Design Economics and Cost Planning Flashcards
What is an order of cost estimate?
- The determination of possible cost of a building(s) early in design stage in relation to the employer’s fundamental requirements.
- Prior to preparation of a full set of working drawings
What is an elemental cost plan
- the critical breakdown of the cost limit for the building(s) into cost targets for each element of the building(s)
What are the key design principles that affect cost?
- Circulation space
- Size
- Shape
- Height
- Wall to floor ratio
- Grouping of buildings
- Specification
- Location
How does wall to floor ratio impact the cost of a building?
If the building has a lot of facade covering little area, the cost/m2 for the building would be high.
The cost for the high quantity + therefore cost of the facade is being divided over a small area.
How does size impact the cost of a building?
A bigger building will have economies of scale, reducing the price subject to the size being designed efficiently
How does circulation space affect the cost of a building?
The “cost”/m2 in relation to net area will be higher if the “cost” is carrying surplus non-lettable circulation space.
Too little circulation space however, will make a building unattractive to a tenant reducing the rent/sales value for the client
How does the height of a building affect the cost?
A tall building may require more lift cores, reducing net space on each floor plate.
Bigger foundations, beams etc required
Requirements for better facades to deal with greater wind loads and sprinkler requirements for buildings over 30m high (approved doc B)
How does the shape of a building affect the cost?
Curved shapes are expensive to manufacture + construct due to complexity
Inefficient shape could cause high wall to floor ratio
Most efficient shape is a square (excl circle because of curve)
How does the grouping of buildings affect the cost?
Less facade per m2
Ability to share plant etc
What’s a good, average and poor W:F ratio?
Good = 0.4
Average = 0.6
Poor = 0.8
What percentage of a construction cost would you expect for facades?
15% - 25%
What net to gross would you expect for an office?
Good - 80% - 83%
Excellent - 83% - 86%
Poor - over 87% or under 80%
What government guidance document discusses school areas?
Building Bulletin 103: Area guidelines for mainstream schools
What net to gross would you expect for a school?
70% - 75%
What is net vs non-net for schools?
Non-net = WCs, personal care, circulation, kitchen, plant, internal walls
Net = everything else, incl learning, storage, halls, staff space
What was the GIA for the school you worked on?
Phase 1 - 2024m2
Phase 2 - 7500m2
What was the net:gross?
72%
What are the full names for NRM1 and NRM2?
New Rules of Measurement 1: Order of cost estimating and cost planning for capital building works
New Rules of Measurement 2: Detailed measurement for building works
How is NRM1 structured?
1 - Context & definitions
2 - Rules for preparing OCE, how to quantify non-measurable works
3- Rules for cost planning, how to quantify non-measurable works
4 - Tabulated rules of measurement
Appendices
How is NRM2 structured?
1 - Context & definitions
2 - Rules for preparing Bill of Quants, Schedule of Rates, how to quantify non-measurable works such as risk, contractors design works
3 - Tabulated rules of measurement
Appendices
What’s the difference between a cost estimate and a cost plan?
Cost estimate gives a likely outturn of construction costs
Cost plan is an iterative process, updated and tracked as design progresses, to control the development of the design and ensure the client achieves value
What is a cost model?
Anything that models costs, e.g. cost plan, estimate, analysis
What’s benchmarking and how would you benchmark a project or element?
The process of collecting and comparing data within an organisation or external
to an organisation to identify the ‘best in class’
- Collect
- Compare
- Analyse
- Action
- Repeat
What’s the relationship between the RICS Property Measurement 2nd Edition, RICS Code of Measuring Practice 6th Edition and IPMS?
RICS Property Measurement 2nd Edition 2018 - This is a Professional Statement, states what we should use and when. Office and Residential = use IPMS.
Code of Measuring Practice 6th Edition 2015 = Guidance Note, how to measure GIA, NIA, GEA
IPMS - how to measure IMPS1, IMPS2, IMPS3 for offices, resi, industrial and now retail.
Why would you not use IPMS for say retail?
If the client wishes you to use something else, or if the project had been measured using COP6 prior to IPMS being released.
What is included/excluded in GIA?
Included:
- Core areas
- Area measured at ground
- Areas taken up by IW/columns/beams
- Stairwells, vertical projections
- Mezz floors w/ perm access
- Voids over stairwells
- Structural, raked or stepped floors are to be treated as a level floor measured horizontally
Excluded
- Perimeter wall
- Open sided external balconies
- Canopies
- Voids over/under raked/stepped floors
- Voids above GF atria
- Greenhouses, garden stores, fuel stores (resi)
What’s included/excluded in NIA?
