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RICS APC Technical QS > Design Economics & Cost Planning > Flashcards

Design Economics & Cost Planning Flashcards

1
Q

What are the RIBA Stages?

A 
0 - Strategic Definition 
1 - Preparation & Brief 
2 - Concept Design 
3 - Spatial Co-ordination 
4 - Technical Design 
5 - Manufacturing + Construction 
6 - Handover 
7 - Use
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2
Q

What is NRM 1?

A
  • Rules for Order of Cost estimating + Cost planning for Capital Building Works
  • Best Practice Guidance Note
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3
Q

How is the NRM1 set out?

A

NRM1 comprises four parts:
• Part 1 sets out the context and definitions.
• Part 2 explains how to prepare an order of cost estimate.
• Part 3 explains how to prepare an elemental cost plan.
• Part 4 provides tabulated rules of measurement for the preparation of cost plans.

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4
Q

What areas does the NRM1 provide guidance for?

A
  • Facilitating works
  • Building works
  • Main contractor prelims
  • Main contractor OHP
  • Project/ design team fees
  • Other development costs
  • Risk (4 types)
  • Cost limit
  • Inflation
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5
Q

What is benchmarking?

A

Benchmarking is a tool for assessing and comparing performance in order to achieve continuous improvement. It is part of a total quality management process

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6
Q

How did you benchmark costs within your estimate?

A

I used in house indices that allow costs to be analysed.

This establishes a data base of similar projects cost data that can be used to assist in price future prices.

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7
Q

Give me an example of where you have given advice about the predicted costs of a construction project?

A

I joined the Silvertown project mid way through the tendering period and assisted in the commercial management of suppliers that were undertaking site surveys as part of the information that would be given to the tenderers. The staff resource was for internal staff. I worked with the programme manager to establish the ongoing project requirements and how these will change going forward.

  • Firstly I identified the key positions that were needed throughout the life of the project.
  • Then I calculated the number of hours that were likely to be needed per role
  • I inserted this into a spreadsheet that fed into the cost plan and the hours were fluctuated against stage of the project.
  • I linked this to the hourly rate for the position to determine the costs.
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8
Q

On Beckton Depot value engineering exercise how did you conclude the site accommodation should be moved from one project to the other?

A

I reviewed the main programme of works for DLR project and realised there was an opportunity to utilise time in between the enabling works and awarding the main contract to procure the site accommodation concurrently to have it established for the main contractor to start works straight away. I suggested to the Project Manager that as the site accommodation was intended beyond the duration of the main contractor for additional contract works that exploring this option could save time and reduce costs through no fees. This was the planned approach but due to Covid-19 the time gains were lost and the accommodation was moved back in to the Main Contract.
I spoke to multiple suppliers to understand the cost of rental, including all the services that were needed, including generator, sceptic tank and water bowser until more permanent solutions could be installed. I enquired about purchasing the welfare for the project but the disposal or buy back options at the end did not make it viable. If it could be used on more projects then it may have made better financial sense.

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9
Q

What is the BCIS?

A

BCIS is the Building Cost Information Service of the Royal Institution of Chartered Surveyors (RICS).

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10
Q

What is the purpose of a cost plan?

A
  • 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.
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11
Q

On cycle Quietway project how did you produce the cost plan?

A

To produce the cost plan I only had feasibility information and the brief from the client. They were able to tell me the likely route of the Quietway and what sort of path they intended for the route.

  • Establish the employers requirements
  • Understand the design – in this case route and basic requirements
  • Location
  • Timeframe
  • Site conditions
  • Procurement route
  • Prelims
  • OH and P
  • Assumptions
  • Exclusions

For me to then offer a cost appraisal I used previous projects costings per metre value for different cycleway layouts and applied it to the proposed route to. I also advised on the number of junctions and trees that the cycleway might intersect as this adds additional costs.

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12
Q

How have you advised on buildability?

A

Looking at the defined route to see what obstacles and restrictions are likely to increase costs ie trees

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13
Q

What are prelims?

A 
They are the costs that are directly related to the running of the project that are not accounted for under labour or material.
•	Staff costs
•	Welfare
•	Staff provisions
•	Security
•	Safety
•	insurances
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14
Q

What Exclusions I have made on the cost estimate?

A
  • Inflation as project was not long enough
  • Contaminated land – Programme risk
  • Leasing the land fees – Programme budget
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15
Q

What assumptions have you made in a cost estimate?

A
  • Weekday working normal working hours
  • Security in the day only
  • Existing perimeter fencing provides adequate security
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16
Q

What are the purposes of a cost plan, other than cost control?

A
  • Develop employer and designer awareness of cost proposals and desires
  • Ensure employers get value for money
  • Advise designers on practical and balanced design within budget
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17
Q

What is the importance of a cost plan?

A

To understand in an elemental form the costs of the project and how to control the costs. To inform the design team in changes to reflect the cost.

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18
Q

What is an order of cost estimate report?

A

This where you present the order of cost estimate to the client.
This will show the forecast output costs including project/design fees, project costs, risk allowances, inflation

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19
Q

Give me an example where you have given advice about the development options /sensitivity analysis/risk analysis/VE options in relation to a development design.

