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MY RICS APC > Design Economics and Cost Planning > Flashcards

Design Economics and Cost Planning Flashcards

1
Q

What types of estimate are there?

A

Budget / feasibility
Cost estimate
Cost plan

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2
Q

What is a feasibility estimate?

A

A high level exercise to assess whether a project is financially viable and to set an outline budget for the scheme

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3
Q

What is the format of a feasibility / budget estimate?

A

Rate per m2 or per functional unit

May be presented as a range

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4
Q

What is a functional unit?

A

The ‘factors which express the intended use of the building better than any other’
E.g. number of bedrooms in a hotel, number of beds in a hospital

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5
Q

What information do you need to be able to carry out a feasibility estimate?

A 
Type of building (function)
New build or extension
Location
Size
Indication of quality
Site visit
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6
Q

What is the % error on a feasibility estimate?

A

10%

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7
Q

What is a cost estimate?

A

A forecast of the possible cost of a building based on historical data

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8
Q

When would you do one?

A

Stage C/D

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9
Q

What are the principal components of a cost estimate?

A 
Construction cost
Preliminaries
Contractor’s OH&P
Contingency
Inflation
Assumptions – programme
Exclusions
Area Schedule
Basis of Estimate – drawings / specifications list
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10
Q

Name the main elements of an elemental estimate

A

Substructure – excavation and substructure
Superstructure – frame, upper floors, external walls, roof, internal finishes
Services
External works

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11
Q

What is usually excluded from a cost estimate?

A 
Professional fees
VAT
Client decant costs
Loose fixtures and fittings
Inflation
Site acquisition costs
Section 106s
Removal of asbestos
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12
Q

Why is VAT excluded?

A

Because different clients will incur different levels of VAT, and might not be applicable.

We would not be in a position to know the correct rate unless informed of it

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13
Q

What is the % error on a cost plan?

A

5%

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14
Q

What is contingency?

A

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

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15
Q

How is contingency assessed?

A

The amount included should reflect the risks and unknowns specific to the project.
During early estimates when little information is available it is common to include a %
At the end of stage C it is usually 10%
This should reduce as more information becomes available and the unknowns decrease
At the end of Stage E it is usually 5% (2.5% design and 2.5% construction contingency)
It is common to have a higher % for refurbishment work due to the higher level of unknowns and therefore risks

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16
Q

What are preliminaries?

A

They define the scope of works
Include the project particulars, lists of drawings, desciprtion of the site, scope of work, details of management arrangements
Often contain items for pricing which are general items needed by the contractor to carry out the work that cannot be attributed to specific items of work

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17
Q

Where do you find the guidelines to prepare preliminaries?

A

NRM2 (used to be SMM7)

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18
Q

Name some preliminaries sections

A

NB This is SMM7 and needs revision *****

A10 – project particulars
A54 – provisional sums

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19
Q

What should be considered when assessing preliminaries levels?

A

Length of contract
Location – accessibility, space restrictions, accommodation possibilities etc
Type of project – new build / refurb, tower / one story etc
Size of project
Need for temporary works
Need for security
Limitations on method and sequencing of works, working hours – supervision requirements
Sectional completion
Availability of services
Level of contractor’s designed works

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20
Q

How do you take account of inflation when benchmarking / cost estimating?

A

Through the use of TPIs

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21
Q

What does TPI stand for?

What do TPIs show?

A

Tender Price Index

They reflect changes in the level of pricing contained in the lowest accepted tenders for new work to take account of market conditions – compares against base rates

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22
Q

Where can you get this information from?

A

BCIS

DL TPI forecasts – published in Building

In house forecasts

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23
Q

How do you take account of location, and why do you need to take account of location?

A

Through the application of location indices

Different market conditions in different locations

Different cost of materials, different wage rates etc – impact on tender levels

24
Q

What does BCIS stand for, and what is it?

A

Building Cost Information Service

Provides construction cost and price information through publications, online services and price books

