  2. Technological evolution, new laws.
  3. Lack of information.
  4. Changes in employees, users of building, etc.
  5. New stakeholders.

The client must confirm program and clarify any unclear requirements. The Arch. must make client aware of additional fees after review

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6
Q

How might the type of construction delivery influence cost? (main 4)

A

Some construction methods are longer, more expensive, etc.

1 - Stipulated Price Contract (Design Bid Build)
• price known before build but many ‘extras’ (changes)

2 - Construction Management
• adds $ for another consultant (and redundancy in services may occur)
• but provides careful monitoring of costs

3 - Design Build
• cost benefit analysis done early
• owner commits to program early

4 - Public Private Partnership (P3)
• ‘best value’ not always achieved (low cost = driver )
• shifts risk to private sector

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7
Q

What sort of REGULATIONS might influence cost? (3 examples)

A
  1. Bureaucratic requirements
    - planning / zoning regulations
  2. Multiple occupancies in same building (Bldg Code)
  3. REMEDIATION standards for hazardous material (asbestos)
  4. Recycling & evacuation of debris fees (LEED)
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8
Q

What are the 4 CLASSES of Cost Estimates and at what phase of an architectural project would each occur?

A

D - Pre-design (Pre-D)
C - SD
B - DD
A - CDs

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9
Q

Define (2) this method of costing and list pros/cons:
CLASSES of COST ESTIMATES

Class A - Construction Documentation
Class B - Design Development
Class C - Schematic design
Class D - Functional program

A
  • arranged by MASTERFORMAT
  • used by CONTRACTORs for tenders

+ easy to retrieve info
+ info CURRENT / RELIABLE
- rqrs estimator with DESIGN+CONST. experience

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10
Q

Define the ELEMENTAL COSTS method of costing and list pros (2) / cons (1):

A

Tries to give initial cost of building, based on different building structures (foundations, walls, structure). The costs are established from previous jobs. The building structures can be seen as “assemblies” that represent unitary costs more or less equivalent once evaluated over the total cost of the building.

+ process can proceed without drawings
+ useful during DESIGN
- hard to VERIFY

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11
Q

What is AREA costing?

Who uses the AREA (cost/m2) method of costing? What stage of design?

List pros (4) / cons (2)

A

Calculate based on area of building. Each component’s cost is easy to calculate.

• used by architects for general costing at Pre-design phase

+ floor area EASY for all building types
+ EASY for all to understand
+ easy to calculate
+ simplified historic info

  • does not account for unique conditions
  • simplistic, can be misinterpreted
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12
Q

What is the VOLUME (cost/m3) method of costing used for (3):

A

Calculate based on volume, rarely used. Used as double check against other costing.

  • warehousing / refrigeration
  • multi-storey buildings where area calculations are not adequate
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13
Q

What is and when is the UNIT (cost/bed, seat, etc) method of costing used:

A

Calculate based on bed /seat etc. Uses simplified historic values. Use at early design stages (preliminary budgeting) as quick reference.

Only to use if projects are similar. The circumstances, location & date of construction can change the historic value, even if projects look identical.

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14
Q

What are the 6 steps of value analysis? Should the architect perform it? When should it be done?

A 
1 - COLLECT data
2 - functional ANALYSIS (how is it performing)
3 - ALTERNATE options
4 - ASSESS feasibility of options
5 - RECOMMEND 
6 - IMPLEMENT + monitor

This is NOT a basic architectural service. It should be done EARLY in the design process - schematic design phase.

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15
Q

When using Hanscomb Yardstick for Costing Estimates, what can you assume about construction type and the labour force?

A

It excludes residential construction, and the labour force is unionized.
(unit pricing typically 20-30% less for residential)

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16
Q

Is Hanscomb Yardstick for Costing a good resource for contractors when bidding?

A

No, it is best for estimating costs during design.

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17
Q

The costs and rates in Hanscomb yardstick for Costing reflect the following factors if compared between the different locations: (4)

A
  • Building code requirements
  • Local market conditions
  • Differential labour productivity
  • Supervision and management costs
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18
Q

When referring to the GROSS building costs in Hanscomb Yardstick for Costing, do the numbers define local or national conditions?