Included
- Atria, lobbies etc that are tenant sole occupancy
- Kitchens in sole occupancy
- Built in cupboards etc in usable area
- Areas occupied by skirting/trunking
- Areas occupied by non-structural walls
subdividing accommodation in sole occupancy
Excluded
- Internal structural walls, walls enclosing
excluded areas, columns, piers, chimney
breasts, other projections, vertical ducts,
walls separating tenancies
- Common use areas (e.g. WCs, lobbies)
- Lift rooms, plant rooms, tank rooms
- The space occupied by permanent and
continuous air-conditioning, heating or
cooling apparatus, and ducting in so far as the space it occupies is rendered substantially unusable
- The space occupied by permanent,
intermittent air-conditioning, heating or
cooling apparatus protruding 0.25m or more into the usable area
- Areas with a headroom of less than 1.5m
- Areas rendered substantially unusable by
virtue of having a dimension between opposite faces of less than 0.25m
- Areas for vehicle parking
Define NIA
The usable area within a building measured to the internal face of the perimeter walls at each floor
level
Define GIA
The area of a building measured to the internal face of the perimeter walls at each floor level
Define GEA
The area of a building measured externally at each floor level.
What guidance does RICS provide on benchmarking and cost analyses?
RICS Practice Standards - Cost analysis and benchmarking, 1st edition 2011
What is a cost analysis?
An examination of the distribution
of cost across the construction elements of a project
What’s the difference between GIA and IPMS2 office?
- IPMS uses internal dominant face, GIA uses internal face (brick/block work or
plaster coat) - Rooftop terraces included but stated separately
What’s the difference between NIA and IPMS3 office?
- IPMS 3 measured to CL of walls separating two tenancies
- IPMS3 includes columns
What costs have you benchmarked?
Benchmarked cost/m2 office shell to Cat A, soft strip, academy
What is a standard shell to Cat A rate?
Circa £50-55sqft
What’s a residential unit cost?
£250/sqft
What’s a typical school cost?
Academy I worked on the benchmark was circa £2,500/m2, but would have to use “National School Delivery Cost Benchmarking” by Infrastructure & Projects authority to check
What does the “National School Delivery Cost Benchmarking” by Infrastructure & Projects do?
Gives guidance on cost/m2 for schools based on pupil age, size, SEN/non SEN etc.
How would you benchmark something if you had no historic data?
BCIS, Spons, market testing, build rate up using material/labour costs
What’s the best way to benchmark costs?
Historic data if you have a team that deliver regular projects of similar quality and scale
What’s the BCIS?
Building Cost Information Services, online
What does BCIS do?
Cost and price information is collected by BCIS from across the UK construction industry, then collated, analysed, modelled, interpreted and made available to the industry to facilitate accurate cost planning.
What ways can you manipulate the construction cost info on BCIS?
- Location
- Age
- AC/no AC
- GIA
- Procurement
Give an example of the risk allowances you’ve held in an OCE
In an OCE I held the following risk:
Design development 10% (bc early in design process)
Construction 5% (mediocre risk associated w/ construction, similar to other projects)
Employer change 10% (client likely to change mind)
Employer other 2% (benchmarked)
How do you measure inflation?
BCIS or internal TPI forecasts
How would you quantify prelims?
Based on the project’s particulars:
- Size, economies of scale
- Complexity, cranes and scaffolding can cost more
10% - 20% typically
What is the RIBA POW 2013?
- Splits project into key project stages w/ defined outcomes
- Shared framework for design and construction
- Offers both a process map and a management tool.
What does the QS do in each stage?
0 - ascertains clients key objectives
1 - prepares budget, order of cost estimate
2 - Cost Plan
3 - Cost Plan/PTE
4 - Cost Plan/PTE/Tender
5 - Post contract cost control, valuations, negotiates variations
6 - Negotiates final account
7 - Review/reflect, post-occupancy evaluation
Name the stages of RIBA
0 - Strategic definition 1 - Preparation and brief 2 - Concept design 3 - Technical design 4 - Detailed design 5 - Construction 6 - Handover and close out 7 - In use
Why might your project deviate over the mean cost/m2?
Abnormals such as site logistics, demolition, asbestos
Higher specification
How might you price things differently at different stages?
More detailed build-up when more detailed design becomes available. Could start with cost/m2, then move onto quantities and rates, then more detailed quants/rates.
Examples - allowance for transfer structure at Stage 1, at Stage 2 there were detailed drawings with weights
What was the cost/m2 for a project in Reading vs London?
CHECK
How did the Stage 3 costs compare to stage 2 for your office cost plan?
Cost had gone up, but when design development contingency dropped from 3% to 0% (end of design phase) CHECK
What is Cat A, Cat B, Shell & Core?
There are no definitions for Cat A/B/S&C but generally:
Shell & Core - Bare bones - landlord/common areas complete, vertical services, no finishes to tenant areas
Cat A - Basic finish - landlord/common areas complete, vertical and horizontal services, paint to walls, possibly RAF and/or basic carpet, possibly grid to ceilings
Cat B - Finished product - partitions and doors, specialist lighting & further services, cafes, branded decor, furniture
How can you forecast the cost for individual items such as steel?
TPI and CPI track cost of tenders and construction costs respectively, but should not be applied directly to an item.
To bring a historic cost for steel to present day value, you should use historic price changes for steel. Future???
What happens to contingency as the project progresses?
