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APC Final Revision > Design Economics & Cost Planning > Flashcards

Design Economics & Cost Planning Flashcards

1
Q

Inflation

A
  • TPI - Cost Plan Date - Tender return date.
  • CPI - Tender return date - Construction mid-point date
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2
Q

Cost Plan NRM1

A
  • Facilitating works,
  • Building Works,
  • Preliminaries,
  • OH&P –
    WORKS COST ESTIMATE –
  • Project Design Team Fee,
  • Other Project Costs –
    BASE COST ESTIMATE –
  • Design Development Risk,
  • Construction Risk,
  • Employer Change risk,
  • Employer other risk –
    COST LIMIT EXC. INFLATION
  • Tender Inflation,
  • Construction Inflation
    COST LIMIT INC INFLATION
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3
Q

Calculating unit rates from first principles

A
  • Tiling 10m2 =
  • Labour; 16 hours @ £15ph=£240
  • Materials; Tiles, grout, adhesive = £300
  • Total £540
    • 5% OHP= £567
  • 10m2 = £57/m2
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4
Q

Building Works:

A
  • 0 Facilitating works - Demolition, ground improvement, asbestos removal
  • 1 Substructure – Foundations, Ground Floor Slab, Piling
  • 2 Superstructure – Frame, Roof, Upper Floors, External & Internal Walls, External & Internal Doors,
  • 3 Finishes – Wall, Floor, Ceiling
  • 4 Fittings, Furnishings and Equipment (FFE) – Kitchens, Bathrooms, Furniture
  • 5 Services – Heating, Electrics, Ventilation, Lighting, Waste
  • 6 Prefabricated Buildings– Guard House, bath pods (student resi/budget hotel)
  • 7 Work to Existing Buildings – Support to adjacent buildings
  • 8 External Works – Roads, Paving, Planting, External Services (Utilities), Drainage
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5
Q

Preliminaries

A
  • Items that cannot be attributed to a specific element (building works NRM 1).
  • E.g. Staff,
  • welfare,
  • temp. services,
  • security,
  • safety,
  • site records,
  • completion requirements,
  • cleaning,
  • insurance.
  • 12% Prelims on Meole Brace
  • Increase if challenging city centre site
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6
Q

OH&P

A
  • Head office admin and MC’s return on capital investment.
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7
Q

Design Development Risk

A
  • Risks associate with Design Development;
  • planning change,
  • legal agreements,
  • stat reqs,
  • tender delays
  • e.g. design novelty (untested),
  • inadequate/unclear info (site investigation),
  • use of provisional sums
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8
Q

Typical Cost Plan Exclusion

A
  • VAT,
  • Land acquisition,
  • Land remediation tax relief,
  • insurances,
  • finance costs
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9
Q

NRMs

A
  • 1; Order of cost estimating and Cost Planning
  • 2; Detailed measurement for building works
  • 3; Building maintenance works
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10
Q

RIBA stages

A
  • 0 Strategic - Identify Client requirements, feasibility (budget and risks) Cost Model (£/m2)
  • 1 Preparation - Project brief & outcomes, quality aspirations, further feasibility, site info and surveys, programme, project execution plan Order of Cost Estimate
  • 2 Concept - Arch concept design, outline specification Formal Cost Plan 1
  • 3 Spatial - Developed design and costing Formal Cost Plan 2 x detailed foundation, M&E layouts, finishes schedule
  • 4 Technical - Developed arc, eng, civil design, building systems PTE
  • 5 Construction
  • 6 Handover
  • 7 In Use
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11
Q

Cost Plan Delivery

A
  • Standard format NRM 1
  • Assumptions, Exclusions, Basis
  • comp checked,
  • peer review,
  • emailed pdf copy,
  • phone call - discuss anything
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12
Q

Cost Planning Purpose

A
  • Feasibility (Proceed?)
  • Facilitate Design Choice (spec level)
  • Cost management (Budget limit)
  • Anticipate Tender Returns
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13
Q

Cost Plan Contents

A
  • Executive Summary,
  • Cost Reconciliation,
  • Elemental Summary
  • Elemental Breakdown,
  • Basis/Assumptions/Exclusions
  • Inflation Statement
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14
Q

Value Engineering
Value Management

A
  • VE Process that seeks to deliver the same requirements but at a lower cost.
  • VM Clearly communicates the clients requirements by identifying what is a need and
  • what is a want and aligning these with the budget.
  • Needs first wants second.
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15
Q

I am aware of how Estimating and Cost Planning should be approached under the guidance of RICS New Rules of Measurement 1 (Building Works).