A

While the Current Market Conditions are represented for 8 major cities across Canada, the gross building costs are based on the Toronto market + must be adjusted for local conditions.

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19
Q

When should composite unit rate be used?

A

During early design phases for Elemental Cost Estimates. Much faster than current market pricing.

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20
Q

The CIQs (Canadian Institute of Quantity Surveyors) List of Elements for Composite Unit Rates are grouped into A, B, C, D, and Z. What type of elements or group of pricing information is in each of these 5 groups.

A

A - SHELL (A1 Substructure, A2 Structure, A3 Exterior Enclosure
B - INTERIORS (B1 Partitions + Doors)
C - SERVICES (C1 Mech, C2 Elec)
D - SITE + ANCILLARY WORK (D1 Site Work)
Z - GEN RQRs + ALLOWS (Z1 Gen rqrs + fees, Z2 Allowances)

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21
Q

Which method of estimating is best suited to the current market rates found in Yardsticks?

A

Classes of Estimates - arranged into Masterformat divisions.

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22
Q

What do the solid and dotted lines in the current market rates of Yardsticks represent?

A

……….supply only

____install only

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23
Q

When using the current market rates found in Yardsticks is it safe to assume that provincial and federal taxes are included?

A

Provincial taxes are included where applicable (not Quebec) but GST/HST are EXCLUDED.

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24
Q

Who might use the Gross BLDG. Costs found in Yardsticks?

A

Architects typically use the Area Cost method with Gross BLDG. Costs for very quick estimates.

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25
Q

What 3 costs are shown for each building type in the Gross BLDG. Costs found in Yardsticks.

A

Low
Ave
High

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26
Q

In Yardsticks, how is the information in the Gross BLDG. Costs organized?

A

By type and then by element

A shell, B Interiors, C services, D Site+Ancillary

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27
Q

What type of elements has been excluded from Gross BLDG. Costs in Yardsticks?

A

Site work - due to wide variation.

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28
Q

When critiquing a client’s budget VS the PROGRAM what should the architect consider? (5)

A 
(enough $?)
1 - cost/m2
2 - SME systems
3 - Proj. Delivery Method
4 - Unusual Site Conditions / Location / Weather
5 - Client's Vision + Aspirations
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29
Q

When critiquing a client’s budget VS the CONDITIONS OF COMPLETION what should the architect consider? (4)

A

1 - Pre-Design / Programming
2 - Coord of SME
3 - Commissioning
4 - Post Project Evaluation

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30
Q

What is the CPI and who typically publishes it?

A

Cost Price Index, published by Gov. Agencies + Private Companies
(shows trends)

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31
Q

Define Construction Costs.

A

HARD Costs: materials / labour (excl. land purchase)

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32
Q

Define Project Costs.

A

HARD + SOFT (inc. consultant fees + land purchase)

33
Q

Overall Costs

A

HARD + SOFT + OTHER: interest / mkting / legal etc

34
Q

Life Cycle Costs - Global cost

A

CAPITAL (inc. land purchase) + OPERATING + MAINTENANCE

35
Q

If the lowest bid exceeds the estimate by more than 15% during tender, what action should be taken by the architect according to RAIC Doc 6?

A
  • INCREASE PROJECT BUDGET
  • have all GCs RE-BID or NEGOTIATE w low bid
  • MODIFY CDs to reduce construction costs (***for no add. fee)
36
Q 
Match each of the following building types to the appropriate price bracket ($/SF). 
up to 100, 101-200, 201-300, 301-400
Elementary School
Warehouse     
Regional Hospital
Fire Station
A 
• up to 100
Warehouse  
• 101-200
Elementary School
• 201-300
Fire Station
• 301-400    
Regional Hospital
37
Q

What types of contingency needs to be put on costing during different phases of project?

A

Two types, distinguish in estimate: design contingency and construction contingency

Early stages : 25%
Construction documents: 2%-5%

Renovation works - higher contingency

38
Q

Quick Start in cost estimate Yardstick book?

A
  1. Scope of project
  2. Quantify the items , number of units required for each work - allowance for waste*
  3. unit price
  4. Multiply total O&P x quantity
  5. Project overhead - Div 1 or % of the project cost
  6. Estimate summary- GC markup, GC overhead and profit, sales tax

*** adjust estimate to project location using Cost City Index or Location Factor

39
Q

What is Daily output and Labor-hours?