A

Whilst working for the Surface transport team in producing a cost estimate as part of the Quietway cycle scheme in south east London I advised the route and cycle path could be varied to accommodate the client’s budget. On busier road sections using a physically separated road cycle path would be more a more expensive option in terms of construction and space requirements but increase safety. On quieter sections the use of a shared in roadway bikeway could be utilised to extend the cycle path along the intended route and remain within the client’s budget.

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20
Q

What is an order of cost estimate?

A

The determination of possible cost of a building(s) early in design stage in relation to the employer’s fundamental requirements.

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21
Q

What is typically included in an order of cost estimate?

A
  • Facilitating Works
  • Building Works
  • Main Contractor Overhead
  • Profit Project/Design Team Fees
  • Risk Allowance
  • Inflation
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22
Q

What exclusions might you make in an order of cost estimate?

A
  • VAT
  • Inflation
  • Legal costs
  • Planning costs
  • Unexpected ground conditions
  • Land acquisition costs
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23
Q

What is the purpose of an order of cost estimate?

A

The purpose of an order of cost estimate is to establish if the proposed building project is affordable and, if affordable, to establish a realistic cost limit for the building project

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24
Q

When would you prepare an order of Cost Estimate?

A

RIBA Stage 0 - Strategic Definition + RIBA Stage 1 - Preparation and Briefing

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25
Q

What information do you need to be able to carry out an order of cost estimate?

A
  • Location
  • Purpose
  • Floor Area
  • Indicative Programme
  • Site Conditions
  • Any exclusion of inclusion requirements (EG design team fees)
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26
Q

What types of estimate are there?

A
  • Order of Cost Estimate
  • Cost Estimate
  • Base Cost estimate
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27
Q

What is a cost estimate?

A

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

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28
Q

What is a Base cost estimate?

A

The base cost estimate is the sum of the works cost estimate, the project/design team fees estimate and the other development/project costs estimate. Not including risk or inflation.

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29
Q

What are the principal components of a cost estimate?

A
  • Construction cost
  • Preliminaries
  • Contractor’s OH&P
  • Contingency/risk allowance
  • Inflation
  • Assumptions
  • programme
  • Exclusions
  • Area Schedule
  • Basis of Estimate
  • Drawings / specifications list
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30
Q

Give me an example of where you analysed market factors/trends/historic data in a cost report to a client?

A

When working on Beckton Depot, the Project Manager had taken an old quote from a supplier on a previous project and presented for use. I advised the Project Manager that his quote would need to be substantiated with further cost analysis. Once I carried this out, a more accurate figure could be used in the project estimate.

31
Q

On Beckton depot what further cost analysis did you do to substantiate the Project Managers quote?

A
  • Bring the data up to date
  • Make sure it factored the East London location
  • Most accurate to contact local suppliers to get current up to date quotes rather than adjust his quote.
  • Speak to suppliers for up to date quotations
32
Q

What can you do to adjust costs for time and location?

A

Indices can be used which set a base for project data. Indices that can be used are cost and time.

33
Q

Give me an example where you have analysed market factors/trends/historic data in a cost to a client?

A

Whilst working on Beckton depot enabling works I advised the client the impact of COVID-19 is likely to give tender returns higher than the initial cost estimate. This was due to the restrictions in line with government guidelines to make the construction site adhere to distance rules, larger welfare and uncertainty around market conditions. Also the supply of labour could be reduced with staff being furloughed.

34
Q

What is a cost analysis?

A

A systematic breakdown of existing cost data to allow for an extent of examination and comparison with other similar projects.

35
Q

What do you understand by the term VE?

A
  • Value Engineering - An organised approach aimed at providing the necessary functions at the lowest cost, without detrimental effect to Quality, reliability, performance or delivery
36
Q

What do you understand by the term VM?

A
  • Value Management: - Assesses the broader concept of value for the whole project and ensures it meets the client’s objectives. - Requires input at inception phase from all stakeholders - This will ensure right decisions are made and the right design is chosen
37
Q

What happened during the VE process to move site accommodation?

A
  • Project team brought together
  • Brainstorm ideas guided by project manager
  • I suggested the accommodation procurement would take time and could be moved to the main contracted works to save time.
  • Wasn’t an additional cost but saved time and required less management resources.
38
Q

Can you explain to me the VM process?

A
  • Workshops held where Client must make important decisions
    1. VM 1- concept: The need to build, clear objectives set that are structured in a value tree
    2. VM2- Feasibility: Outline brief complete, outline brief costed.
39
Q

How would you assess preliminary’s costs?

A

Assess the project team resources listed – duration of time allocated

Assess items that are included as part of the bid – welfare facilities, security, health and safety

Is it adequate and reasonable – how does it compare to other bids and pre tender estimate?

40
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
41
Q

Why is VAT excluded from a Cost Estimate?

A

Because different clients will incur different levels of VAT, might not be applicable - We would not be in a position to know the correct rate unless informed of it

42
Q

How do you account for inflation and location when benchmarking?

A
  • Internal indices are set within TfL that are applied

* External sources such as BCIS can also be used.

