Design Economics & Cost Planning Level 1

Question 1

What is the RIBA Plan of Works 2020?

Answer 1

It organises the process of briefing, designing, constructing and operating building projects into eight stages:

Stage 0 - Strategic Definition

Stage 1 - Preparation & Brief

Stage 2 - Concept Design

Stage 3 - Spatial Co-ordination

Stage 4 - Technical Design

Stage 5 - Manufacturing and Construction

Stage 6 - Handover

Stage 7 - Use

Question 2

What are the rules under which order of cost estimates and elemental cost plans are produced?

Answer 2

NRM 1 - Order of Cost Estimates and Cost Planning

NRM 3 - Order of Cost Estimating and Cost Planning for Building Maintenance Works

Question 3

What is an order of cost estimate?

Answer 3

It establishes if a proposed project is affordable and if so, to set a realistic cost limit for the development project

Question 4

What RIBA Stage is an order of cost estimate typically produced?

Answer 4

RIBA Stage 1 - Preparation & Briefing

Question 5

What is a cost plan?

Answer 5

Provides an estimate of what the actual project cost is likely to be

Identifies the client’s agreed cost limit and how the money is allocated to different parts of the project

It is a development of the OCE and is based on more detailed design information

Question 6

What RIBA Stage is a cost plan typically produced?

Answer 6

RIBA Stage 2 - Concept Design

Question 7

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

Answer 7

An OCE provides a possible cost based on a brief / employer’s requirements within the initial phase of a cost planning process. It is usually completed using cost per m2 or functional units

A cost plan is a more detailed elemental breakdown and reflects how the costs are distributed across the project

Question 8

What sources of information and cost data are available when preparing an order of estimate or cost plan?

Answer 8

BCIS cost data and information
Published pricing books such as Spon’s
Historic cost data and information from previous projects
In-house cost analysis
Speaking directly with contractors, subcontractors and suppliers for cost information
Existing client information - benchmark data from previous project

Question 9

How do you adjust costs for time and locaton?

Answer 9

Time - BCIS offers cost indices for the quarter of each year, going back several years and forecasting indices for the expected risk in tender prices. ((forecast for scheme - index) / index) x 100 = % increase in rates

Location - BCIS have a series of location factors to use and adjust Location of cost analysis factor x location of proposed project = new rate

Question 10

What is the benefit of accurate cost planning?

Answer 10

confirms to the client if the scheme is affordable

places the client in an informed position to make commercial decisions

Acts as a value management tool to ensure the client gets a building which meets their needs, but also represents best value

Question 11

What is inflation?

Answer 11

NRM 1 defines inflation as an upward movement in average level of prices or costs. Often included as an allowance in OCE’s or CP’s for fluctuations in the basic prices of labour, plant, equipment and materials

Question 12

What are the 2 types of inflation as defined in NRM1?

Answer 12

Tender inflation - an allocation included in the OCE or CP for fluctuations in prices of labour, plant, materials and equipment during the period from the estimate base date to the date of tender return

Construction inflation - same as above but during the period from date of tender return to mid-point of the construction period

Question 13

What is life cycle costing (LCC)?

Answer 13

A decision making technique which considers both initial and future costs over the life of a building

It measures and manages lifetime costs and enables design options to be compared from a lifecycle perspective to understand overall costs associated with operating and owning an asset

Question 14

What is the typical analysis period for LCC?

Answer 14

It should be determined by the client

But it is typically the length of a lease or anticipated functional life of a building or time to first refurbishment

Question 15

What are the advantages of LCC?

Answer 15

long term value

green building certification credits

reliable planning and reduced risk

Question 16

What are potential disadvantages of LCC?

Answer 16

Components are not always kept until the end of a buildings life, due to changes in fashion and style for example

Costs associated with defects cannot be predicted

Question 17

What are the costing considerations for LCC?

Answer 17

Construction -
Planning
Design
Construction

Costs in use - 
Maintenance 
Refurbishment 
Operational 
Occupancy 
End of Life

Question 18

Name some key factors impacting the design economics of a building?

Answer 18

Plan shape - area may stay the same, impacts perimeter and costs associated

Grouping of buildings - cost per unit of external walls decrease

Number of storeys - perimeter length of foundations will be the same as plan shape has not changed, cost of foundations per m2 GIFA is likely to increase due to extra loading imposed, cost implication on walls / partitions/ finishes, heating and air con, structural staircase, staircases or vertical transport

Storey height - volume of building to be heated / ventilated, increase in prices associated with walls because of increased height, structural frame may be more expensive

Question 19

What is Gross Internal Area (GIA)?

Answer 19

The area of a building measured to the internal face of the perimeter walls at each floor level

Question 20

What is Net Internal Area (NIA)?

Answer 20

The usable area within a building measure to the internal face of the perimeter walls at each floor level

Question 21

What is the relevance of wall to floor ratio in design ecnonomics?

Answer 21

it is calculated by dividing the external wall area by the floor area, indicating the proportion of external wall required to enclose a given floor area

Can indicate how efficient a design is - typically the lower the ratio, the more economic the design

Question 22

Define benchmarking

Answer 22

the use of historical data from projects of a similar nature

can be used as a comparison or check for cost planning purposes

can highlight areas of design that are not value for money, or if the price you have is in line with market conditions

Question 23

What are the key stages in the benchmarking process?

Answer 23

Data collection

Data comparison

Analysis

Action

Repeat

Question 24

What factors should be considered when benchmarking?

Answer 24

construction costs and duration

costs / m2 GIA or cost per functional unit

distribution of construction cost

environmental considerations e.g. co2 emissions, energy performance certificate ratings, sustainability ratings

building efficiency (wall to floor ratio)

Timing e.g. is the comparison project costs from FA or contract sum?

Question 25

Why should projects be adjusted for location where required?

Answer 25

in terms of location, costs can differ for identical projects due to:

• availability of materials, labour and services to the site
• transportation costs and routes
• ease of access
• local labour costs
• travel distances
• existing land conditions

Question 26

What is the BCIS?

Answer 26

Building Cost Information Service by the RICS

provides cost data on historic projects

can be used to aid in preparation of order of cost estimates and cost plans

Question 27

How does NRM define the ‘cost limit’?

Answer 27

the maximum expenditure that the employer is prepared to make in relation to the completed building

Question 28

What is the cost planning process in relation to the RIBA Plan of Works 2020?

Answer 28

Stage 1 - Preparation & Brief:
Order of cost estimate based on either brief or employer’s requirements. Cost information at this stage is rate per functional unit or m2 (GIA or NIA) and can determine the cost limit

Stage 2 - Concept Design
A cost plan can be produced based on design information, providing the overall cost limit allocated to the various elements

Stage 3 - Spatial Co-ordination
As the design develops, the cost plan will be agreed to

Stage 4 - Technical Design
As design develops, elemental cost checks are carried out to confirm the cost plan. Here, the QS can carry out a pre-tender cost analysis as a final check of the cost plan and as a frame for reference when the tenders are returned

Stage 5 - Construction
QS monitors costs and variations and FA