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Cost Plans and Estimates Flashcards

1
Q

What is a cost plan?

A

Live cost document used to control costs and the development of design through the different RIBA stages

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2
Q

What is the purpose of a cost plan?

A
  1. keeps expenditure within the cost limit approved by the Employer
  2. provides advice to designers that help them design within budget
  3. provides cost information that allows employer to make informed decisions
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3
Q

How does cost planning assist in the financial control of a project?

A

Provides advice to designers that help them design within budget
e.g. on the Horseferry Road project I set out targets for the carpet at £40/m2 and timber flooring at £160/m2

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4
Q

What are the contents of a cost plan

A
  1. Exec summary (summary of project costs)
  2. Reconciliation summary from previous cost plan
  3. Reasons for changes from previous cost plan
  4. Basis, assumptions and exclusions
  5. area schedule
  6. Construction cost summary / elemental summary
  7. Cost breakdown
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5
Q

What other workstreams would/have you tracked?

A

60 London Wall;
1. Signage (£10/sq ft)
2. Project Expenses e.g. mover, cleaner and legal
3. FF&E
4. Fees

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6
Q

Elemental Structure of cost plan based on nrm1

A
  1. Facilitating works (strip out and demo)
  2. Sub structure (excavations, foundation)
  3. Super structure (frame, upper floors, roof, external walls, windows and externals doors, stairs, internal doors and structural internal partitions)
  4. Internal finishes
  5. FFE fittings furnishings and equipment
  6. MEP
  7. Works to existing buildings
  8. External works
  9. Prelims
  10. Ohp
  11. Fees
  12. Risk allowances
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7
Q

What was elemental structure of Alteryx cost plan

A
  1. Strip out
  2. RAF
  3. Stairs
  4. Structural work
  5. Partitions, glazed and demountabke walls
  6. Suspended ceilings
  7. Floor and wall finished
  8. Joinery
  9. Appliances and catering
  10. Blinds
  11. MEP
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8
Q

Assumptions for cost plan

A

Based on Alteryx
1. Design
A) phone booths were pods and it built in
B) Floor to ceiling height in BOH room where no detail is 3.4 (exposed ceilings)
C) No full cooking kitchen allowed. Assumed tea points

  1. MC prelims estimate 6%
  2. OHP 2%
  3. Beer tap will be client direct
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9
Q

Exclusions for cost plan

A
  1. VAT
  2. Stamp duty
  3. Planning fees
  4. Legal fees
  5. Exchange rate fluctuations
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10
Q

How do you prepare a cost plan?

A
  1. Prepare an area schedule by doing a take off of drawings
  2. Do take off of partitions and finishes
  3. Using NRM1 as the basis, populate the cost plan
  4. Use internal and external sources of cost data for rates
  5. Ensure basis, assumptions and exclusions are well written and clear
  6. Final check and maths check
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11
Q

What is an estimate?

A

Initial estimate produced at the beginning stages

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12
Q

Purpose of an estimate

A

Advise on feasibility
Establish a cost limit

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13
Q

How is an estimate produced?

A

3 ways
Functional unit method
Elemental method
Floor area method

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14
Q

What is functional unit method?

A

Involves using the functional unit of a building and applying a cost per functional unit to derive a cost

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15
Q

What is a functional unit and where do you get this from?

A

Expresses the intended use of the building. NRM 1 provides a list of functional units for building

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16
Q

Examples of functional units

A

Hospital beds
Offices lettable NIA
hotels rooms
Car park spaces

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17
Q

Where do you get cost per functional unit from

A

From BCIS or internal benchmarked cost data

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18
Q

Whats the issues or risks of using benchmarked cost data

A
  1. Account for inflation
  2. Location
  3. Need to ensure there are no abnormals that can skew the cost e.g client suite or immersive room or staircases
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19
Q

Pros and cons of functional unit

A

Pros
1. Easy and quick to do
2. You don’t need a lot of information to derive a cost

Cons
1. It isn’t completely accurate as it’s not based on any drawings
2. Can be a large variance between estimate and actual cost

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20
Q

What is elemental method?

A

Splitting the costs elementally to derive a cost

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21
Q

Pros and cons of elemental method

A

Pros
1. Accurate as it’s based on drawings
2. Can be used to obtain funding by the client due to the amount of detail in it

Cons
1. Takes a long time to do
2. You need more info (drawings)

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22
Q

What is floor area method

A

Applying a cost £/m2

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23
Q

Pros and cons of floor area

A

Same as functional unit

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24
Q

How do you ensure cost estimate is accurate?

A

By benchmarking against recently completed projects that are of similar size and nature (think of the benchmarking doc we do)