43
Q

How do you measure inflation?

A

Apply a single percentage rate to the cost limit – either use publish figures or in house indices.

44
Q

What is project indexation (indices)?

A

A location factor will look at the country, region and district The Time Period index will look into the time period in quarters,

45
Q

What is the reason for applying inflation?

A

An allowance included in the order of cost estimate or cost plan for fluctuations in the basic 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.

46
Q

How and why do you 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

47
Q

What are external factors that can affect cost?

A
  • location of the building project
  • State of the construction economy (and general economy) at the point in time when construction cost is established
  • Labour supply
  • Material Supply
48
Q

How have you interrogated historical cost data?

A

Need to have an up to date record of costs.
On surface transport projects actively fed latest data back to central estimating team
Categorise the data so it can be compared across projects – ie percentage on prelims
Understated cost estimates, need finished project costs.

49
Q

What are the 3 NRM books?

A
  • NRM 1 Order of cost estimating and cost planning
  • NRM 2 Detailed measurement for building works
  • NRM 3 Building Maintenance Works
50
Q

Why did the NRM replace SMM7?

A
  • There was no distinguish between cost estimates, plans and B of Q.
51
Q

What is the NRM3?

A

Order of cost estimating and cost planning for building maintenance works.
NRM3 provides a structured basis for measurement of building maintenance works

52
Q

What is an elemental cost plan?

A
  • 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.
53
Q

What is the purpose of an elemental Cost plan?

A

An elemental cost plan is a detailed cost plan which is broken down into a series of elements. Initially, the elemental cost plan will simply be the total construction cost for the project divided into elements on a percentage basis.

54
Q

How would you deal with a cost plan that is over the client’s budget?

A

Sit down with the client and explain the elements of the cost plan that have been higher than expected and consider value engineering options to reduce the cost in line with the budget.

55
Q

What are the three types of lifecycle costs?

A
  • Construction costs
  • Maintenance costs - (planned and preventive maintenance)
  • Operation costs (soft facilities management - all costs incurred in running and managing the facility - IT services, cleaning, waste management, catering, rent, insurances, utilities)
56
Q

What are life cycle costs?

A
  • The costs that will be incurred over a defined period of operating and maintaining a building e.g., repair, maintenance, replacement, cleaning, decorating, services provision
57
Q

Where can you get Life Cycle Cost data from?

A
  • Unstructured historical data - estate managers
  • Structured historical data- BCIS running cost analysis
  • Data from modelling
  • Data from manufacturers, suppliers and specialist contractors
58
Q

What is the difference between life cycle costing and whole life costing?

A
  • Life cycle cost accounts for all relevant costs over a defined period of time (the period of analysis).
  • Whole life costs can include costs associated with the provision of construction works that are not included in the client’s costs.
59
Q

Why is lifecycle costing carried out?

A

• To carry out an option appraisal (to decide which option is preferable in cost terms) over a period of time. • To predict a cashflow (perhaps to construct a budget)

60
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
61
Q

What is buildability?

A
  • Harnessing the contractor’s expertise and knowledge during the design stage
62
Q

What are the advantages of buildability?

A
  • 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
63
Q

What is GEA?

A
  • Gross External Area - This is the area of the building measured externally at each floor level
64
Q

What is GIA?

A
  • Gross Internal Area - This is the area of the building measured to the internal face of the perimeter wall at each floor level
65
Q

What is ICMS?

A

The International Construction Measurement Standards (ICMS) is an international standard which aims to provide greater global consistency in construction costing. It is not a detailed method of measuring construction works, but ‘a high-level benchmarking and reporting framework for international cost classification, reporting and comparison.’

66
Q

What is the IPMS?

A

The IPMS is a professional statement that needs to be adhered to by all RICS members unless clients advise that IPMS reports are not required. The aim of the statement is to ensure that all members are measuring works in a consistent way.

67
Q

Where are NIA, GEA and GIA defined?

A

The Code of Measuring Practice, 6th Edition, published by the RICS

68
Q

What is the difference from ICMS and IPMS?

A

The ICMS project followed work on the development of International Property Measurement Standards (IPMS). IPMS established standards for measuring the floor areas of buildings. For ICMS, a key element was that ICMS would be compatible and accord with IPMS.

69
Q

What can affect the cost of a construction project?

A
  • Size
  • Location
  • Quality
  • type of contract and risk associated,
  • number of tenderers
  • specification of the works
  • materials
70
Q

Why are costs different in different locations?

A
  • Wages
  • Site logistics
  • Proximity to services and supplies
  • Availability of labour
  • Cost of Labour
71
Q

What is the difference between tender inflation and construction inflation?

A

Tender inflation is from estimate base date to tender return date. Construction inflation is from date of tender to mid-point of construction

72
Q

What is BIM?

A

Building information modelling. NOT a software - It is a PROCESS It provides architecture, engineering and construction professionals information and tools to efficiently plan, design, construct and manage buildings and structures

73
Q

What are the benefits of BIM?

A

1) Improved visualisation of the project,
2) communication of design
3) Reduced re-work

RICS APC Technical QS (8 decks)

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