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WS - APC Technical Competencies > Design Economics & Cost Planning > Flashcards

Design Economics & Cost Planning Flashcards

1
Q

What is an order of cost estimate?

A
  • Order of cost estimate is prepared early in the design stage between RIBA Stage 0-2
  • This is where design information is limited and allows an estimate to be prepared on a cost per m2 or functional unit basis
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2
Q

What is a cost plan?

A
  • A cost plan is typically produced from RIBA Work stage 2 onwards.
  • As the design progresses more information is available to breakdown an initial cost estimate elementally into each component
  • For example the sub-structure, superstructure, services and professional fees into an elemental cost plan format
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3
Q

What is the difference between cost and price?

A
  • Cost is total for labour, plant, materials and management deployed for a specific activity
  • Price is the amount a purchaser or client will pay for a item or product and is made of the cost plus the main contractors profit margin
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4
Q

How do you proceed if the cost plan exceeds the project budget?

A
  • I would first analyse the costs to identify any elements of work that are abnormally high against the order of cost estimate
  • Once the source of the overspend is identified I would then look to propose value engineering options to the client and design team to bring the forecast back in line with the project budget
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5
Q

What is buildability?

A
  • Buildability is harnessing the contractors knowledge and experience during the design stage
  • This is used to generate ideas for effective and efficient methods of construction
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6
Q

What are the advantages of buildability?

A
  • Buildability can lead to more efficient programming of construction works
  • Reduced capital and life cycle costs of the building can be obtained
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7
Q

What is the wall to floor ratio?

A
  • This ratio is used to show the cost efficiency of a building by looking at the relationship between the wall area and floor area
  • The lower the ratio the cheaper the building is to construct as there is less external envelope in comparison to the floor area
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8
Q

what is the most efficient shape?

A
  • In theory a building with a circular floor plate would be most efficient as there is less wall to floor area
  • However a circular floor plate has a poor lettable area and is often difficult to fitout therefore a square floor plate is considered to be the most efficient shape
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9
Q

How would you prepare an estimate for M&E works?

A
  • I would ask a M&E surveyor to undertake the estimate
  • For feasibility estimates the M&E amount would be included in the m2 or functional unit rate
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10
Q

what is the section 106 agreement?

A
  • This is the agreements between local authorities and developers that are negotiated in the context of granting planning consent
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11
Q

What is construction to shell and core?

A
  • Basic structure, services and envelope of a building
  • This normally includes the fitout of landlord areas for example the reception, toilets, lifts and stair cores
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12
Q

What is a CAT A fitout?

A
  • A Cat A fit out will provide a basic level of finish above what is provided in a Shell and Core
  • For example suspended ceiling tiles, raised floors, and basic mechanical electrical services
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13
Q

What is a CAT B fitout?

A
  • A CAT B fitout overlays the CAT A provision with bespoke elements that are specific to the needs of the tenant to enable them to occupy the space
  • For example this would include interior partitions, data cabling, artwork and branding
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14
Q

Where could you find the definitions for these three types of Fitouts?

A
  • Definitions can be found within the BCO fitout guide
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15
Q

What is BWIC?

A
  • BWIC stands for builders work in connection and is usually set as a percentage of the services cost
  • This accounts for the main contractor to perform any drilling, fixing, or penetrations to enable services installation
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16
Q

What is the purpose of an order of cost estimate?

A
  • An OCO is used to establish if the proposed building project is affordable, and if so establish a realistic cost limit for the client
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17
Q

What is a functional unit?

A
  • Is a unit of measurement that considers the prime use of the building
  • For example in a retail estimate the functional unit would be the net lettable space.
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18
Q

Where would you get the rates for a preliminary estimate?

A
  • Previous similar project and historical cost data such as tender submissions or a contract sum analysis
  • Other sources would include pricing books such as Spon’s or the BCIS.
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19
Q

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

A
  1. Building location
  2. Floor area or functional unit
  3. Client’s high level requirements
  4. Budget constraints
  5. Site conditions
  6. Programme
  7. Procurement and contract strategy
20
Q

What is the purpose of a cost plan?

