Cost Estimating

Question 1

What is the purpose of an OCE

Answer 1

The purpose of an order of cost estimate is to establish if a proposed building project is affordable and, if affordable, to establish a realistic cost limit. The cost limit is the maximum expenditure that the employer is prepared to make in relation to the completed project, which will be managed by the project team (i.e. authorised budget).

Question 2

What types of OCE can you produce

Answer 2

Floor area - £/m2 GIFA
Functional unit - £/NIA (for offices), £/Unit for Resi, £/Key for Hotel
Elemental – Substructure, Frame £/m2, etc

Question 3

What typical things would you include within your OCE

Answer 3

• Project title
• Project description
• A statement of cost/Executive (including cost limit)
• Basis of cost estimates (i.e. assumptions)
• Any Information Used
• Elemental breakdown of cost (if elemental OCE being produced)
• Details of the information and specification on which the cost plan was prepared
• Estimated costs of and a request for decisions on any alternative proposals (i.e. summary of option costs)
• exclusions (i.e. a clear and unambiguous statement of what is included in and excluded from the order of cost estimate).

Question 4

What information would typically be required for an OCE

Answer 4

− Drawings - Floor plans, roof plans, elevations and sections
− Area schedules
− Indicative specification/design intent
− Project constraints (site, planning, etc)

Question 5

How would you measure facilitating works within your OCE

Answer 5

Normally done on a site area basis

Question 6

How would you include Main Contractors OHP?

Answer 6

The cost of main contractor’s OH&P as a % of the total cost of construction works and costs of main contractor’s preliminaries.

Question 7

Can you name some typical exclusions from your estimate

Answer 7

Legal costs, land acquisition costs, planning costs such as S106 or S278, VAT

Question 8

Can you name some typical assumptions from your estimate

Answer 8

Assumed wall to floor, net to gross ratios agreed with Architect

Question 9

What is the % error on an estimate?

Answer 9

10%

Question 10

Name the elemental structure of a cost plan?

Answer 10

Facilitating Works
Substructure – excavation and substructure
Superstructure – frame, upper floors, external walls, roof, internal finishes
FFE
Services
External works
Prelims
OHP
Risk

Question 11

What are construction preliminaries

Answer 11

Items which are necessary for the contractor to complete the works, but will not actually become part of the works

Question 12

Name some preliminaries sections

Answer 12

Fixed
Time related

Question 13

What should be considered when assessing preliminaries levels?

Answer 13

a) Length of contract
b) Location – accessibility, space restrictions, accommodation possibilities etc
c) Type of project – new build / refurb, tower / one story etc
d) Size of project
e) Need for temporary works
f) Need for security
g) Limitations on method and sequencing of works, working hours – supervision requirements
h) Sectional completion

Question 14

What would you consider when benchmarking? And how might you benchmark?

Answer 14

Use £/m2, £/unit, £/sq.ft

Location
Time
Abnormals
Procurement
Tender strategy
Type of Contract