A

Daily output: amount of work the crew is expected to do in a day
Labor-hours: amount of time it will take for the crew to install one unit of work

40
Q

Does Yardstick price subcontractor or GC work?

A

Pricing is for subcontractor work.

You need to add:

  • project overhead (5%-15%, average of 10%) or,
  • GC markups on subs work (10%), GC O&P (10%), contingency (3%-5% final dwgs, 5%-10% for budget), location factor (divide number by 100 before multiplying it), bonds
41
Q

When do you use City Cost Indexes & when do you use Location Factors?

A

Location Factors : estimate totals if project has multiple trades

City Cost Indexes : single trade projects, or more detailed analysis

42
Q

How do you include sales tax in estimate?

A

Sales tax can be added to :
Material cost, equipment cost, subcontracted work (50% assumed to be material)

*** cannot be applied on labor costs

43
Q

How does inflation affect cost?

A

Construction industry is cyclical & inflation is a repetitive phenomenon.

Cost impact :

  • Labour
  • Materials
  • Raise of interest rates
  • Cost of land
44
Q

How can market conditions affect cost?

A

If a period with high remand in industry, the offers can be unreasonable.

In reverse, during recession:

  • prices drop
  • the lack of labor or materials can increase the cost.
45
Q

Identify 4 economic factors that can influence the cost of work.

A
  1. Syndicals of the workers
  2. Interest rates at the loan
  3. High demand of certain materials
  4. Exchange rate (if imported)
46
Q

How can the terrain characteristics influence cost? (6)

A
  1. Difficult topography
  2. Built elements or natural characteristics
  3. Abnormal soil conditions
  4. Presence of dangerous materials
  5. Soil Contamination
  6. Adjacent buildings
47
Q

How can location influence cost? (4)

A
  1. Project in suburb less expensive than downtown:
    • Parking
    • Congestion : waste of time, delay to delivery
    • Harder bylaws
  2. Lack of qualified workforce in remote regions
  3. Distance from material sources.
  4. Distance from recycling / dumping areas.
48
Q

How do usage & configuration of building affect cost ? (9)

A
  1. Conformity to National Building Code
  2. Construction method: wood / concrete / steel
  3. Height /number of stories
  4. Building Shape (compact building is less expensive than a large / rectangular building)
  5. Finishes
  6. Choice of structure, mechanical, electrical systems
  7. Planned life of structure
  8. Choice of components (common vs ordered to fit)
  9. Sustainable design requirements
49
Q

How does the responsibility & schedule of the owner influence cost? (4)

A
  1. Acceleration of the schedule, to respect the client’s deadline.
  2. Delay of start of construction due to inflation or exchange rate changes.
  3. Approval process
  4. Delay of start of construction for independent reasons ( winter conditions, etc)
50
Q

How do strange or difficult work conditions affect cost? (5)

A
  1. If the building remains functional (additional hours)
  2. Increased cleaning requirements.
  3. Limit on hours of operation of equipment
  4. Unusual work sequence.
  5. Demolition of existing constructions.
51
Q

Why the architect should never guarantee a budget? What would be the consequence?

A

The market conditions are very VARIABLE.

Such a warranty would cancel the professional liability insurance of the architect.

52
Q

What are the types of estimation? (5)

A
  1. Classes of cost estimates (Classes A to D)
  2. Elemental costs
  3. Area (price per sq.m. or sq.ft)
  4. Volume (price per m.cu)
  5. Unit of use (price per bed)
53
Q

What stage of project should we apply Class D estimate?

A

Functional programming

54
Q

Class D Estimate: characteristics? (3)

A
  1. Prepared before sketch, based on program & past data.
  2. Adjusted to take into account:
    • inflation
    • location
    • quality
    • dimensions
    • schedule
  3. Gives an approximate order of magnitude of cost.
55
Q

Class D Estimate: contingency?

A

20%

56
Q

What stage of project should we apply Class C estimate?

A

Schematic design

57
Q

Class C Estimate: characteristics? (3)

A
  1. Prepared with preliminary drawings
  2. Based on type of construction & material quantities
  3. High contingency in case of change of scope.
58
Q

Class C Estimate: contingency?

