Development Briefs & Project Finance Flashcards
What is a Dev brief?
Development brief is to stimulate interest and help make a business case for the development of a site or a building’s refurbishment
What is a project brief?
influence and control the form and uses that a desired development will take
What is a brief?
- It is a formal statement of the objectives and functional and operational requirements of the finished project.
- It needs to contain sufficient detail to enable the construction team to execute the detailed design.
Define Difference
- A development brief sets out the overall objectives for a scheme whereas a more specific project brief defines the requirement for an individual project
If there is no brief, what steps would you put in place to prepare one?
- Work with the client to identify:
o Business objectives.
o Project requirements.
o Project objectives.
o Project values.
o Critical success factors. - What the expected outcome would be.
- What resources the client has available.
- Timescales.
- Research – benchmarking against other projects.
What would a typical brief contain?
INTRODUCTION - Purpose of the document
PROJECT BACKGROUND & BUSINESS CASE - Project background, Business case
PROJECT DESCRIPTION – Overview, Project scope, Detailed description of project, Exclusions
STATEMENT OF OBJECTIVES & PROJECT REQUIREMENTS Project objectives & requirements, KPIs
PROJECT CONSTRAINTS
PROJECT STRUCTURE - Key stakeholders, Delivery team, Project interfaces
BUDGET & COST PARAMETERS Project budget, cost parameters
DESIGN & QUALITY - Stage approvals, Quality management
PROGRAMME & PROCUREMENT - Outline project programme, Programme constraints, Procurement strategy
PROJECT RISKS - Primary project risks
How did you ensure the design/client brief was met over the course of one of your project’s lifecycle?
- Regularly updating the Breif and PEP.
- Design reviews
- Stage Reports
How do you ensure that you understand a Client’s requirements & brief?
- Meet with the project leader.
- Record all assumptions & queries & thoughts on how to develop / challenge the brief.
- Meet with the client to review your findings, confirm your understanding of their requirements
Give me what you believe to be the key reasons for why developments go wrong
Communication
Economic situation (margins squeezed & underbidding
Poor relationships
Lack of Management: Senior & Project
Ineffective engagement with stakeholders
What is Whole Life Costing?
The costs of acquiring, operating, maintaining and disposing a building over its lifespan.
How is it different from lifecycle costing?
Lifecycle Costing costs individual elements over a project’s lifespan such as repair, maintenance, cleaning or decorating; WLC is the combination of these individual elements together with capital costs to give a holistic estimate.
What are the advantages & disadvantages of WLC / LCC?
Advantages:
1. Allows consideration of the long term implications of a decision.
2. Enables informed decisions to be made on material selection.
Disadvantages:
1. Future costs are optional and the costs of maintenance can always be deferred.
2. Components are not always replaced due to end of life – style, fashion etc instead – almost impossible to assess this at design stage.
What is a Development Agreement and has one been used on your projects?
- It is a consensual, binding contract between a land owner and a developer/tenant to allow the latter to develop the land for the duration of the project contract.
- The purpose is to specify the standards and conditions that will govern development of the property.
What is an options agreement?
contract between a landowner (the seller) and a potential buyer (often a developer or investor). It gives the buyer the exclusive right to purchase the land at a pre-agreed price within a specific timeframe, but without any obligation to do so (this is the key bit)
What is the current level of corporation tax?
- Main rate: 25%
- Small companies: 19%
What techniques can be used to evaluate life cycle costs of different materials?
- Net present values.
- Payback period.
Level 2 - Microsoft - Edinburgh Relocation
Options Appraisal
- met with the client to understand their requirements
- a new, larger space
- Initial project brief = Grade A office, close to city, prog and budget
- reviewed against requirements
- lease extension due to budget constraints and detailed brief
Knottingley Regeneration
Sports Pavilion and Wellbeing Hub - £20m
- £10m Wellbeing Hub had been developed which did not meet the clients’ requirements
- Options = online workshop or in person. In person as quicker decision.
- Breakout sessions – drive collaboration. Key takeaways
- More flexible space to be delivered.
York Hub
Outline Business Case – £125m
OBC seeking investment whilst the project brief formed the expectations in delivery
scope, strategic aims, benefits, programme, cost, risks and governance
focus on the preferred option submitted to bring up to date
prepared, shared with key stakeholders
What is effective control of costs while a property/construction project is in progress?
Continuous monitoring and management of expenditure
What are the legal and contractual constraints on the cost of a project?
- The Building Act 2019,
- The relationship of the “iron triangle” of time, cost and quality - procurement route selection
What are the principles of contingencies/risk allowances?
Managing cost risk, ensuring financial control throughout the project
Level 2 - Shopping Centre Repurposing - Ilford Exchange, The Mall, 17&Central - £4m to £23m - Cashflow
- Managing the project expenditure
- Detailed invoicing cashflow to compare the approved budget, total spend to date and forecast amounts
- prepared and presented financial reports at monthly intervals
- traditional JCT contract whereas the NHS Hub project was under a JCT Design and Build contract.
- D&B - the contractor had taken greater design risk and responsibilities = client’s liability for design issues limited
- limited undefined provisional sums
L3 - Community Diagnostic Centre (CDC), The Mall, Wood Green - £23m - Final Account
Agreement for Lease (AfL) a contingency cap of £1m
Adjudication was an option - fee and time
Arbitration – time
Negotiation - agree a median for all disputed changes under £1000, legal input, agreeable sum within the budget.
L3 - York Hub – Outline Business Case – £125m - QCRA
Quantitative Cost Risk Analysis (QCRA) - cost impacts pre-mitigation and post-mitigation. Modelled to deliver a baseline level, a P50 and a P80
- Recommended the more conservative P80 - early stage of the project, risks present such as unknowns in leasing structure and the frustrations the client had from previous budget overruns
- P50 = no optimum bias.