A

Building Works:
1 Substructure – Foundations, Ground Floor Slab, Piling
2 Superstructure – Frame, Roof, Upper Floors, External & Internal Walls, External & Internal Doors,
3 Finishes – Wall, Floor, Ceiling
4 Fittings, Furnishings and Equipment (FFE) – Kitchens, Bathrooms, Furniture
5 Services – Heating, Electrics, Ventilation, Lighting, Waste
6 Prefabricated Buildings – Guard House, bath pods (student resi/budget hotel)
7 Work to Existing Buildings – Support to adjacent buildings
8 External Works – Roads, Paving, Planting, External Services (Utilities), Drainage

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16
Q

I appreciate design economics metrics such as Net to Gross ratios and site density calculations.

A
  • Warehouse 40% site density
  • enables service yard, parking
  • Resi Apartment 80% Net to gross
  • enables corridors for unit access
17
Q

Wall to floor area

A
  • quantity of external wall per unit of floor area
  • Key metric GIA (floor area) - lower wall area =better as External Wall expensive component
  • Can the building height be reduced?
  • Client/Designer decision ultimately as high ceiling height may be appropriate for specification of works
  • Meole Brace retail - Ceiling height not deemed to add any value so cost saving was realised
18
Q

I understand how Cost Planning aids in the financial control of projects as the design is developed.

A
  • Increase in Design Development enables more detailed costs
  • Detailed costs increase cost certainty
  • Expensive components can be reviewed by substitution
19
Q

I understand the main sources of cost data used to produce cost plans such as internal cost information, Building Cost Information Service and SPONS pricing books.

A
  • Internal cost information; Preferred as it is easiest to interrogate this information (fully understand what the project / spec / inc. / exc)
  • Building Cost Information Service; Useful for projects where internal info isn’t available. Provided inflation and location indices
  • SPONS; Useful cost models to quickly understand typical asset costs. Lots of useful rates if can’t easily find specific cost info. e.g. agreeing a variation
20
Q

I understand the importance of adjusting costs to ensure they account for time and location.
Example

A
  • Market is likely to have changed due to supply and demand which may have pushed prices up or down.
  • Adjusts costing to be more in line with what construction values are likely to be in the future.
  • BCIS provide an inflation indices.
  • Retail scheme - RIBA Stage 1 (limited info); used internal data to inform design assumptions. Adjusted rates for time and location
21
Q

Meole Brace - I produced an Order of Cost Estimate (OoCE) for the project. I ensured that I used rates that were appropriate to the project.

A
  • 5 Retail Units with First Floor space circa 2000 m2
  • Internal Cost Data; Out of town retail; Use CSA
  • Adjusted rates from time of project to current date.
  • Also adjusted for location
22
Q

When producing the OoCE I had to make several key assumptions due to their being limited design information available.

A
  • RIBA Stage 1
  • Foundations 600 x 1000 and ground floor slab 175
  • General Arrangement plans & sections
  • 20% DD allowance
  • Retail Unit only Value circa £1m inc Gym £2m
  • Prelims 12%
  • OHP 5%
23
Q

As part of completing the OoCE I ensured that I clearly outlined the
- Basis,
- Assumptions
- Exclusions

A

Basis
- Architect GA
- Structural; email from SE

Assumptions
- Prelims 12%
- OHP 5%
- DD 5%
- Inflation
- *12 month programme

Exclusions
- Finance Costs
- Planning fees
- VAT

24
Q

Meole Brace Key Design Assumptions

A
  • 800 deep pad foundation
  • 600 by 1000 internal wall foundation
  • 175 thick slab
  • 200 thick hollowcore upper floor with 100mm screed and insulation
  • Single-ply roof membrane inc. insulation on profiled metal decking
  • Pre-cast concrete stairs with mild steel metal balustrading
  • glazed curtain walling, brick façade panels, composite cladding panels
  • Aluminium framed double glazed doors
  • £80/m2 has been made for the road and car park
  • Provisional Allowance for service connections subject to direct quotes
25
Q

Meole Brace Exclusions

A
  • VAT
  • Finance costs
  • Section 106 / CIL
26
Q

I ensured that I made the necessary adjustments for Tender and Construction Inflation.

A
  • TPI - Cost Plan Date - Tender return date.
  • CPI - Site possession - Construction mid-point date
27
Q

Given the project design was in its early stages I included a Risk Allowance for Design Development.
I discussed the requirement for other Risk Allowances with the Client and obtained written confirmation that others could be excluded at this stage.

