Design Economics & Cost Planning Flashcards
What are the typical responsibilities of the cost manager on a construction project?
Pre-contract:
- Producing OoCEs
- Analysing tender bids
- Producing tender recommendation reports
Post-contract:
- Assessing contractor’s interim payment applications (valuations)
- Producing cost reports
- Producing cost plans
- Negotiating and agreeing final accounts.
(Value engineering, Preparing pricing documents for tendering)
What things do you benchmark?
- Rates
- Costs
- Key metrics (£/ft2 GIA, £/ft2 NIA, £/functional unit, £/key, wall:floor, net:gross).
What is wall:floor ratio?
- Calculated by dividing the total external wall area by the GIA (excludes any basement floor area).
- Indicates the proportion of external wall required to enclose a given floor area.
- Lower wall:floor values are more efficient and economical - allows comparison of different proposals
How can wall:floor ratio be improved?
- Lower storey height
- Reduce floorplate perimeter length
- More efficient façade articulation e.g. not zig zag
- Less inset balconies (these give higher wall:floor ratios)
What’s a typical wall:floor ratio for a commercial building?
Typially between 0.35 - 0.5
Wall:floor can vary a lot across different buildings. On Project Vista it is 0.43 (so around average). This is influenced by:
- Relatively average storey height of 3.85m
- Fairly efficient floorplate shape (rectangular/square)
- Efficient façade articulation
- No inset balconies.
- However, building is split into 2 towers on 8 storeys, so less efficient in that respect.
What is a typical storey height of a commercial building?
Typically between 3.8-4m
This is influenced by:
- floor build up
- slab type
- floor to ceiling height
- ceiling void requirements (influenced by MEP and frame)
What is net:gross ratio?
- Calculated by dividing the total NIA by the total GIA
- Indicates the proportion of usable area in the building
- Higher net:gross values are more efficient - allows comparisons of different proposals
How can net:gross ratio be improved?
- Suitable plant strategy e.g. plant on roof
- Reduce core sizes
- Suitable building frame
- Reduce façade thickness
- Increase nr of stories
- Change floor plate shape
- Less BoH requirements
- Use class split
- Multi-tenant let floors
What’s a typical overall net:gross for a commercial building?
Typically between 63-70%, depends on building’s floorplate size and nr of storeys
What’s a typical ground & above net:gross for a commercial building?
Typically between 67-80%, depends on building’s floorplate size and nr of storeys
What’s a typical net:gross of a typical upper floor in a commercial building?
Typically between 70-85%, depends on building’s floorplate size and nr of storeys
If you are producing estimates and cost plans, which measurement rules represent industry best practice for capital building and building maintenance works in the UK?
New Rules of Measurement (NRM)
What is NRM1?
New Rules of Measurement 1 - Order of cost estimating and cost planning for capital building works
Provides guidance on:
- quantifying building works for preparing order of cost estimates and cost plans.
- quantifying wider costs such as prelims, OH&P, project and design team fees.
What is the structure of NRM1?
- General Introduction
- Contextualises cost estimating in terms of RIBA Plan of work and OGC Gateway process
- Purpose
- Use - Measurement rules for order of cost estimating
- OoCEs: purpose & constituents.
- Floor area, functional unit, elemental methods
- Measurement rules for MC prelims, OH&P, project & design team fees etc for OoCEs - Measurement rules for cost planning
- Cost Plans: purpose & constituents.
- Measurement rules for MC prelims, OH&P, project & design team fees etc for cost plans - Tabulated rules of measurement for elemental cost planning
- Explains how to measure the elements of a cost plan, for each component it gives a UoM, measurement rules, inclusions and exclusions.
Group elements 0-14 (Facilitating works, sub, super, internal finishes etc…)
- Element
- Sub-element, Component, UoM, Measurement rules for components, Inclusions, Exclusions.
(Bulk of NRM1)
Appendices
- Commonly used functional units
- Condensed and expanded elemental cost plan templates
What is NRM3?
New Rules of Measurement 3 - Order of cost estimating and cost planning for building maintenance works
Provides guidance on:
- quantifying maintenance works for preparing order of cost estimates and cost plans,
- as well as for cost reporting of renewal and maintenance works.
What is the structure of NRM3?
- General introduction
- Contextualises cost estimating in terms of RIBA Plan of work and OGC Gateway process
- Purpose
- Use - Measurement rules for building maintenance works
- Sets out the basis for NRM3, including explaining the process of cost estimating and cost planning, and how the measurement rules are to be applied. - Measurement rules for order of cost estimating
- OoCEs: purpose, contituents.
- Floor area, functional unit and elemental methods
- Measurement rules for maintenance contractor’s OH&P, consultants’ and specialists’ fees etc - Cost planning of R and M works
- Cost Plans: purpose, constituents.
- Measurement rules for maintenance contractor’s OH&P, consultants’ and specialists’ fees etc - Calculation of annualised costs for R and M works
- Describes the measurement rules for the annual cost of maintenance works and explains the calulation methods used - Elemental cost planning (bulk of NRM3)
- Measurement rules for elemental cost planning of maintenance works
- Group elements 0-14 (Facilitating works, sub, super, internal finishes etc.)- Elements
- Sub-element, component, UoM, Included (aligns with NRM1), Maintenance descriptor (R/M), Measurement rules for maintenance works.
- Elements
Appendices
- Commonly used functional units to condensed and expanded reporting templates for elemental cost plans for R and M works;
Why is it important to measure the works according to industry standards and best practice?
