CM - Preliminary Cost Estimate Flashcards
What is a cost estimate?
A prediction of cost based on the basis of available data at a given stage of the project development.
What 5 factors play a role in the cost estimate of a project?
Direct costs, overheads, inflation, contingency and mark up.
What are direct costs?
Materials, labour, equipment, etc.
What are indirect costs?
Costs that cannot be allocated to individual activities, e.g. site management and safety.
What is inflation?
Sustained increase in the general prices and services overtime.
What is contingency?
Amount of money set aside to cover unexxpected costs.
What is mark-up?
The profit
Why do we estimate cost?
For financing and budgeting for the owner and contractor.
As we go from the conceptual estimate, to the preliminary estimate, to the detailed cost estimate, what happens to the accuracy of the estimate?
It is closer to the final value.
What happens to the variation of actual costs from the cost estimaye as project definition increases?
It gets closer to the final project cost.
Prelimanary cost estimates focus on “cost rates per square metres”, what would the equation of cost be in this scenario?
Cost = Cost of building per square metre X floor area
What is the standard measurement of floor area?
Gross internal floor area
What is the gross internal floor area?
The area of a building measured to the internal face of the perimeter walls at each floor level.
How are cost rates defined?
At a point in time, for a specific location, including direct and indirect costs, and mark up.
What is the equation for the preliminary constrution cost?
Cost rate * Floor area * Inflation factor * Location adjustment
What is the equation of the contingency cost?
Construction cost * contingency percentage
What does the total prelimary cost of the project equal?
Construction + contingency cost
What is the equation of the inflation factor?
TPI used at start of construction / TPI used for cost rate in SPON
Why do we have contingency cost?
To allow for risk, unforeseen costs during construction. Judgement is needed on what contingency percentage to use.
