Design Economics and Cost Planning Flashcards
What is design economics?
It is the study of how changes in a building affect costs for example:
- Design factors:
- Building shape
- Circulation space
- Height and etc.
- Site factors:
- Location
- Topography
- Economic factors:
- Amount of construction work involved
- Availability of resources
Explain to me your understanding of how design factors such as building shape affect costs?
The simpler the shape of a building, the lower the cost due to the simplicity of the design. The most efficient design is a square or rectangular shape as oppose to an L-Shape and etc.
The reason for this is because an L-Shape building would require more external wall to encapsulate the same floor area than a square or rectangular shape building would.
More excavation would be required due to the additional perimeter of the building.
This would increase costs for drainage such as pipe runs.
There would also need to be additional roofing too.
Explain the same for circulation space?
This is also referred to as dead space which can inadvertently affect profitability of a built asset. The reason for this is because circulation space involves costs such as air-conditioning, lighting, decorating and etc.
Therefore reducing circulation space from an economic layout can help drive profitability as this affects net internal area (net lettable/useable area) of a built asset.
Explain the same for height?
The more height there is in a building will incur additional costs such as vertical transportation (lifts, stairs).
It also affects other factors such as substructure as the taller the building is, will impose more load which would require extensive foundations to support the building.
Important point to note, less storey’s does not always entail cost savings. Costs can also be minimized by reducing plan sizes and increasing building heights.
However, there comes a point where the building has reached a height which should not be exceeded as the costs far outweigh the need for an additional storey.
Explain how site factors such as location affect costs?
Urban/Metropolis areas such as cities will attract higher value compared to rural areas due to higher wages, access costs, material storage, cost of land and etc.
Explain the same for topography?
Depending on the nature of the site, ground conditions, obstructions and etc. will impact design and construction of a built asset which subsequently affects costs.
Brownfield sites such as sites which have previously been built on are likely to incur more costs due to demolition, site clearance and remediation costs. Other site factors include slopping and grounds with poor loadbearing capacity which could indicate extensive foundation works.
Explain how economic factors such as amount of construction work involved affects costs?
This is determined by the cost of productivity of the resources employed in its production. Such costs include:
- Labour
- Materials
- Plant
- Competition and etc.
Explain the same for availability of resources?
This comes down to the capacity of the contractors being able to carry out the entire works in-house and not having to outsource elements/portions of the works to sub-contractors.
In addition, locality is also important as it can minimize unnecessary costs such as transportation, accommodation and etc.
You mention in your document that you’re aware of NRM. Why do you use NRM for preparing cost plans/estimate?
- I use NRM as it is considered as best practice by competent and conscientious practitioners in the industry.
- It can also serve as a form of defence should a client make a claim against me.
- It also provides a consistent basis for preparing cost plans/estimates which gives added confidence to the client.
What is wall-to-floor ratio?
- It is the relationship between the wall area and floor area to show the cost efficiency of the building.
- The lower the ratio, the more cost efficient it is as there is less external wall to construct in comparison to floor area.
- It is more expensive to construct an external wall than it is to lay screed.
What is an ideal wall-to-floor area ratio?
- Office buildings - between 0.4/0.5, less than 0.4/0.35 is regarded as very efficient.
- Residential buildings - between 0.45/0.6, less than 0.4 regarded as very efficient.
What is net-to-gross ratio?
- It is the relationship between a building’s lettable and non-lettable area.
- Net-to-gross = GIA/NIA, where:
- NIA = Net Internal Area
- GIA = Gross Internal Area
- In doing so, it also helps understand what is considered as common areas such as stairways, corridors, lifts and etc.
- Typically the higher the ratio, the more lettable area there is which in turn drives productivity for the Client.
What is an ideal net-to-gross ratio?
Office buildings - between 0.7/0.8, note, that this will vary depending on the height and number of storeys of the building.
Residential buildings - between 0.8/0.85.
What is cost planning/estimating?
- It is about establishing if a project is affordable.
- In doing so, one sets a realistic cost limit which represents a fair price for the project.
- Deciding how the money is being spent and where and for its intended purpose.
- Determining option costings such as alternative building types or building designs.
What is the difference between an order of cost estimate (OCE) and a cost plan?
- An OCE or cost estimate is a document that is prepared at a given point in time. Typically prepared earlier in the design process between RIBA stages 0 to 2. Usually prepared with limited design information and priced on either a cost per m2 or functional unit basis.
- A cost plan is an evolving document and usually prepared from RIBA stage 2 onwards. As the design develops, more information/detail can be inserted into a breakdown of costs such as sub-structure, superstructure and etc. to set a more realistic cost limit for the project.
What is the difference between cost and price?
- Cost is the total of the following:
- Labour
- Plant
- Materials
- Management for a specific activity.
- Price is the amount a purchaser or client will pay for an item or product and is made up of the above costs including any overheads and profits (OH&P).
What would you do if a cost plan exceeds the project budget?
- Analyse the costs to assess the source/origin of the increase and identify whether any element is abnormally high against the OCE.
- When the element is identified that is driving the cost high then methods such as value engineering (VE) can be suggested as an option to the client and design team to bring the cost within budget.
What is the format of a feasibility estimate or OCE?
- Typically presented on a cost per m2, functional unit or elemental basis.
- Could also be presented on a range for example £700-£800/m2.
- Can also be based on elemental rates of a building such as sub-structure, frame, external wall and etc.
- Any site abnormal costs or enabling works are considered to.
- Includes for preliminaries, contingency, inflation and location factor adjustments.
What is a functional unit?
- It is a unit of measurement that considers the prime/intended use of a building.
- For example in a hotel or hospital a functional unit could be expressed as cost per bedroom or cost per bed respectively.
- In a retail space a functional unit could be expressed as net lettable retail space.
Where would you get your rates from for a preliminary estimate?
- Previous similar projects and historical data such as previous tender submissions or a contract sum analysis.
- Other sources would include estimating pricing books such as Spons/Laxtons, Building Cost Information Service (BCIS) or specialist contractors/supplier quotations.
What information do you need to carry out an OCE?
- Building location.
- Type of building.
- Floor area or number of functional units.
- Storey height.
- Initial floor plans, roof plans, elevations and sections.
- Indication of specification and quality.
- Indicative programme, procurement and contract strategy.
- Budget and cashflow constraints.
- Site/Ground conditions.
- Indicative M&E design.
- Details of professional fees, development costs, VAT and treatment of inflation.
