Design Economic and Cost Planning

Question 1

What are the factors influencing accurate cost estimating

Answer 1

• Design information available
• Cost data available
• Volatility of the market

Question 2

What are the different stages of cost planning

Answer 2

Stage 0 – Strategic definition
Stage 1 – Client brief
Stage 2 – Concept Design
Stage 3 – Developed design
Stage 4 – Spatial Co ordination

Question 3

What are the different external factors influence cost on a construction project

Answer 3

• Government regulations and policies
• Inflation
• Interest rates
• Government targets
• Material and labour cost
  Employment

Question 4

What is the difference between cost and price?

Answer 4

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

Question 5

What types of estimates are there?

Answer 5

Order of Cost estimate (OCE)
(elemental) Cost plan

Question 6

What is an order of cost estimate?

Answer 6

The determination of possible cost of a building early in the design stage in relation with the Employer’s fundamental requirements.

It forms the basis of the cost planning process.

Question 7

What are the elements of a cost estimate?

Answer 7

Facilitating works
Building works
Contractors prelims
Contractors OH&P
Design Fees

Question 8

Why is VAT excluded?

Answer 8

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

Question 9

What is a cost plan?

Answer 9

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.

Question 10

What are the elements of a cost plan?

Answer 10

Facilitating works
Substructure
Superstructure
External works
Main contractor Prelims
Main contractor OH&P
Project design fees
Other project cost (Client direct cost)
Risk
Inflation

Question 11

What are the main purposes of a cost plan?

Answer 11

• ensure clients are provided with value for money
• make clients and designers aware of the cost consequences of their requirements
• provide advice to designers that enables them to arrive at practical and balanced designs within budget
• keep expenditure within the cost limit approved by the client
• provide robust cost information with which the client can make informed decisions.

Question 12

For you Kings Hill Project how did you present your cost plan

Answer 12

• Introduction/Summary
  Recommendation
• Cost Summary
• Status of the cost plan
• Details of the drawings, specifications and other information on which the cost plan was based
• Exclusions/Assumptions/risk
• Cost breakdown

Question 13

What is contingency?

Answer 13

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

Question 14

Where do you get cost information from?

Answer 14

• In house historic data
• Benchmarking
• BCIS
• Building cost models
• SPONS and other price books (Laxtons etc)
• Sub contractors and suppliers

Question 15

What guidance notes are you aware of in relation to cost planing

Answer 15

Cost analysis and benchmarking, 2nd edition, August 2024

Cost prediction, 1st edition, November 2020

Question 16

What is the different between value engineering and value management

Answer 16

VM - the process maximizing project value undertaken at early design stages before it been coordinated

VE - the process maximizing project value undertaken after the design has been developed.