DESIGN ECONOMICS & COST PLANNING Rev 2 Flashcards

1
Q

What is NRM?

A

New Rules of Measurement

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2
Q

What is NRM1 called?

A

Order of cost estimating and cost planning for capital building works

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3
Q

What is NRM2 called?

A

Detailed measurement for building works

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4
Q

What is NRM3 called?

A

Order of cost estimating and cost planning for building maintenance works

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5
Q

What RIBA stage would you start NRM cost planning?

A

RIBA Stage 2 - Concept design stage

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6
Q

What are the RIBA stages?

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

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7
Q

What is the 12 month TPI look ahead

A

4Q 2024 to 4Q 2025 - 3.65%

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8
Q

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

A
  • AR TPI Forecast suggests 2025 - 3.5% to increase to 4.35% in 2028

-Building safety act 2022 is causing problems in regards to project sign offs.

-High levels of contractor insolvencies which are making projects take longer.

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

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9
Q

How do you benchmark?

A

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

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10
Q

How is benchmarked data flawed?

A

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.

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11
Q

What would be your typical exclusions from an estimate?

A

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

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12
Q

What is whole life costing?

A

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)

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13
Q

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

A

Time, cost & quality

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14
Q

What is the differences between estimate and cost plan?

A

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

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15
Q

When do you issue a cost plan or estimate?

A

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

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16
Q

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

A

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.

17
Q

What is Whole life costing?

A

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.

18
Q

What is life cycle costing?

A

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

19
Q

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

A
  • Introduced Fire Safety
  • Higher standards and legislation
  • More expensive materials
  • More time consuming within planning stages
  • Higher insurance premiums
20
Q

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

A
  • 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.
21
Q

What are the key headings for contractor prelims in NRM 2

A

Employer Requirements & Contractor Cost Items

22
Q

Name examples of ERs cost items under NRM 2

A
  • Site Accommodation
  • Site Records
  • Completion and Post completion requirements
23
Q

Name examples of contractor prelims under NRM 2

A

-Management and staff
-site establishment
-temp services & works
-control and protection
-Plant
- cleaning
- Insurances & bonds

24
Q

Name all 4 risk categories under NRM 4

A
  • Employer Change Risk
  • Employer Other Risk
  • Design Development Risk
  • Construction Risk
25
Q

NRM Definition of cost limit?

A

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

26
Q

What should be included in the base cost estimate?

A

-Evolving estimate of known factors
- Allowances for risks, uncertainty and inflation
- Professional Fees
- Other development cost

27
Q

How are professional fees presented in the order of cost estimate?

A
  • Lump sum if known
  • % of cost estimate
28
Q

Info that should accompany an order of cost estimate?

A

-Cover Letter
- Exec Summary
-Cost Limit
- Spec Notes
- Assumptions
- Exclusions
- Drawings
-Risk Reg
- Cashflow

29
Q

All benefits of a cost plan

A
  • Projects final cost
    -Informs design decisions and implications
  • Informs Commercial decisions
30
Q

Do you need a programme for an estimate?

A

-Yes, for prelims

31
Q

What is a cost plan structure based on?

A

NRM 1 Appendix G - Elemental Template Table

32
Q

How to deal with a cost plan which is over budget?

A
  • Communicate to Client
  • Identify VE opps and savings
33
Q

Key considerations for assessing prelims

A
  • Lenght of contract
    -Type of project
  • Size of project
    -Temporary Works
    -Security needs
34
Q

Examples of abnormal contractor prelims

A

-Tower Crane
-OOH working
- Road Closures\Traffic Management

35
Q

Employer vs contractor cashflow

A
  • Contractor - construction work only
    -Employer - Broad view including fees etc
36
Q

Benefits of cashflow

A

-Allows appropriate planning of expenditure for future payments.