A

15%

59
Q

What stage of project should we apply Class B estimate?

A

Design Development

60
Q

Class B Estimate: characteristics? (2)

A
  1. Same as Class C but more detailed.

2. Contingency can be reduced because incertitude has dropped.

61
Q

Class B Estimate: contingency?

A

10%

62
Q

What stage of project should we apply Class A estimate?

A

Construction Documentation

63
Q

Class A Estimate: characteristics? (1)

A
  1. Based on final construction documents, on the schedule of construction & the exact price of the trades and materials.
64
Q

Class A Estimate: contingency?

A

5%

65
Q

When should we use elemental costing : which phase, why?

A

Used a lot during preliminary phases:

  1. Need to know approximate dimensions of building.
  2. Need to have important quantity of well analyzed data to use this method.
66
Q

Which type of classification is used in elemental costing? How does she group materials?

A

By convention, the assemblies are presented under UNIFORMAT II. This allows standardization of estimates.
RS Means uses this classification, grouped by assemblies.

67
Q

Identify different categories of elemental costing (UNIFORMAT II)?

A 
A. Foundation
B. Superstructure & exterior envelope
C. Interior construction
D. Services (transportation devices, plumbing, HVAC, FP, elec)
E. Furniture & Equipment
F. Special construction & demolition
G. Site & Ancilliary work
Z. Special conditions (contingency, general fees, profit, phasing, tax, etc)
68
Q

Who can do an estimation (3)?

A
  1. Quantity surveyors
  2. Construction managers, developers, builders
  3. Construction cost index pricing. (RS Means)
69
Q

Quantity surveyors: advantages (3) & inconvenient (2)

A

+ independent professional
+ complete data
+ comparable projects

  • unitary pricing based on historic data, less real than construction industry
  • discrepancies between trades: some info are not detailed.
70
Q

Construction managers, developers, builders: advantages (3) & inconvenient (3)

A

+ reliable unitary costs
+ current information
+ check on trends & are aware of construction cost dynamics

  • don’t have global vision of project
  • specialized knowledge not adaptable to new situations
  • some of them have personal interests & commercial motivations
71
Q

Construction managers, developers, builders: why should we pay them to help?

A

Free sources are not reliable.

72
Q

Construction cost index pricing: examples?

A
  1. Published by governments & private companies
  2. Useful guides for trends.
  3. Info can be delayed by several months.
  4. Info is reliable, complete, good quality if used with restrictions & safety factors as indicated.
  5. Info is provided by the contractors (real projects from previous year).
73
Q

Capital cost

A

Total construction cost, including land, fees, funding.

74
Q

Operation cost

A

Cost of the use of building during its life (lighting, energy, administration, insurance)

75
Q

Maintenance cost

A

Cost for repair & replacement

76
Q

Match each of the phases of a construction project to the corresponding estimating method and then select the appropriate answer. The same estimating method may be used more than once.

Project phase

1) The functional and technical program for a residential-care centre with 126 beds
2) The budget validation of the construction documents for a new bank branch
3) The schematic design for a 100-m2 addition to a residence with a clay-brick cladding

Cost estimation method

a) Elemental cost
b) Area
c) Volume
d) Unit use

A)  1a, 2c, 3b
B)  1b, 2a, 3c
C)  1b, 2c, 3c
D)  1d, 2a, 3b
E)  1d, 2c, 3c
A

D) 1d, 2a, 3b

77
Q

The owners of a new office building have indicated they wish to have their building LEED certified. What effect might this decision have on the cost of design services?

a. the archtiect’ fees will increase, but those of consultants will remain the same
b. the archtiect’s fees will remain the same, but those of consultants will increase
c. both the architect’s and consultant’s fees will increase
d. there will be no change in the cost of design services

A

c. both the architect’s and consultant’s fees will increase

78
Q

Methods employed by architect for estimating the cost of construction include all of the following except:

a. area and volume estimates
b. subsystem estimates
c. cost per unit
d. quantity and cost method

A

d. quantity and cost method

This includes an item by item accounting of each product or material used and are typically outside the scope of architectural services

79
Q

The architect must prepare cost estimates for the project during what phases?

A

schematic, design development, and construction documents phases

EXAC EXAM 1 (15 decks)

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