Design development - reduced as design develops
Construction risk - assessed based on consrtuction risk, adjusted when more info is available, kept through construction phase. Any leftover = saving for client
Employer change risk - reduces as design develops and likelihood of client changing decreases. Kept during construction for any employer changes, leftover = saving
Employer other risk - kept through construction, allowance for any issues caused by client that have commercial impications
What information would you expect from the design team at Stage 3?
- Partial specification (wall types, floor types)
- Coordinated design (architect, services, structure)
- Developed from stage 2
What information would you expect from the design team at Stage 2?
- Agreed final project brief
- Outlined proposals from each designer
- Indicative weights
- Office grid, frame and upper floors strategy
What’s the PMI?
Construction Purchasing Managers Index
Indicated whether the construction industry is contracting or expanding
0 - 100, over 50 = expanding, under 50 = contracting
Sub 50 for most of 2019, January = 48.4, big jump signalling better times ahead
Why do costs vary in different locations?
- Availability of specialists
- Availability of materials
- Ease of access
- Transport links
- Cost of living/labour
- Locality to materials
Why is Brighton’s TPI higher than other areas outside of London?
- Close to London and a city, similar cost of living
- Big labour market
- Similar accessibility
- Higher city living costs
What are some abnormals you’ve had on your projects?
- Asbestos removal
- Demolition of existing buildings
- Feature facades
Do you have any other examples of advising on design economics and cost planning?
- Canada Water Stage 1 Cinema Portion vs Cinema Standalone estimate
- Costs in standalone estimate had gone up, particularly in frame
- Because previously it was a cost/m2, difficult to line up and compare apples for apples
- Had to explain that shared/party walls should be apportioned to give like for like comparison.
When calculating inflation for a project in the future, what date do you work it to?
Present day to mid-point of construction
What would you expect to have a better W:F, resi or school?
Resi because of slab - slab height generally smaller
What was your position on inflation for your academy?
Excluded - client instruction.
What are WTO tariffs?
Vary depending on product, 3% - 15%. Carpet is 12 or 15.. would have to check wto.org for each item
What is TPI for 2020?
G&T TPI forecast is -1% YoY for 2020, not predicting positive inflation until end of 2022
Same for UK and London
What were components of construction inflation last year?
G&T tender info suggested rebar ~12%, fabricated steel up 4%
What was the cost/sqft of the project in South London?
Mixed use, including all on costs + inflation, just shy of £300/sqft
Commercial w/ on-costs pre inflation - £290/sqft
Retail w/ on-costs pre inflation - £179/sqft
Cinema w/ on-costs per inflation - £185/sqft
Where might you find definitions for shell & core/cat A/cat B?
BCO produce a guide book on them
What does BCO stand for?
British Council for Offices
Where are PSUMS defined?
NRM2
What are the different types of PSUM?
Defined
Undefined
What is a PSUM?
A sum of money set aside to carry out work that cannot be described and given in quantified items in accordance with the tabulated rules of measurement
What is an undefined PSUM?
A sum provided for work that is not completely designed, but for which the information required for a defined provisional sum cannot be provided
What is a defined PSUM?
A sum provided for work which is not completely designed but for which the following information shall be provided:
– the nature and construction of the work;
– a statement of how and where the work is fixed to the building and what other work is to be fixed thereto;
– a quantity or quantities that indicate the scope and extent of the work; and
– any specific limitations and the like identified
What is the TPI for London vs Reading vs Brighton?
London is highest, expensive labour market due to high cost of living. 125 - City of London 109 - Brighton 107 - Reading Bedford = 100 Cambridge = 102
Where did you find regional TPI data?
We have internal TPI info for regions
BCIS also provide indices (Tender Price Studies)
What elements would you include in a cost plan for a CAT A fit-out?
- Internal finishes
- FF&E
- Services
How do you measure inflation?
- Understand TPI today and TPI forecast for mid-point of construction
- Work out the %age uplift for mid-point of construction from present day
- Apply that same %age to cost estimate
What information did you require to carry out a cost estimate for your London office fit-out project?
a. Type of building (function)
b. New build or extension
c. Location
d. Size
e. Indication of quality
f. Site visit
In your documents you say the project would be 22% higher in 8 years time, the project stating in years or completing in 8 years? is this relative to inflation?
Inflation was taken from present day (present day pricing) to the mid-point of each phase
Overall 22% higher
Each phase had it’s seperate inflation uplift
How might you forecast long term TPI?
Long term averages by looking historically. Over the last 50 years I believe the average is 4% a year
What other materials might you use for piles?
- Concrete
- Steel (sheet piles)
- Timber
What might you exclude from a Cost Plan?
- VAT
- Professional fees
- Asbestos, lead paint
Where did you allow for the PCSA fee in your cost plan?
Professional fees budget, not managed by me
When is a Principal Contrator (CDM) required?
PC required post-contract. If two or more contractors on site at the same time, PC must be appointed to manage those shared accesses/hoarding etc
Can BCIS offer costs for materials/items?
Materials indices
What’s the cost of your resi units, say a 2-bed?
[insert your experience]
What is the gross costs for the functions in your project?
[insert your experience]
What’s the cost/sqm on your project at Stage 1 vs Stage 2?
[insert your experience]