A
  • DD 20% (Stage 1); Significant design to complete
  • Employer Change - Client ok to exclude as Dev Base Build spec; looking to develop design to a point where would be unlikely to make post contract changes
  • Employer Other; Client ok to exclude - refers to funding and costs arising from site possession
  • Construction - Exclude at this point on basis that MC would be taking risk. Open, Greenfield site with good access so unlikely to encounter significant issues
28
Q

I often provide information to my Employer to aid them in providing up to date in-house cost data. Different types of construction projects can vary in nature considerably so when providing cost data I ensure that I present it in a uniform way as well as excluding several key elements.

A
  • Abnormal Costs,
  • External Works
  • Wider Development Costs
29
Q

Sheffield, Residential Tower
The project required an existing building to be demolished. Whilst I could have made an allowance for these works I decided it would be best to engage with a demolition contractor to establish an appropriate cost.

A
  • Colleague recently completed project with demolition contractor
  • Cawarden Quote - £366k
  • Market Testing - Undertaken project in Derby
30
Q

Sheffield, Residential Tower
In order to ensure the Order of Cost Estimate was accurate I updated several of the key rates such as the ground floor slab and the upper floors to ensure they were accurate.
RIBA Stage 2 Formal Cost Plan 1

A
  • Broke down the components of work and utilised recent rates from a similar project
  • Attributed rates to components
  • £120 UPPER FLOORS
  • £650 BASEMENT SLAB - 2M THICK
  • 2m thick slab
  • 125 kg/m3 reinforcement
    C40 concrete
  • Hardcore base
  • DPM
  • Concrete
  • Reinforcement
  • Power float
  • Insulation
31
Q

Shrewsbury, Retail Park
- I produced Formal Cost Plan 1 and advised the Client on the basis of the information, the key assumptions as well as the exclusions I had made.
- I also clearly confirmed the procurement approach and the impact on time, quality and cost.

A
  • D&B16
  • Time - Contractor Risk via LD’s
  • Quality - Design control passed to MC. Client able to develop design as required and confirm remaining development via ER’s
  • Cost - Premium for D&B vs Traditional but able to tender sooner
  • Risk - Cost, Time and Quality with MC (Quality dependent on Design Development and ER’s)
32
Q

Meole Brace - At a design team meeting I questioned whether the floor to ceiling height (building height albeit only two storey building) needed to be as high as it was. I advised the Client that by lowering the ceiling height, various cost savings could be realised.
*

A

*Reduction in overall building height albeit only two storeys
- No requirement to have FF-2F at 4m. Reduced to 2.8m.
- Savings on external walls.
- Reduced heating requirements (benefit to tenant only as base build spec)

33
Q

On the same scheme I undertook Value Engineering in order to offer cost savings to the Client by reviewing the developer’s specification against tenant requirements. I recommended that tarmacadam was used instead of block paving.

A
  • I identified that the area where block paving had been specified was quite large so a significant cost saving could be realised without compromising on the functionality of the walkway.
  • I did highlight that block paving tends to last longer than tarmac but the Client was happy to accept the capital cost saving

Concrete Slab Paving - £100m2
- Excavation
- Type 1 Sub base
- Paving

Tarmac - £85m2
- Excavation
- Type 1 Sub base
- Tarmac
- Compact

  • £15k saving based on 1000m2
34
Q

How have you undertaken VM

A
  • Value management is most effective if it implemented as early on in the project as possible.
  • On a retail scheme the client provided a clear development specification that outlined end user requirements.
  • By ensuring this information was provided early on and circulated between the project team greatly benefited how the design developed in line with the client’s requirements.
35
Q

Heyford
Pre-Contract the Lender was concerned whether the borrower’s budget was sufficient due to market factors putting pressure on construction costs. I undertook a benchmarking exercise ensuring the data had been adjusted for time and location. I advised that the costs were comparable to similar schemes but overall were considered low.

A
  • Assessing/evaluating market factors and trends in construction costs
  • Questions on price surging and labour shortages
  • State of the economy generally – locally and Globally Interest rates
  • State of the construction market

Recommend risk allowance included for inflation (construction) due to CM route being adopted e.g. developer holds risk for increases until packages are let so agreed budget is likely to increase over delivery of the project.

5% inflationary risk allowance in align with BCIS inflation forecast over course of project

Cost overrun guarantee?

36
Q

Shrewsbury, Retail Park
- I produced Formal Cost Plan 1 (BE CLEAR ON STAGE HERE) and advised the Client on the basis of the information, the key assumptions as well as the exclusions I had made.

A

Basis
- Architect GA & Sections
- Structural FRAME
- Ground Floor Slab Specification
- Concrete Slab Paving

Assumptions
- Prelims 12%
- OHP 5%
- DD 5%
- Inflation
- 12 month programme

Exclusions
- Finance Costs
- Planning fees
- VAT

APC Final Revision (22 decks)

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