25
What is a cost plan?
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.
26
What is the purpose of a cost plan?
It is used by the cost consultant to control the development of the design. It identifies the client’s agreed cost limit and how the money is to be allocated to the different parts of the building.
27
What is the difference between a cost estimate and a cost plan?
Cost plan is a plan of costs for the works in preparation for turning into a cost report to check against. Estimate is a forecast of construction cost
28
What is buildability?
Harnessing the contractor’s expertise and knowledge during the design stage
29
What are the advantages of buildability?
Better programming, sequencing and construction methods – a quicker construction time Lower capital and life cycle costs Improved quality in the finished building’s performance and maintenance characteristics
30
What is a wall to floor ratio?
This shows the relationship between wall area and floor area It is used to show the cost efficiency of the building The lower the ratio the cheaper the building as there is less external wall area per m2 of floor area
31
What is the most efficient shape?
A circle BUT this is not the most practical shape as it has a poor lettable floor area – difficult to fit out THEREFORE a square is the best
32
What is the difference between cost and price?
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
33
What information would you expect the design team to provide at stage D?
Detailed design information approaching that of tender documentation.
34
How would you prepare an estimate for M&E works?
I would ask an M&E specialist surveyor to undertake the estimate. For feasibility estimates the M&E amount would be included in the m2/functional unit rate
35
What is GEA?
Gross External Area This is the area of the building measured externally at each floor level
36
What is GIA?
Gross Internal Area This is the area of the building measured to the internal face of the perimeter wall at each floor level Excludes external open sided balconies, fire escapes, canopies, external walls, fuel stores
37
What is NIA?
Net Internal Area This is the area of usable space measured to the internal face of the perimeter wall at each floor level Excludes the above and internal structural walls and columns, spaces with headroom less than 1.5m, corridors and circulation space used in common, permanent lift lobbies, toilets, cleaners cupboards, plant rooms
38
Where are all of these defined?
The Code of Measuring Practice, 6th Edition, published by the RICS
39
What is the purpose of the Code of Measuring Practice?
Provides precise definitions to permit the accurate and consistent measurement of buildings
40
What would you expect the percentage of NIA to GIA / GEA to be?
It depends on the type of project being undertaken (school, hospital, office etc…) If it were an office build I would expect the NIA to GIA to be in the region of 70–85%, where 70% is not good and 85% is excellent.
41
Where do you get cost information from?
``` In house historic data Benchmarks BCIS Building cost models SPONS and other price books (Laxtons etc) Sub contractors and suppliers ```
42
What do you measure in accordance with?
NRM2 (was SMM7)
43
What does NRM2 (SMM7) stand for?
New Rules of Measurement 2 – Detailed measurement for building works (Standard Method of Measurement, Edition 7)
44
What does it do?
NRM2 has been developed as a set of detailed measurement rules for the preparation of either bills of quantities or Schedules of Rates for either capital or maintenance projects. It does however deal with the quantification of non–measurable work items, contractor designed works and risks.
45
How do you measure steel under SMM7 – and what other items would you measure in association?
Under SMM7 steel is measured in Tonnes. Other items to measure in association with steelwork include framing erection, permanent formwork, cold rolled purlins and cladding rails, isolated structural member, filing hollow sections, surface preparation, surface treatment and localised protective coating. (G)
46
How do you measure brickwork walls under SMM7 – and what other items would you measure in association?
``` Under SMM7 brickwork walls are measured in m2. Other items to measure in association with brickwork include: Isolated piers, Isolated casings, Chimney stacks, Projections, Arches, Brick reinforcement, Sundry items, Forming cavity, Closing cavities ```
47
When did NRM2 replace SMM7?
NRM2 was published in April 2012. It became operative on 1 January 2013 and replaced the Standard Method of Measurement, seventh edition (SMM7) on 1 July 2013. SMM7 should no longer be adopted after July 2013.
48
What is NRM1?
NRM1 – Rules for order of cost estimating and elemental cost planning Published in March 2009 and has been reasonably well received and adopted by the profession. It has since been amended and the second edition was launched by the RICS in 2012
49
What is a Section 106 agreement?
They are also referred to as planning obligations They are typically agreements between local authorities and developers negotiated in the context of granting planning consent
50
What sort of things is the money spent on?
Affordable housing New open space or environmental improvements New roads and transport capacity Health and education facilities
51
What is construction to ‘shell and core’?
The basic structure, services and envelope of the building AND the fit out of landlord / common areas E.g. reception, toilets, lifts, cores, base services are terminated at breakout points to floors, life safety services infrastructure
52
What is a CAT A fit out?
Also known as a ‘developer’s fit out’ Provides the generic requirements to suit most developers E.g. life safety elements and basic fittings – suspended ceiling tiles, raised floors, carpet, lighting, power distributed to floor plates
53
What is a CAT B fit out?
Overlays the CAT A provision with bespoke elements particular to the needs of the building user to enable the tenant to occupy and use the space E.g. partitions, power distributed to floor boxes, data cabling, artwork and branding, upgrading CAT A finishes and toilet finishes etc
54
Where could you find the definitions for these?
British Council of Offices (BCO) fit out guide
55
What is BWIC?
BWIC stands for Builders Work In Connection and is usually set as a percentage of the services cost. Depending on the size of the job and complexity will determine the percentage of BWIC. BWIC accounts for any drilling, fixing, cutting etc… that the builders do whilst undertaking the services. BWIC can be measured in accordance with NRM2 when doing a BOQ’s.
56
What cost would you expect for a new build city centre office tower in London? What cost would you expect for a CAT A fit out to that office? What about a CAT B fit out?
If you have worked on these types of project, have a range in mind
57
What cost would you expect for a retail shopping centre? What cost would you expect for a warehouse? What cost would you expect for a hotel? What cost would you expect for city centre residential tower?
If you have worked on these types of project, have a range in mind

MY RICS APC (9 decks)

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