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RICS Questions > Cost Estimating/ Planning > Flashcards

Cost Estimating/ Planning Flashcards

1
Q

What types of estimate are there?

A

a) Budget / feasibility
b) Cost estimate
c) Cost plan

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2
Q

What is a feasibility estimate?

A
  • A high level exercise to assess whether a project is financially viable and to set an outline budget for the scheme
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3
Q

What is the format of a feasibility / budget estimate?

A
  • Rate per m2 or per functional unit

- May be presented as a range

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4
Q

What is a functional unit?

A
  • The ‘factors which express the intended use of the building better than any other’
  • E.g. number of bedrooms in a hotel, number of beds in a hospital
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5
Q

What information do you need to be able to carry out a feasibility estimate?

A
  • Type of building (function)
  • New build, extension or refurb
  • Location
  • Size
  • Indication of quality
  • Site visit
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6
Q

What is the % error on a feasibility estimate?

A

10%

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7
Q

What is a cost estimate?

A

A forecast of the possible cost of a building based on historical data

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8
Q

What are the principal components of a cost estimate?

A
  • Construction cost
  • Preliminaries
  • Contractor’s OH&P
  • Contingency
  • Inflation
  • Assumptions - programme
  • Exclusions
  • Area Schedule
  • Basis of Estimate – drawings / specifications list
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9
Q

Name the main elements of an elemental estimate

A
  • Substructure – excavation and substructure
  • Superstructure – frame, upper floors, external walls, roof, internal finishes
  • Services
  • External works
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10
Q

What is usually excluded from a cost estimate?

A
  • Professional fees
  • VAT
  • Client decant costs
  • Loose fixtures and fittings
  • Inflation
  • Site acquisition costs
  • Section 106s
  • Removal of asbestos
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11
Q

Why is VAT excluded?

A
  • Because different clients will incur different levels of VAT, might not be applicable
  • We would not be in a position to know the correct rate unless informed of it
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12
Q

What is the % error on a cost plan?

A

5%

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13
Q

What is contingency?

A

A sum included in the estimate to cover unknown expenses or unmitigated risks during the project

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14
Q

How is contingency assessed?

A
  • Should reflect the risks and unknowns specific to the project
  • Depends on items such as status of design info, project complexity, project type (new build/refurb), type of estimate, risks identified in risk register
  • Can include separate client contingency (for client changes), and project risk reserve (based on risk register items not accounted for in estimate)
  • It is common to have a higher % for refurbishment work due to the higher level of unknowns and therefore risks
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15
Q

What are preliminaries?

A
  • They define the scope of works
  • Include the project particulars, lists of drawings, description of the site, scope of work, details of management arrangements
  • Often contain items for pricing which are general items needed by the contractor to carry out the work that cannot be attributed to specific items of work
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16
Q

Where do you find the guidelines to prepare preliminaries?

A

SMM7

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17
Q

Name some preliminaries sections

A

A10 – project particulars

A54 – provisional sums

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18
Q

What should be considered when assessing preliminaries levels?

A

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
i) Availability of services
j) Level of contractor’s designed works

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19
Q

How do you take account of inflation when benchmarking / cost estimating?

A

Using TPI’s (Tender Price Index)

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20
Q

What do TPIs show?

A

They reflect changes in the level of pricing contained in the lowest accepted tenders for new work to take account of market conditions – compares against base rates

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21
Q

Where can you get this information from?

A
  • BCIS

- In house forecasts

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22
Q

How do you take account of location?

A

Through the application of location indices

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23
Q

Why do you need to take account of location?

A
  • Different market conditions in different locations

- Different cost of materials, different wage rates etc – impact on tender levels

24
Q

What does BCIS stand for?

A

Building Cost Information Service

25
Q

What is BCIS?

A

Provides construction cost and price information through publications, online services and price books

26
Q

What is a cost plan?

A
  • Presents the estimated cost into a structural elemental or functional format
  • It shows how the design team proposes to distribute the funds available on the elements of the proposed building.
27
Q

What is the purpose of a cost plan?

A
  • It is used by the cost consultant to control the development of the design
  • It identifies the client’s agreed cost limit and how the money is to be allocated to the different parts of the building.
28
Q

What is the difference between a cost estimate and a cost plan?

A
  • Cost plan is a plan of costs for the works in preparation for turning into a cost report to check against.
  • Estimate is a forecast of construction cost
29
Q

What is buildability?

A
  • Harnessing the contractor’s expertise and knowledge during the design stage
30
Q

What are the advantages of buildability?

A
  • Better programming, sequencing and construction methods – a quicker construction time
  • Lower capital and life cycle costs
  • Improved quality in the finished building’s performance and maintenance characteristics
31
Q

What is a wall to floor ratio?

A
  • This shows the relationship between wall area and floor area
  • It is used to show the cost efficiency of the building
  • The lower the ratio the cheaper the building as there is less external wall area per m2 of floor area
32
Q

What is the most efficient shape?

A
  • A circle
  • BUT this is not the most efficient shape as it has a poor lettable floor area – difficult to fit out
  • THEREFORE a square is the best
33
Q

What is the difference between cost and price?

A
  • Cost is the total of labour, plant, materials and management deployed for a specific activity
  • Price is the amount a purchaser / client will pay for an item or product – it is cost plus profit
34
Q

How would you prepare an estimate for M&E works?

