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RICS APC > DESIGN ECONOMICS & COST PLANNING > Flashcards

DESIGN ECONOMICS & COST PLANNING Flashcards

1
Q

What is the difference between an order of cost estimate and a cost plan?

A
  • A cost estimate is prepared earlier on in the design process typically between RIBA Work Stages 0 to Stage 2.
  • Estimates prepared with more limited design information i.e. £/m2 or £/functional unit.
  • Cost plans are prepared from RIBA Stage 2 onwards. As design progresses estimated costs are broken elementally into each of its component’s parts.
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2
Q

What is the difference between cost and price?

A
  • The cost is the total cost of labour, plant, materials and management deployed for a specific activity.
  • The price is the amount a purchaser or client will pay for an item or product and is made up of the cost plus the main contractor’s profit margin.
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3
Q

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

A
  • I would analyse the costs to assess the source of the increase and identify whether any element of work is abnormally high against the order of cost estimate.
  • Once identified, I would then propose VE options to my client and design team to bring the forecast back in line with the project budget.
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4
Q

What is buildability?

A
  • The ease and efficiency with which a design can be constructed.
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5
Q

What are the advantages of buildability?

A
  • Buildability can result in better programming, sequencing and construction methods.
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6
Q

What is a wall to floor ratio?

A
  • The relationship between the wall area and floor area.
  • Used to show the cost efficiency of the building.
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7
Q

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

A
  • I would ask an M&E specialist 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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8
Q

What is a Section 106 agreement?

A

Agreements between local authorities and developers that are negotiated in the context of granting planning consent.

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9
Q

What is construction to ‘shell and core’?

A
  • The basic structure, services and envelope of the building.
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10
Q

What is a CAT A fit out?

A

Provides generic fit-out items to suit most developers for example life safety elements and basic fittings such as suspended ceiling tiles, raised floors, carpets, lighting and power distribution

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11
Q

What is a CAT B fit out?

A

Overlays the CAT A provision with bespoke elements that are specific to the needs of the building’s user.

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12
Q

What is BWIC?

A

Covers any drilling, fixing, cutting and penetrations to enable the services installation.

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13
Q

What is an order of cost estimate?

A

The determination of the possible cost of a building early in design stage.

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14
Q

What is the purpose of an order of cost estimate?

A

To establish affordability and set a cost limit.

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15
Q

What is the format of a feasibility estimate or order of cost estimate?

A
  • Usually a cost per m2, functional unit or elemental basis.
  • Other inclusions are Preliminaries, Contingency, Inflation and location factor adjustments.
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16
Q

What is a functional unit?

A

A unit of measurement that considers the prime use of the building i.e. number of beds in a hospital.

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17
Q

Where would you get your rates from for a preliminary estimate?

A

Previous similar projects and historical cost data such as previous tender submissions or a contract sum analysis.

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18
Q

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

A
  • Building Location.
  • The type of building.
  • Floor area or number of functional units.
  • Specification
  • Programme
  • Client budget
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19
Q

What is a cost plan?

A

A more detailed estimated of cost in an elemental format

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20
Q

What is the purpose of a cost plan?

A
  • To control the development of the design.
  • To identify how the cost is allocated to the different elements of the building.
21
Q

When would you complete a cost plan?

A
  • A formal cost plan is typically issued following the concept design at RIBA Stage 2.
  • Cost plan is updated as and when design information becomes available, usually at RIBA 3 and 4.
22
Q

What are the principal components of a cost plan?

A
  • Construction costs.
  • Preliminaries.
  • Contractor’s OH&P.
  • Contingency.
  • Inflation.
  • Assumptions.
  • Exclusions.
  • Area Schedule.
  • List of Drawings & Specifications adopted.
23
Q

Name the main elements of an elemental estimate?

A
  • Substructure.
    o Excavation.
    o Disposal.
    o Foundations.
  • Superstructure.
    o Frame.
    o Upper floors.
    o External walls.
    o Roof.
    o Internal finishes.
    o Services.
    o External works.
24
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 106 Agreement.
  • Removal of asbestos.
25
Q

Why is VAT excluded from a cost estimate?

A
  • Because different clients will incur different levels of VAT, for example charities may not be subject to VAT.
  • We would not be in a position to know the correct rate unless informed of it.
26
Q

What is contingency?

A

A sum to cover unknown expenses or risks that occur during the project.

27
Q

How is contingency assessed?

A
  • The amount included should reflect the risks and unknown specific items associated with the project.
  • During the early design stages a contingency allowance can be included as an overall percentage of the cost estimate at around 5%-10%.
28
Q

What are the stages of the RIBA Plan of Work?

A

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

29
Q

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

A
  • Trough the use of Tender Price Indices and include adjustments for Construction Inflation and Tender Price Inflation.
30
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.
31
Q

What time period would Tender Price Inflation be included for?

A
  • I would allow for Tender Price inflation from the estimate base date to the anticipated tender return date.
32
Q

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

A
  • The date on which rates and prices contained within a cost estimate are based.
33
Q

What does TPI stand for?

A
  • Tender Price Indices.
34
Q

What do TPIs show?

A
  • They reflect changes in the level of tender prices over a period of time.
35
Q

Where can you obtain Tender Price Index information from?

A

Building Cost Information Service but also produce our own in-house

36
Q

Why do you need to take account of location?

A

Construction costs vary from region to region.

37
Q

What is the BCIS?

A

Provides construction cost and price information through publications, online services and price books.

38
Q

Where do you get cost information from?

A
  • Previous Tender Submissions.
  • Previous Contract Sum Analysis.
  • BCIS.
  • SPONS and other price books such as Laxtons.
  • Specialist sub-contractors and suppliers.
39
Q

What do you understand by the term VE?

A

Value Engineering the organised approach aimed at providing the necessary functions of the building taking into account the clients objectives at the lowest cost, without detrimental affects to quality, reliability, performance or delivery.

40
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 for the client, first time.

41
Q

What is the difference between VE and VM?

A

Value Engineering forms one of the processes under Value Management and is a
reactive procedure to bring the anticipated cost of the development back in line with the project budget when a potential overspend is identified.

42
Q

What is value, what does value mean?

A

Value is a measure of worth.

43
Q

What happens during the VE process?

A

The design team will typically be brought together to discuss various proposals.

44
Q

What are life cycle costs?

A

Costs that will be incurred over a defined period of operating and maintaining a building

45
Q

What are the advantages of life cycle costing?

A
  • Life cycle costing allows consideration of the long-term implications of a decision.
  • It enables informed decisions to be made on material selection.
  • Life cycle costing can result in lower operational, maintenance and replacement costs.
46
Q

What are the disadvantages of life cycle costing??

A
  • Future costs are optional and the costs of maintenance can always be deferred.
  • Components are not always replaced due to end of life which is impossible to assess at design stage.
47
Q

What costs should be considered in life cycle costing?

A
  • Capital costs.
  • Operational costs.
  • Maintenance costs.
  • Replacement costs.
  • Disposal costs.
48
Q

Where can you get information about maintenance costs?

A
  • Building Maintenance Cost Information Service (BMCIS) – part of BCIS.
49
Q

Why might a client accept higher capital costs?

A
  • When considering that the replacement or repair may be inconvenient even if the solution is cheaper.

RICS APC (14 decks)

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