A
  • Used by a cost consultant to control the development of design
  • It identifies the clients agreed cost limit and how the money is allocated between each element of the building.
21
Q

What are the principal components of a cost plan?

A
  • Construction costs
  • Preliminaries
  • Contractor OH&P
  • Contingency
  • Inflation
  • Assumptions and exclusions
22
Q

What is usually excluded from a cost estimate?

A
  • VAT
  • FF&E
  • Inflation
  • Asbestos
  • Section 106 agreement
23
Q

Why is VAT excluded?

A
  • VAT is excluded because each client will occur different levels
  • I would not be in a position to know the correct rate unless informed of it
24
Q

What is contingency?

A
  • Contingency is a sum included within the estimate to cover unknown expenses or unmitigated risks during a project
25
Q

How is contingency assessed?

A
  • During the early design stages a contingency allowance can be included as an overall percentage of the cost estimate around 10%
  • As the design develops a risk register can be compiled with probability and cost impact assigned to each item which can then form the total project contingency.
26
Q

How do you take account of inflation when preparing a cost estimate?

A
  • I take into account inflation through use of the tender price indices and include adjustments for construction inflation and tender price inflation
27
Q

What time period would Construction Inflation be included for?

A
  • I would allow for construction inflation from the anticipated start of the project to the mid-way point of the project.
28
Q

What time period would Tender Price Inflation be included for?

A
  • I would allow for tender price inflation from the base date to the anticipated tender return date
29
Q

What is meant by the base date within a cost estimate?

A
  • The base date is the starting point that helps measure time-related aspects of the project.
  • It’s a reference date agreed upon by the parties involved.
30
Q

What does TPI stand for?

A
  • Tender Price Indices
31
Q

What do TPIs show?

A
  • They reflect the changes in the level of tender prices over a period of time, by taking into account the level of inflation
32
Q

Where can you obtain Tender Price Index information from?

A
  • This information can be obtained from the BCIS
33
Q

What is the BCIS?

A

Building Cost Information Service
- The BCIS provides construction cost and price information through online services and pricing books

34
Q

What do you understand by the term VE?

A
  • Value engineering is an organised approach to reduce cost on a project without detrimental affects to quality or performance
35
Q

What do you understand by the term VM?

A
  • Value Management is the proactive process of defining what value means to a client
  • And putting procedures in place to ensure that maximum value is delivered
36
Q

What are life cycle costs?

A
  • Are costs that will be incurred over a defined period of operating and maintaining a building or an asset.
37
Q

What are the advantages of life cycle costing?

A
  • enables informed decisions over material selection
  • Can result in lower operational, maintenance and replacement costs
38
Q

What costs should be considered in life cycle costing?

A
  • Capital costs
  • Operational costs
  • Maintenance costs
  • Replacement costs
  • Disposal costs
39
Q

How does the payback period method work?

A
  • The length of time required for an investment to recover its initial outlay in terms of profits or savings
  • The best option would be the one that has repaid the investment in the shortest time
40
Q

What sort of materials is the payback period method used for?

A
  • Often used to evaluate the options for incorporating sustainable technologies
41
Q

What are the RIBA Stages?

A

Stage 0: Strategic Definition.
Stage 1: Preparation and Briefing.
Stage 2: Concept Design.
Stage 3: Spatial Coordination.
Stage 4: Technical Design.
Stage 5: Manufacturing and Construction.
Stage 6: Handover.
Stage 7: Use.

42
Q

What is the purpose of NRM 3?

A

NRM 3 links the cost analysis of the capital cost of a construction project with consideration of whole-life-cycle costing, and provides the tools to enable a seamless transfer of cost information from the construction team to the asset management team.

43
Q

What is SPONS?

A

Spon’s Architects’ and Builders’ Price Book.

Typical for projects that exceed £4m

44
Q

What risk allowances does NRM state need to be accounted for?

A

Design development risks
Construction risks
Employer change risks
Employer other risks

Total risk allowance = base cost estimate x % risk allowance for each of the above then added together.

45
Q

What risk allowances does NRM state need to be accounted for?

A

Design development risks
Construction risks
Employer change risks
Employer other risks

Total risk allowance = base cost estimate x % risk allowance for each of the above then added together.

WS - APC Technical Competencies (10 decks)

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