Design Economics and Cost Planning Flashcards
What is life cycle costing?
objective method of measuring and managing the lifetime costs of any project or asset.
Enables design options to be compared from a lifetime perspective with view to understand and reduce overall costs associated with owning and operating the asset.
What are the key advantages of LCC?
1) Long term value
- ensures project has highest possible value even if upfront costs are not significantly reduced.
- Process promotes better durability, reduced maintenance, fewer risks and operational efficiency leading to increased life span of the building.
2) Green building certification credits
- LCC credits are included in many green building cert schemes such as BREEAM.
3) Reliable planning and reduced risk
- enables informed decisions to be made on material selection
- can be used to plan future maintenance requirements
What are the key disadvantages of LCC?
Costs associated with defects cannot be predicted
Components not always replaced due to life span - changes in style and fashion - impossible to assess in design phase
Whats the difference between LCC and WLC?
LCC - Focuses on construction, maintenance, operation and disposal of the asset
WLC - includes client and user costs such as project financing, land, income and external costs
What is the typical analysis period to calculate LCC?
LCC period of analysis should be determined by the client. It might be the length of a private finance initiative concession, length of a lease or time to first refurb
What are the key cost categories to consider when calculating WLC?
- Construction cost
- Maintenance cost
- Operation Cost
- Occupancy cost
- End of life costs
- Non construction costs (Land, fees, etc.)
- Income
- Externalities
In your opinion how accurate is LCC?
LCC requires various assumptions to be made on trends, inflation, historic data. Precision relies on accuracy of assumptions.
Longer analysis period that LCC is used the more likely the accuracy will fall.
Where can you get information about maintenance costs?
BCIS Pricing books - SPONS Contractors / sub contractors In house data Previous projects
How can LCC be used in a value engineering exercise?
May be that a component or material in the design has a high capital cost but from using LCC can be seen to have significantly lower maintenance and replacement costs compared to a cheaper capital cost alternative
What is an order of costs estimate?
Term used by RICS under NRM1 for capital building works
Key purpose is to establish if proposed building project is affordable and if so, to set a realistic cost limit for the development project
How are the professional fees presented in the order of cost estimate?
Can be presented as an item (if fees are known) or a percentage applied to the works cost estimate
Which RIBA stage is the order of cost estimate typically produced?
RIBA Stage 1 - Preparation and Briefing
What are the RIBA stages of work?
Stage 0 - Strategic Definition Stage 1 - Preparation and Briefing Stage 2 - Concept Design Stage 3 - Spatial Coordination Stage 4 - Technical Design Stage 5 - Construction Stage 6 - Handover Stage 7 - Use
What’s the difference between an order of cost estimate and cost plan?
Estimate provides possible cost based on employers requirements and is initial phase of the cost planning process. - Completed using m2 areas or functional units
Cost plan is more detailed elemental breakdown and shows how the costs are distributed across the project
What additional information should accompany an order of cost estimate?
- Covering letter
- Exec summary
- Cost limit
- Specification notes
- Assumptions
- Exclusions
- Drawings
- Risk Register
- Cashflow information