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25
Minimum info needed to prepare an estimate
1. Location 2. Size (area or number of functional units) 3. Indication of quality 4. Indicative programme dates
26
Typical info needed for estimate
1. Size 2. Location 3. Indication of quality 4. Drawings 5. Programme 6. Any specialist work required? 7. Logistical issues?
27
What advice would you provide to a client when issuing an estimate
Very high level as it’s based on minimal info. As the design develops and more info becomes available the cost accuracy will increase
28
What advice would you provide to clients on accuracy of cost planning and estimating?
Accuracy is dependent on level and quality of design info but increases as design develops
29
What is a PTE
Final estimate produced before tenders are returned
30
Why produce a PTE?
1. Provides a basis to compare the tenders against 2. Allows you to pick up anything missed and picked up during tender period (through issue of addendums and clarification of queries)
31
What things affect cost planning?
1. RIBA stage; Level and quality of design info 2. Sources of cost data 3. Market factors
32
What are current market factors / issues
1. Inflation (increases price of goods and services 2. Interest (makes borrowing expensive so need to be aware when setting budget and cost planning) 3. Ukraine conflict - affects global supply chains 4. Increased energy costs - increases the cost of materials such as bricks, plasterboard as producing it is more expensive due to energy costs 5. Increased fuel costs - will pass onto consumer 6. Brexit - labour and material shortage due to restrictions in movement
33
How do you adjust costs for time?
Using TPIs
34
What are TPIs
Tender price indices
35
What do TPis show
Changes in the level of pricing over a period of time
36
Where do you get TPIs from
1. BCIS 2. Company produces internal tender price indices
37
How is inflation dealt with in a cost plan?
As a % uplift at the end
38
What is a base date
Date in which costs are established The base date needs to re established for each cost plan
39
Why is it important to account for inflation?
1. to anticipate changes in labour/plant/materials 2. to ensure cost plans and estimates are accurate to ensure project remains within the cost limit established
40
How do you adjust for location?
using a location factor
41
why do you need to adjust for location
because different locations have different markets and labour and plant prices differ
42
what is included in inflation?
tender price inflation and construction inflation
43
what is tender price inflation?
from cost estimate base date to tender return
44
what is construction inflation?
from tender return to mid point of construction
45
why is inflation taken to mid point of construction
because it's assumed that all packages would have been procured by then
46
how is inflation dealt with in contracts and contract sum?
it's deemed to be included unless contractor has said its excluded and a fluctations clause applies
47
what is a prelims doc
describes the scope or project and sets out design and construction protocols
48
what are prelims costs?
cost of administering a project
49
name some sections in a prelims doc
scope of work, description of building, working hours
50
How do you use TPIs
Find the indice for the date that the cost plan is based on and the indice at the mid point of construction Subtract one from the other and convert to %
51
How might prelims differ for a project outside London
I would expect prelims to be lower because price of labour and plant is lower
52
What should you consider when assessing prelims?
1. Length of project 2. Type of project (hotel/fit out) 3. Complexity of project 4. Access to site / logistical issues 5. Specialist installations e.g roof light 6. Size of project
53
What is OHP
Markup applied by contractor for profit and overheads
54
How do you calculate prelims
In the beginning stages I would use a % based on previous benchmarked cost data for projects that of similar size and nature As more design is available, I would price the prelims against the programme and work the value out as % and compare to previous projects to understand is % is reasonable
55
How do you calculate OHP
Using previous benchmarked cost data
56
What is a risk allowance
Sum of money allocated for unforeseen risks
57
Why do we have risk allowances
To protect against risk
58
4 types of risk allowances
1.design development - to cover development of design e.g unclear scope, planning requirements 2. Construction risk - cover unforeseen encounters during construction 3. Employer change risk - changes made by employer during design and construction 4. Employer other risk - cover risks surrounding client e.g delays in payment, availability of funding and acceleration
59
How would you quantify employer other risk?
Availability of funding- if project was over budget and needed additional funding, would quantify the time it would take to obtain funding and the design team prolongation costs Delays in payment - if client has a poor/unreliable payment system, simple interest would be charged so use that and apply to construction value.
60
How do you calculate risks
1. % at beginning stages 2. Priced risk register as design develops
61
What are some % you’ve used on cost plans and estimates
Cost estimate 15% Cost plans would reduce down to 5% for construction only at stage 4
62
How do you proceed if a cost plan is over budget?
1. Look at cost plan to identify reasons for increase 2. Suggest VE opportunities based on increases 3. Engage design team to develop a list of VE
63
How do you ensure costs don’t exceed during design development
1. Attend DTMs 2. Keep change log and price them 3. Set target rates for key design elements 4. Doing reconciliations from previous cost plans
64
What would u do if client asked to reduce risk allowances
1. Suggest we look at ways of motivating risks before reducing 2. VE to reduce overall cosg
65
Why would you not utilise all contingency to fund overspend
Because it would leave the budget exposed moving forward if the risks on the risk register were realised
66
How do you prepare an order of cost estimate
67
What is the layout of an order of cost estimate
68
What is benchmarking?
Process of comparing costs to similar projects
69
How and when can benchmarking be used?
1. Cost estimating - set a budget that’s realistic and sufficient 2. Cost planning - check cost is in right ballmark. - check packages are in right ball mark - estimating OHP and prelims
70
What are some of the issues with using benchmark cost data?
All projects are different so there may be abnormals that can skew the cost e.g staircase, enhanced AV, Client suite, immersive room Projects can often have logistical constraints and planning issues that aren’t factored in the benchmark cost data
71
Things to consider or adjust when using benchmark cost data?
1. Abnormals 2. Inflation 3. Location 4. Size (economies of scale) 5. Sustainability 6. Exclusions
72
How did you benchmark or use benchmark costs data at 60 LW?
1. My company has an extensive database of costs 2. I presented my client with costs from 20 different projects across all sectors to give an idea of range of costs 3. Then narrowed costs down so they were sector specific and presented 10 projects and costs from tech sector. I highlighted project specific requirements for each project e,g staircase etc 4. Used costs as a guide to set bronze, silver and gold budgets 5. Discussed requirements of project with client and agreed on budget
73
What we’re the bronze silver and gold numbers for London wall?
Bronze £110/sqft Silver £160 Gold £230 Ffe ranges from 15-30/sqft
74
How did you advise on inflation when cost estimating?
My company has analysts that analyse cost data and produce in house TPIs I used our in house TPIs to allow and predict for anticipated inflation (3%)
75
How did you determine value for your client?
1. Understanding their requirements and aspirations for the project 2. Setting a budget that will help them achieve those requirements and aspirations using benchmark cost data 3. DRIVING OUT INEFFICIENCIES IN DESIGN BY VEING EARLY, material consideration, design considerations

Design Economics & Cost Planning (1 decks)

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