Design Economics & Cost Planning Flashcards
What RICS documents are you aware of to assist with cost planning?
- NRM1 (Order of cost estimating and cost planning for capital building works).
- NRM1 (Contingency guidance).
What sources of cost data are you aware of?
- Previous tender submissions.
- Previous CSAs.
- In house benchmarking.
- BCIS.
- Building cost models.
- SPONS and other price books.
- Specialist sub-contractors and suppliers.
What is BCIS?
Building Cost Information Service – provides cost and price information through publications, online services and price books.
What is Tender Price Indices?
They reflect changes in the level of tender prices over a period of time. The price adjustments take into account the level of inflation depending on current and forecast market conditions.
You mention BCIS can re-base construction costs dependant on location. How and why?
Infation needs to be accounted for to anticipate the changes in prices of labour, plant and materials. Depending on the area, these 3 items may be affected differently. This is done to ensure accuracy of the estimate for the client.
When would you typically include TPI up too?
Typically, I would recommend TPI is taken up to the start on site date to the midpoint of construction.
During what RIBA stage would you expect to issue an Order of Cost Estimate?
Order of Cost Estimate: During RIBA Stage 0 to 1.
During what RIBA stage would you expect to issue a Formal Cost Plan?
Formal Cost Plans: From RIBA Stage 2 to 4.
When would you expect a Pre-Tender Estimate to be issued?
I would expect the RIBA Stage 4 cost plan to form the basis of a PTE.
You mention design metrics, can you give me an example of some of these?
- Wall to floor ratio
a. Shows the relationship between the wall area and floor area.
b. Used to show cost efficiency of the building.
c. Lower the ratio, cheaper the building is to construct as there is less external envelope in comparison to floor area. - Net to gross
a. A metric used to assess the efficiency of a building’s design.
b. Optimal if the number is less than 1.
What would you recommend to a client a good wall to floor ratio is?
Between 0.4 and 0.5.
What would you expect the cost difference to be between wall to floor ratios?
A variation of 0.1 in the wall-to-floor ratio can change overall construction costs by 4 to 5%.
What shape is the most efficient shape?
In theory, a circular floor plate would be the most efficient design, however this offers poor lettable floor area and is difficult to fit out. Therefore, a square would be the most efficient.
What are the key components of a cost plan?
- Construction costs.
- Preliminaries.
- Contractor on costs.
- Contingency.
- Inflation.
- Assumptions.
- Exclusions.
- Area schedule.
- Basis.
What is the purpose of an order of cost estimate?
To establish if the proposed building project is affordable, and if so, to establish a realistic cost limit. The cost limit will be the maximum the client is prepared to spend.
What is the format of an order of cost estimate?
- Presented cost per m2, functional unit or elemental basis.
- Abnormals and enabling works considered.
- Prelims, contingency, inflation etc all factored in.
What would you need to complete on order of cost estimate?
- Location.
- Type of building.
- Floor area and / or nr of units.
- Storey height.
- Level of fit out etc.
- Site conditions.
What is NRM1?
Order of cost estimating and cost planning for capital building works.
What does NRM1 consider?
- RIBA Plan of Work 2020.
- ICMS.
- IPMS.
You mention you produced an order of cost estimate for the octagon amenity fit out. What information did you have available at the time?
I had a basis general arrangement layout available at the time and assumptions were made based on finishes, the level of MEP required, and use of the building.
You mention the procurement route selected is a key risk until further defined, why is this?
The procurement route presents a risk as should the project be undertaken using a JCT traditional procurement route, the design will already be completed by the employer and therefore costs will be competitive and there should be minimal change.
However, if a JCT design and build procurement route is selected, due to the ongoing nature of the construction and design overlap, there is a change for design changes which could impact the budget.
What is value engineering?
VE is an organised approach aimed at providing the necessary functions of the building taking into account the clients objectives at the lowest cost, without detrimental effects to quality, reliability, performance or delivery.
What do you understand by the term ‘Value Management’?
VM is the proactive process of defining what value means to a client and putting procedures in place to ensure that maximum value is delivered for the client, first time.
What is the difference between value engineering and value management?
Value management is proactive and aims to be done first time. Value engineering is reactive and falls under the VM scope and is utilised to bring the anticipated cost of the scheme back in line when projected to overrun.