A
  • I would ask an M&E specialist surveyor to undertake the estimate
  • For feasibility estimates the M&E amount would be included in the m2/functional unit rate
35
Q

What is GEA?

A
  • Gross External Area

- This is the area of the building measured externally at each floor level

36
Q

What is GIA?

A
  • Gross Internal Area
  • This is the area of the building measured to the internal face of the perimeter wall at each floor level
  • Excludes external open sided balconies, fire escapes, canopies, external walls, fuel stores
37
Q

What is NIA?

A
  • Net Internal Area
  • This is the area of usable space measured to the internal face of the perimeter wall at each floor level
  • Excludes internal structural walls and columns, spaces with headroom less than 1.5m, corridors and circulation space used in common, permanent lift lobbies, toilets, cleaners cupboards, plant rooms
38
Q

Where are all of these defined?

A
  • The Code of Measuring Practice, 6th Edition, published by the RICS
39
Q

What is the purpose of the Code of Measuring Practice?

A
  • Provides precise definitions to permit the accurate and consistent measurement of buildings
40
Q

What would you expect the percentage of NIA to GIA / GEA to be?

A
  • It depends on the type of project being undertaken (school, hospital, office etc…)
  • If it were an office build I would expect the NIA to GIA to be in the region of 70-85%, where 70% is not good and 85% is excellent.
41
Q

Where do you get cost information from?

A

a) In house historic data
b) Benchmarks
c) BCIS
d) Building cost models
e) SPONS and other price books (Laxtons etc)
f) Sub contractors and suppliers

42
Q

What do you measure in accordance with?

A

SMM7

43
Q

What does SMM7 stand for?

A

Standard Methods of Measurement, 7th edition

44
Q

What does SMM7 do?

A
  • SMM7 identifies the unit to which the work is measured and the requirements of measuring the works.
  • SMM7 is authorised by agreement between the Royal Institution of Chartered Surveyors and the Construction Confederation.
45
Q

How do you measure brickwork walls under SMM7 – and what other items would you measure in association?

A

Under SMM7 brickwork walls are measured in m2. Other items to measure in association with brickwork include:
Isolated piers, Isolated casings, Chimney stacks, Projections, Arches, Brick reinforcement, Sundry items, Forming cavity, Closing cavities

46
Q

What is a Section 106 agreement?

A
  • From Town and Country Planning Act 1990 section 106 (hence name)
  • They are also referred to as planning obligations
  • They are typically agreements between local authorities and developers negotiated in the context of granting planning consent
47
Q

What does a Section 106 Agreement need to be?

A
  • relevant to planning
  • necessary to make the proposed development acceptable in planning terms
  • directly related to the proposed development
  • fairly and reasonably related in scale and kind to the proposed development
  • reasonable in all other respects.
48
Q

What sort of things is the money spent on?

A
  • Affordable housing
  • New open space or environmental improvements
  • New roads and transport capacity
  • Health and education facilities
49
Q

What is construction to ‘shell and core’?

A
  • The basic structure, services and envelope of the building
  • AND the fit out of landlord / common areas
  • E.g. reception, toilets, lifts, cores, base services are terminated at breakout points to floors, life safety services infrastructure
50
Q

What is a CAT A fit out?

A
  • Also known as a ‘developer’s fit out’
  • Provides the generic requirements to suit most developers
  • E.g. life safety elements and basic fittings - suspended ceiling tiles, raised floors, carpet, lighting, power distributed to floor plates
51
Q

What is a CAT B fit out?

A
  • Overlays the CAT A provision with bespoke elements particular to the needs of the building user to enable the tenant to occupy and use the space
  • E.g. partitions, power distributed to floor boxes, data cabling, artwork and branding, upgrading CAT A finishes and toilet finishes etc
52
Q

Where could you find the definitions for CAT A & B fit outs?

A
  • British Council of Offices (BCO) fit out guide
53
Q

What is BWIC?

A
  • BWIC stands for Builders Work In Connection and is usually set as a percentage of the services cost.
  • Depending on the size of the job and complexity will determine the percentage of BWIC.
  • BWIC accounts for any drilling, fixing, cutting etc… that the builders do whilst undertaking the services.
  • BWIC can be measured in accordance with SMM7 when doing a BOQ’s.
54
Q

How would you create a cashflow forecast?

A
  • Need to know the construction programme and contract value
  • Then would use a Cashflow computer programme
  • Or by attributing costs to a construction programme.
  • Split works into packages as shown on contract programme and include individual s-curves for each package.
55
Q

What’s the benefit of cashflow forecast?

A
  • Allows employer to gain an understanding of financial requirements over the duration of the project duration.
  • Also acts as a check against valuations – early indication of financial difficulties
56
Q

What would you include in a financial report (CVR)?

A

a) Contract sum
b) Instructed variations
c) Potential future variations as advanced warnings
d) Claims
e) Anticipated final account total
f) Total of certified payments

57
Q

What is the purpose of a financial report?

A
  • To report against budgeted values and act as a working cost check on the project budget.
  • To give the Client an understanding of any savings or additional monies required.
  • To report on contract progress against pre-contract predictions.

RICS Questions (25 decks)

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