Design economics and cost planning Flashcards
What is the difference between Prime cost sum and provisional sum?
Prime Cost Sum: Supplier/ Subcontractor is selected by client to carry out an element of the works and imposed upon the Main Contractor after Main Contractor Appointment. Excludes profit markup and Main Contractor attendances.
Provisional Sum: Allowances for specific elements of the works not yet defined in enough detail for the Contractor to price. No such thing in NEC Contracts.
What is the difference between an order of estimate and a cost plan?
A cost estimate is prepared earlier on in a design process typically between RIBA work stages 0 to 2.
This is when the level of design information is more limited and allows a cost estimate to be prepared on a cost per m2 or cost per functional unit basis.
A cost plan is produced typically at each RIBA work stage from stage 2 onwards.
As the design process progresses more information can be included to eventually breakdown the estimated cost of the development elementally into each of its components parts such as substructure, superstructure, services and professional fees into an elemental cost plan format.
What is the difference between cost and price?
The cost is the total cost of labour, plant materials and management deployed for a specific activity.
The price is the amount a purchaser or client will pay for an item or product and is made up of the cost plus the main contractors profit margin.
How do you proceed if the cost plan exceeds the project budget?
I would analyse the costs to assess where increases have come from and identify whether any element of work is abnormally high against the order of cost estimate.
When the reason for the overspend is identified I would then look to propose value engineering to the project team, working with the client and design team to propose VE options to bring the forecast costs back in line with the project budget.
What is buildability?
This is harnessing the contractor’s expertise and knowledge during the design stage to generate ideas for effective and efficient methods of construction.
What are the advantages of buildability?
- Buildability can result in better programming, sequencing and construction methods.
- A quicker more efficient programme can be achieved.
- Reduced capital and life cycle costs of the building can be obtained.
- The quality in the finished building’s performance and maintenance characteristics can be improved.
What is a wall to floor ratio?
This shows the relationship between the wall area and floor area.
It is used to show the cost efficiency of the building.
The lower the ratio, the cheaper the building is to construct as there is less external envelope to construct in comparison to the floor area.
What is the most efficient building shape?
In theory a building with a circular floor plate building would offer the most efficient design as there is less wall to floor ratio.
However a circular floor plate has a poor lettable floor area and is difficult to fit out therefore a square floor plate is considered more efficient overall.
How would you prepare an estimate for M&E work?
I would ask an M&E specialist surveyor to undertake the estimate.
When preparing a feasibility estimate I would benchmark it and would include as a m2 or functional unit rate.
What is a Section 106 agreement?
S106s are agreements between local authorities and developers that are negotiated in the context of granting planning consent.
What is construction to shell and core?
(THINK MBS MUSEUM AND ANC)
Shell and core is the basic structure, services and envelope of the building.
This normally includes the fit out of landlord and common areas e.g. the reception, toilets, lifts and stair cores,
Base services are typically terminated at entry points to each of the lettable floor plates however life safety services infrastructure is normally provided.
What is a CAT A fit out?
CAT A is also known as developer’s fit out
This provides generic fit out items to suit most developers for example life safety elements and basic fittings such as suspended ceiling tiles
(TURN UPSIDE DOWN AND SHAKE NOTHING FALLS)
What is a CAT B fitout?
A CAT-B fitout overlays the CAT A provision with bespoke elements specific to the buildings user to allow the tenant to occupy and use the space.
(TURN UPSIDE DOWN AND SHAKE SO EVERYTHING FALLS)
Can include branding etc
Where can you find definitions for these?
The British Council of Offices (BCO) fitout guide
What is BWIC?
Builders Work in Connection and is usually set as percentage of the services cost.
BWIC accounts for the main contractor to perform any drilling, fixing, cutting and penetrations to enable the services installation.
What is an order of cost estimate?
Under NRM this is described as the determination of the possible cost of a building early in design stage in relation to the employer’s in relation to the employer’s fundamental requirements.
This takes place prior to preparation of a full set of working drawings or bills of quantities and forms the initial build up to the cost planning process.
What is the purpose of an order of cost estimate?
To establish if the proposed building project is affordable and if affordable to establish a realistic cost limit
The cost limit is the maximum expenditure that the client is prepared to spend on the proposed building project.
What is the format of a feasibility estimate or order of cost estimate?
-This can be presented on a cost per m2, functional unit or elemental basis.
