Lesson 13 - Budget Analysis and Cost Estimating

Question 1

Note: Construction funds may have to be apportioned over a period of years, and should therefore allow for inflation.

Answer 1

Note: Site conditions are among the most common sources of program or budget adjustments.

Question 2

What is in the project development budget?

Answer 2

• Construct the building
• site costs
• furnishings
• professional services
• fees for permits.
• inspections
• and financing.

Question 3

What is the differencce between a project budget and construction esitmates?

Answer 3

Project Budgets - develop cost parameters within the owner and architect will work.

Construction Estimates - This generaly requires adjustments during the course of development.

PROJECT BUDGETS establishes development cost limits. (for all anticipated work)

Question 4

Name one example of a data source for an architect to use to estimate the cost of construction.

Answer 4

The Dodge Building Cost Calculator and Valuation Guide., published by McGraw-Hill.

Question 5

What are contingencies?

Answer 5

Unforseen developments prior to and during construction.

-5-10% should be added into the bid for contingencies.

Question 6

Name the type of cost estimating at each phase of design.

Answer 6

Programming Phase - Cost per sq ft.

Schematic Design Phase - Employ cost information on the major elements of each building subsystem.

Design Development - detailed component costs are required.

Construction Contract Documents Phase - Necessary to use composite unit rates for construction components, assemblies and systems

Question 7

Name the seven major cost areas.

Answer 7

100 Fondations

200 Building shells

300 Interiors - Includes all architectural finishes and materials, partitions, buit ins etc…

400 Conveying Systems - escalators, elevators

500 Mechanical and Electrical Systems

600 General Conditions and Profits.

900 - Site Development

(categories 700 and 800 are note assigned and reserved for special items).

Question 8

How much are general overhead costs for a project?

Answer 8

8-15%

Question 9

How much is prject over head costs?

Answer 9

5-20% of total construction cost.

10-40% of labor costs

Question 10

How much of a profit is the GC allowed to put into the bid?

Answer 10

5-25%

Question 11

What is the ENR Construction Cost Index?

Answer 11

This is the Engineering News Record Published by McGraw -Hill.

Created in 1921 to diagnose price changes that occured during and immediatley following World War I.

-Indicates the basic underlying trends of construction costs throughout the country.

Question 12

In Building Project Financing what is “pro-forma”?

Answer 12

The financial analysis of a building project which involves cost and return on investments.

Question 13

Name two types of Municipal Bonds

(Public Buildings)

Answer 13

1. General Obigations Bond
   - Schools, Roads and Parks. Projects that do not aniticipate a revenue.
2. Revenue Bonds - Fincance revenue producing buildings. (toll bridges).

Question 14

Where are general obigation bonds and reveue bonds typically sold?

Answer 14

Sold on the open market through brokers.

Municipalities are rated based on their ability to pay back the bonds.

A being the highest rating.

Question 15

NOTE:

The federala government’s GENERAL SERVICES ADMINISTRATION is perhaps the largest building authority in the world.