Design Economics & Cost Planning

Question 1

What are the RIBA stages of work?

Answer 1

▪ Stage 0 - Strategic Definition
▪ Stage 1 - Preparation & Brief
▪ Stage 2 - Concept design
▪ Stage 3 - Spatial Coordination
▪ Stage 4 - Technical Design
▪ Stage 5 - Manufacturing Construction
▪ Stage 6 - Handover
▪ Stage 7 - In use

Question 2

Which cost plans / estimates align with these stages?

Answer 2

▪ RIBA Stage 0 (Target) - Initial or ‘rough’ Order of Cost Estimate
▪ RIBA Stage 1 (Target) - Order of Cost Estimate
▪ RIBA Stage 2 (Improve) - Formal Cost Plan 1
▪ RIBA Stage 3 (Improve & Control) - Formal Cost Plan 2
▪ RIBA Stage 4 (Improve & Control) - Formal Cost Plan 3 / Pre-Tender Estimate

Question 3

What is the difference between tender and construction inflation?

Answer 3

• Tender - allowance in cost estimate/cost plan for fluctuations in the basic prices of L/P/M during the period of the estimated base date to the tender returns
• Construction - allowance in cost estimate/cost plan for fluctuations in the basic prices of L/P/M from date of tender return to construction period mid-point

Question 4

What sections are included in a cost plan? (NRM1)

Answer 4

0. Facilitating Works
1. Substructure
2. Superstructure
3. Internal finishes
4. FF&E
5. Services
6. Works to existing buildings
7. Pre-fabricated units
8. External Works
9. Preliminaries
10. OH&P
11. Fees (Project & design)
12. Risk

Question 5

What are provisional sums?

Answer 5

They are an estimate or allowance for items without the detail, definition or design to be able to produce an accurate cost.
Or items that employer may/may not wish to carry out themselves

Defined - Contractor has made an allowance for programming and prelims

Undefined - Contractor hasn’t allowed for planning, programming or prelims and therefore may be entitled to an EoT or additional prelims.

Question 6

How would you manage a provisional sum?

Answer 6

Add/omit using the contract

Question 7

What are the sections in a pre-contract cost report?

Answer 7

▪ Executive Summary
▪ Control accounts
▪ Change register
▪ Value Engineering
▪ Risk

Question 8

What are the sections in a post-contract cost report?

Answer 8

▪ Executive Summary / overview
▪ Control accounts
▪ Provisional Sums
▪ Changes / Variations
▪ Cashflow