- Provides consistency, parties pricing on the same basis reduces risk of dispute and makes tenders easier to compare
- Provides greater accuracy of pricing
Is it mandatory for Chartered Surveyors to follow the procedures set out in NRM?
No. However, if an allegation of professional negligence is made against a surveyor, the court will likely look at relevant RICS guidance notes to decide whether the surveyor had acted with reasonable competence.
What types of estimate are there?
- ORDER OF COST ESTIMATE
- Floor area method
- Functional unit method
- Elemental method (–> elemental cost model)
- COST PLAN
(NRM1, p21)
What is an order of cost estimate?
According to NRM1:
- Estimate used during RIBA stages 0 and 1 –> based on limited information (client’s strategic definition or initial brief) –> high dependence on assumptions
- Provides indicative cost of proposed project - establishes affordability for client.
- Can use floor area, functional unit or elemental method in NRM1.
What typical information would you include in an OoCE?
- Project title and description
- Executive summary (incl. cost limit and indicative project cost)
- Estimate base date
- Key basis, assumptions, inclusions & exclusions (–> client aware of risks/assumptions)
- Area schedule
- Summary of option costs
What are the RIBA Stages of Work?
RIBA Plan of Work 2020 says:
Stage 0: Strategic Definition
- Determined whether a building is the best way to achieve client’s requirements. If so, proceed to stage 1.
Stage 1: Preparation and Briefing
- Project brief approved by client and confirmed it can be accommodated on-site.
Stage 2: Concept Design
- Architectural concept approved by client and aligned to project brief.
Stage 3 - Spatial Coordination
- Architectural and engineering information spatially coordinated.
Stage 4: Technical Design
- All design information required to manufacture and construct project complete.
Stage 5: Manufacturing and Construction
- Manufacturing, construction and commissioning completed.
Stage 6: Handover
- Building handed over, aftercare initiated and building contract concluded.
Stage 7: Use
- Building used, operated and maintained efficiently.
What type of estimate is produced at each stage?
NRM1 p19 says:
Stage 0 - Strategic Definition –> Order of Cost Estimate
Stage 1 - Preparation and Briefing –> Elemental Cost Model
Stage 2 - Concept Design –> Cost Plan 1
Stage 3 - Spatial Coordination –> Cost Plan 2
Stage 4 - Technical Design –> Cost Plan 3
Stages 6/7 - Handover/Use –> Cost Plan 4 (renew/maintain - NRM3);
What is OGC?
- Office of Government Commerce.
- A UK Government office established in 2000, closed in 2011.
- The OGC gateway process examines programmes and projects at critical stages in its lifecycle to provide assurance that it can successfully progress to the next stage. Leads to more predictable costs and outcomes.
Can you explain the term ‘cost per functional unit’?
NRM1 says:
The unit rate that, when multiplied by the number of functional units, gives the total building works estimate (sub, super, internal finishes… external works.)
What are the main considerations/information required when producing an estimate?
(e.g. A client is planning to refurb a building. What cost advice would you give him?)
- Project type – refurb or new build? Cat A, Cat B, S&C?
- Scope of works - Demo required (e.g., knock down core walls)? Windows replaced? Column strengthening required?
- Is there an existing building? Available building information – surveys required? e.g. asbestos surveys, ground investigation survey
- Design information: GAs - plans, sections, elevations etc, outline specifications
- Quality
- Location
- Use
- Site constraints
- Nr of storeys
- Specialist works
- Intended start on-site
- Procurement route
(Date to be constructed by? Nr of functional units?)
You’re preparing a quick feasibility estimate based on a 120-bed hotel. What considerations should you make?
- PROJECT TYPE: Refurb? New build? –> type of fit out? S&C, Cat A or Cat B?
- QUALITY: Quality of shell and core and of fit out? –> 1* to 5* hotel?
- LOCATION
(Nr of storeys?)
(Nr of functional units?)
What is a cost plan?
NRM1 says:
- Estimate used during RIBA stage 2 onwards –> based on detailed information –> low dependence on assumptions.
- Provides a detailed anticipated project cost - shows how the costs are apportioned across the project.
- Can be in elemental form (NRM1).
What typical information would you include in a cost plan?
- Project title and description
- Executive summary (incl. cost limit, detailed anticipated project cost)
- Cost plan summary (elemental breakdown)
- Reconciliation (previous to current stage)
- Estimate base date
- Key basis, assumptions, inclusions & exclusions (–> client aware of risks/assumptions)
- Area schedule
- Summary of option costs
Appendices:
- GIA and NIA markups
- Detailed elemental cost plan breakdown
(Summary of construction costs, Market (anticipated effect of inflation), Benchmarking, Storey heights, Cash flow forecast where appropriate, VE options, Conclusions & recommendations)
What is the difference between an order of cost estimate and cost plan?
OoCE:
- Less detailed estimate in RIBA stages 0 and 1 based on limited information.
- Provides indicative project cost.
- Can use floor area or functional unit method in NRM1.
Cost Plan:
- More detailed estimate in RIBA Stage 2 onwards based on detailed information.
- Provides detailed anticipated project cost and shows how the costs are apportioned across the project.
Other than predicting the final project cost, what other benefits does the cost plan provide to the project and project team?
- QS can control costs and stop packages going over budget by making designers aware of the cost implications of their proposals.
Client:
- Confirms whether the scheme is affordable
- Provides information upon which the client can make informed commercial decisions.
- Can act as a value management tool to ensure the client gets a building which meets their needs, but also represents best value.
Do you need a programme to complete the cost plan?
Preliminaries are typically presented as a weekly rate in developed cost plans, therefore a programme or at least some high-level dates are required: design, tendering and construction periods