DESIGN ECONOMICS & COST PLANNING Rev 2

Question 1

What is NRM?

Answer 1

New Rules of Measurement

Question 2

What is NRM1 called?

Answer 2

Order of cost estimating and cost planning for capital building works

Question 3

What is NRM2 called?

Answer 3

Detailed measurement for building works

Question 4

What is NRM3 called?

Answer 4

Order of cost estimating and cost planning for building maintenance works

Question 5

What RIBA stage would you start NRM cost planning?

Answer 5

RIBA Stage 2 - Concept design stage

Question 6

What are the RIBA stages?

Answer 6

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

Question 7

What is the 12 month TPI look ahead

Answer 7

Q1 2024 to Q1 2025 - 2.4%

Question 8

What has happened in the construction industry in the past few years?

Answer 8

Past 3 years - 16% increase inflation, however prices have increased significantly

Material price fluctuations have been significant

Suppliers are concerned about the current market in regards to supply, energy prices, interest rate increases & late payment

Question 9

How do you benchmark?

Answer 9

Compare tender rates from legacy schemes and uplift the legacy scheme based on location and time factors and compare new rates.

Question 10

How is benchmarked data flawed?

Answer 10

You need the detailed information to understand the size, scope & quality of the scheme to ensure it is similar in nature. It also must be uplifted in terms of time and location.

Question 11

What would be your typical exclusions from an estimate?

Answer 11

VAT
Archaeological findings
Site acquisition costs
Road closure costs
Survey and investigations

Question 12

What is whole life costing?

Answer 12

WLC - is the improved understanding of true lifetime financial impact of investment in a building asset.

up to 80% of lifetime cost are determined at the early stages of design (concept/spatial)

Question 13

What are the main 3 elements that a client must consider at the outset of a project?

Answer 13

Time, cost & quality

Question 14

What is the differences between estimate and cost plan?

Answer 14

a. Cost Estimates
It is a high level exercise carried out at Stage 1 based on limited information
- Used for a business case
- Setting budget

b. Cost Plans
More detailed estimate carried out during RIBA stages 2,3&4. this is a plan to show how the funds will be allocated against developing deign

Question 15

When do you issue a cost plan or estimate?

Answer 15

Cost Estimate - RIBA stage 1
Cost Plan - RIBA stage 2, 3 & 4

Question 16

How do you allow for OH&P, Prelims & Contingency?

Answer 16

Within our estimates:

Prelims - 13%-15%
OH&P - 8-10%
Design contingency - 5-10%
Professional Fees - 10-15%

For housing schemes we pro-rata the construction build rate to calculate the Nr of weeks and apply a weekly run rate for prelims based on legacy schemes.

Question 17

What is Whole life costing?

Answer 17

Improved understand of true life time financial impact from site acquisition to demolition.

Up to 80% of costs can be determined by the early design stages.

Question 18

What is life cycle costing?

Answer 18

Life Cycle Costing shows all costs that an through the construction and maintenance of a building.

It includes the initial investment and any further investment such as operating cost, maintenance, repair, and upgrades

Question 19

What is the impact of the Building Safety Act 2022 had on construction projects?

Answer 19

• Introduced Fire Safety
• Higher standards and legislation
• More expensive materials
• More time consuming within planning stages
• Higher insurance premiums

Question 20

What is a typical shape of a cash flow forecast and why is it this shape?

Answer 20

• S Shape
  -The least amount of works take place at the start and end of the project.
• The majority of work packages take place in the middle.
• Less works at the start and end mean less payment compared to the middle.