Design Economics and Cost Planning

Question 1

What is BCIS?

Answer 1

The Building Cost Information Service, this provides cost and price information on a range of different projects and materials in the construction industry.

Question 2

Where does BCIS data come from?

Answer 2

Data comes from real life projects, where members of the construction industry provide real project cost information that once reviewed by BCIS staff is uploaded into the vast database.

Question 3

Take me through the RIBA stages of cost planning.

Answer 3

Stage 0: Strategic Definition

Unlikely an estimate will be issued at this stage.

Stage 1: Preparation & Brief –

Likely to be an estimate based on functional unit method – Formal Cost Plan 1

Cost limit agreed with client

Feasibility estimate carried out

Stage 2: Concept Design –

Elemental Cost Plan based on Cost/ m2 GIFA

Cost based on cost analysis of similar previous projects

Stage 3: Spatial Coordination –

Elemental Cost Plan, measured from drawings where possible – Formal Cost Plan 2

Cost/m2 GIFA applied where sufficient detail not available

Stage 4: Technical Design –

Updated Elemental Cost Plan – Formal Cost Plan 3

Question 4

What factors need to be taken into account when using secondary source data?

Answer 4

Costs may need updated to account for location and time factors, this can be through the use of the tender price index which charts the movement of tender prices.

The formula: New Index – Old Index, Over Old Index – This gives the percentage uplift to be applied to the sample project costs.

Question 5

What other sources of cost data are there?

Answer 5

Price Books

Trade Journals

In house Information i.e. previous bills of quantities and cost plans etc.

Question 6

What are the main drawback of using historical data?

Answer 6

Market Trends

Out of date

Not having a complete knowledge of the historical data

Inaccuracies and inconsistencies

Question 7

What is the difference between a feasibility estimate/order of cost and a cost plan?

Answer 7

A estimate is a forecast of possible cost of a building based on historical data, in the case of a feasibility its purpose is to determine whether the project is financially viable.

Cost Plans provide a breakdown of the total estimated cost and show the money is to be spent on different elements of the building.

Question 8

Which NRM is applicable to cost planning?

Answer 8

NRM1 – Order of Cost Estimating and Cost Planning

Question 9

What type of ‘exclusion costs’ are there?

Answer 9

Common exclusions are:

Asbestos

Professional Fees

Vat – Different client will incur difference levels of VAT

Loose fixtures and fittings

Inflation

Site acquisition costs

Question 10

When looking at affordability of a project what client/stakeholder factors do you take into account?

Answer 10

It is important to inform the client of was the budget estimate includes and excludes.

For example, common exclusions are:

• Professional Fees
• Vat – Different client will incur difference levels of VAT
• Loose fixtures and fittings
• Inflation
• Site acquisition costs

The client should therefore be advised that the total estimate provided by the QS, may not contain certain costs that he will incur.

Question 11

What is an elemental cost plan?

Answer 11

Cost Plans provide a breakdown of the total estimated cost and show the money is to be spent on different elements of the building

Question 12

What is Life Cycle Costing?

Answer 12

Life cycle cost is the cost of a building throughout its life taking account of initial costs and all future costs, e.g. maintenance, operation and occupancy costs, as well as end of life costs.

Life cycle cost calculations are an attempt to price as many as possible of the factors affecting the value of a building and to bring them into a single cost. This cost can then be compared with other design solutions, taking into account factors such as appearance, comfort and convenience, which are difficult to price and depend on personal judgement.

Question 13

What is whole life costing?

Answer 13

The whole life cost includes the life cycle cost plus other costs such as the cost of the site, cost of financing the project, etc.

Whole life costs therefore relate to the overall development, whereas life cycle costs relate to the building only.

Question 14

What document details how a cost plan is to be created and the rules associated?

Answer 14

NRM 1

Question 15

What are the 3 methods detailed in this document for compiling a building works estimate?

Answer 15

1. Functional unit method
2. Floor area method
3. Elemental method

Question 16

According to NRM1 what is an EUR?

Answer 16

Element Unit Rate

Question 17

According to NRM1 what is an EUQ?

Answer 17

Element Unit Quantity

Question 18

What are the RIBA stages?

Answer 18

• 0 - Strategic Definition
• 1 - Preparation and Brief
• 2 - Concept Design
• 3 - Spatial Coordination
• 4 - Technical Design
• 5 - Manufacturing and Construction
• 6 - Handover
• 7 - In Use

Question 19

What is a functional unit?

Answer 19

A functional unit is a term used to describe the desired unit of an accommodation in relation to a certain type of building and is used to calculate early stage cost estimates for those particular types of building. Examples of the type of building and the respective functional unit would be :

Hotel = Cost per bedroom
Hospital = Cost per bed
School = Cost per desk
Car Park = Cost per car parking space

Question 20

What is GIFA? What should you measure for that? Does it include the atrium?

Answer 20

GIFA is the gross internal floor area, it is the area of the building measured to the internal face of the perimeter walls at each floor level. According to RICS Guidance Note - Code of Measuring Practice all atria, with clear height above, are to be measured at base level only, meaning that where they occur over multiple floors, they should be excluded on upper floors and included only on the base floor.

Question 21

What is buildability?

Answer 21

The simplest way to describe buildability is in terms of deigning and constructing, in that where designers think, contractors do, buildability is the integration of the thinking process and the doing process giving a practical rationale to the design process.

Question 22

What is a TPI?

Answer 22

A Tender Price Index, Tender Price Indices reflect changes in the level of pricing contained in the lowest accepted tenders for new work to take account of market conditions – compared against base rates

Question 23

What is a PC Sum?

Answer 23

A PC sum is a Prime Cost sum. PC Sums are a sum of money included in a unit rate to be expended on materials or goods from suppliers, they are supply only rates for materials or goods where the precise quality of those materials and goods are unknown. PC Sums exclude all costs associated with fixing or installation, and design fees, preliminaries and overheads and profit for both main and sub contractors.

Question 24

When is the Elemental method of building works estimate mentioned in NRM1 used and how is it calculated?

Answer 24

A means of determining a budget. Provides an order of cost estimate based on an elemental breakdown. Calculated using element unit quantities and element unit rates.

Used when you have more drawing information so you are able to identify works specific to the project.

Question 25

When is the Floor Area method of building works estimate mentioned in NRM1 used and how is it calculated?

Answer 25

A means of calculating the total building works estimate (unit rate x GIFA). Also used for benchmarking similar projects.

Used for high level, early inception cost plans.

How is it calculated: By multiplying EUR’s and EUQ’s (which is your GIA or NIA) to make a Building Works Estimate.