- It may also be presented as a range
may consist of element rates for the main elements of the building
any site abnormal costs or enabling works are also considered
Other inclusions are prelims, contingency, inflation and location factor adjustments
What is a functional unit?
A functional unit is a unit of measurement that considers the prime use of the building
eg cost per bed
Where would you get your rates from for a preliminary estimate?
- Previous similar projects and historical cost data such as previous tender submissions, contract sum analysis
Other sources may include estimating price books such as SPONS, BCIS (Building Cost Information Service) or specialist contractors
What information do you need to be able to carry out an order of cost estimate?
- Building location
- Type of building
- Floor area or number of functional units
- Storey height
- Whether raised access floors or deep suspended ceilings are envisaged
- Initial floor plans, roof plans, elevations and sections
- Requirements for refurbishment to existing buildings and enabling works
- Indication of specification and equality
- Indicative programme, procurement and contract strategy
- Budget and cash flow constraints
- Site conditions, probable ground conditions
- Indicative M&E design intent, availability of utility services and the sustainability strategy
- Details of prof fees, development costs, VAT and inflation
What is a cost plan?
This presents the estimated cost of the development into an elemental or functional format
It shows how the design team proposes to distribute the funds available on the different elements of the proposed building.
What is the purpose of a cost plan?
It is used by the cost consultant to control the development of the design within the client budget.
It identifies the client’s agreed cost limit and advises how the money is to be allocated to the different elements.
When would you produce a cost plan?
A formal cost plan is typically between RIBA Stage 2 and 4
At stage 2 (CONCEPT DESIGN), an initial concept design is made available and the cost plan may be produced to a fairly high level. The cost plan may be broken down into the different elements of the building based on outline specs and arch conceptual drawings
At stage 3- (SPATIAL COORDINATION) is undertaken and the schedule of accommodation may be adjusted and the cost plan is updated to reflect this.
At stage 4 (TECHNICAL DESIGN) - Cost plan updated to reflect updated designs, specialist subcontractor designs may be available to support
NRM1 CATEGORIES
When issuing a cost plan what are the components?
Title Page
Contents
Exec Summary
Summary/Overview of project
Project Description
Construction Costs
Preliminaries
Contractors OH&P
Contingency
Inflation
Inclusions/Assumptions
Exclusions
Area Schedule
List of drawings and specifications adopted
RIBA STAGES
STAGE 0 STRATEGIC DEFINITION
STAGE 1 PREPARATION AND BRIEF
STAGE 2 CONCEPT DESIGN
STAGE 3 SPATIAL COORDINATION
STAGE 4 TECHNICAL DESIGN
STAGE 5 MANUFACTURING AND CONSTRUCTION
STAGE 6 HANDOVER
STAGE 7 IN USE
What is usually excluded in a cost estimate?
VAT
Professional Fees
Client Direct Costs
Loose Fixtures and Fittings
Inflation
Site acquisition costs
Section 106 Agreement
Removal of asbestos
Why is VAT excluded?
Different clients will incur different levels of VAT
We would not be in the position to know the correct rate unless advised of it
What is contingency?
A sum included within the estimate to cover unknown expenses or unmitigated risks during the project
How is contingency assessed?
The amount include should reflect the risks and unknown specific items associated with the project
During the early design stages a contingency allowance can be included as an overall percentage of the cost estimate at around 5-10%
As more design information becomes available a risk register can be compiled and each item assigned a probability and cost impact (worst case). The total cost of risk register items can then be included as the project contingency.
How do you account for inflation when preparing a cost estimate?
I take into account inflation through the use of Tender Price Indices and include adjustments for Construction inflation and tender price inflation
What time period would construction inflation be included for?
I would allow for construction inflation from the anticipated start of the project to the mid way point of the project
The midpoint of a construction project is used as a reference point for construction inflation because it’s where the balance point for spending usually falls. This is typically around 50–60% into the construction schedule.
Construction inflation is an allowance for fluctuations in the prices of labour, plant and equipment, and materials during the period from the date of tender return to the mid-point of the construction period.
What is meant by the base date within a cost estimate?
The base date refers to the date on which rates and prices contained within a cost estimate are based on.
These are included for the basis of calculations e.g. inflation.
What is TPI?
Tender Price Index
What do TPIs show?
They reflect changes in the level of tender prices over a period of time.
The price adjustments take into account the level of inflation depending on current and forecast market conditions.
Where can you obtain Tender Price Index Information from?
BCIS
Larger cost consultancies can produce their own in-house tender price forecasts
