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Design Economics and Cost Planning > NRM, IPMS, and Cost Planning > Flashcards

NRM, IPMS, and Cost Planning Flashcards

1
Q

What is the full title of NRM 1?

A

NRM 1, Order of cost estimating and cost planning for capital building works

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2
Q

What is the full title of NRM 2?

A

NRM 2, Detailed measurement for building works

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3
Q

What is the full title of NRM 3?

A

NRM 3, Order of cost estimating and cost planning for building maintenance works

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4
Q

What edition is NRM 3?

A

1st edition

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5
Q

What edition is NRM 2?

A

1st edition

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6
Q

What edition is NRM 1?

A

3rd edition

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7
Q

What is the difference between NRM 1, NRM 2, and NRM 3?

A

You would use NRM 1 for estimating and cost planning during the early stages of construction projects, while the NRM 2 is used for pricing, tendering, and formal measurement during the construction phase.

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8
Q

What is the elemental method of estimating

A

Breaking down a project into key components/elements and assigning costs to each, providing a detailed cost breakdown/estimate.

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9
Q

List the group elements used to develop an order of cost estimate as per NRM 1

A

0 - Facilitating works
1 - Sub-structure
2 - Super-structure
3 - Internal finishes
4 - Fittings, furnishings and equipment
5 - Services
6 - Pre-fabricated buildings and building units
7 - Work to existing buildings
8 - External works
9 - Main contractor’s preliminaries
10 - Main contractor’s overheads and profits

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10
Q

What does IPMS stand for?

A

International Property Measurement Standards

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11
Q

What are the key differences between how NIA is calculated under NRM and IPMS?

A

IPMs includes areas that NRM doesn’t, such as lift lobbies, window reveals (internal dominant face), piers, and columns

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12
Q

Define Internal Dominant Face

A

The inside finished surface comprising more than 50% of the floor to ceiling height for each IDF wall section

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13
Q

Do clients tend to prefer NRM or IPMS?

A

Client’s tend to prefer NRM as IPMS includes for unusable areas such as lift lobbies, as far as the client’s viability studies are concerned.

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14
Q

Why does the RICS recommend the use of IPMS?

A

Because it’s standardised

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15
Q

What is the structure of a cost plan?

A

Cover, Contents, Executive Summary, Elemental Breakdown, Area Schedule, Assumptions and Exclusions, Drawing Register

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16
Q

What are some typical assumptions you might make in a cost plan?

A
  • Clarify the base date that the cost plan is based on
  • Assume the area schedule can be relied on or drawings to scale
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17
Q

What are some typical exclusion you might make in a cost plan?

A
  • VAT
  • Professional, Planning and Building Control fees
  • Archaeology and unexploded ordinance
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18
Q

Why do you exclude VAT?

A

Because the amount of VAT each client pays on each project differs.

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19
Q

What sources of cost data are there?

A

BCIS, SPONS, Benchmarking, Market Testing

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20
Q

What does TPI stand for?

A

Tender Price Index

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21
Q

When would you use TPI?

A
  • Cost Forecasting,
  • Assessing Inflation Impact
  • Historical Cost Analysis
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22
Q

What does BCI stand for?

A

Building Cost Index

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23
Q

What is the BCI?

A

A statistical measure used to track changes in construction costs over time, reflecting variations in labour, materials, and indirect costs across different regions and economic conditions.

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24
Q

How do you apply the TPI?

A

You divide the current TPI over the base or historical TPI and then multiply that by the bas or historical TPI

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25
Q

Define TPI

A

A statistical measure that specifically tracks changes in tender prices submitted by contractors for construction projects over time.

26
Q

What is the purpose of an Order of Cost Estimate?

A

To establish if a proposed project is affordable and to establish a realistic cost limit for the project.

27
Q

What information is required to produce an Order of Cost Estimate?

A
  • Site location
  • Floor area / functional area
  • Sustainability requirements
  • Enabling works requirements
  • Restraints
  • Site conditions
  • MEP requirements
28
Q

What information is required from the architect to produce an Order of Cost Estimate?

A
  • Schedule of areas
  • Floor plans / elevations
  • Advice on likely planning constraints
29
Q

What information is required from the M&E Engineer to produce an Order of Cost Estimate?

A
  • Design intent
  • Advice on adequacy of utility service connections
30
Q

What information is required from the structural engineer to produce an Order of Cost Estimate?

A
  • Advice on probable ground conditions
  • Indicative design intent
31
Q

What are the main constituents of an Order of Cost Estimate?

A
  • Facilitating works
  • Building Works
  • Main Contractor’s Preliminaries
  • Project/Design Fees
  • Other development costs
    Risk allowances (design development, construction, employer change, employer other)
  • Tender inflation estimate
  • construction inflation
32
Q

Define facilitating works

A

Specialist works that need to be completed before any building works can commence

33
Q

What are the three methods used to measure building works for an Order of Cost Estimate?

A
  • Floor Area Method
  • Functional Unit Method
  • Elemental Method
34
Q

What is the Floor Area Method? (Order of Cost Estimating)

A

GIA is multiplied by an approximate cost/m2

35
Q

What is the Functional Unit Method? (Order of Cost Estimating)

A

A method whereby the cost per functional unit is multiplied by the number of functional units.

36
Q

When might you use the Functional Unit Method?

A

When calculating the cost of constructing a hospital by calculating the cost per bed, allowing for comparison between different hospital projects of varying sizes

37
Q

What is the Elemental Unit Method? (Order of Cost Estimating)

A

When the group elements are used to build the budget similar to those used in the elemental cost planning process. This is dependant on the information available, but it forms a frame of reference from which a formal cost plan can be developed.

38
Q

What elements are in the group element ‘2 Superstructure’

A

2.1 Frame
2.2 Upper Floors
2.3 Roof
2.4 Stairs and ramps
2.5 External walls
2.6 Windows and external doors
2.7 Internal walls and partitions
2.8 Internal doors

39
Q

What is included in a unit rate? (Order of Cost Estimating)

A

Materials, labour, plant, sub-contractors prelims.

40
Q

What is excluded from a unit rate? (Order of Cost Estimating)

A

Main contractors OH*P and prelims, design team fees, development costs, risk, inflation.

41
Q

How do you calculate OH&P? (Order of Cost Estimating)

A

Adding it as a percentage to total cost of facilitation works + building works + prelims

42
Q

What kind of cost advice did you provide to your client as the design progressed from RIBA Stage 1 to Stage 4?

A

On Cox Lane I provided the Client with a high level budget at stage 1, preparation & briefing, by using the schedule of accommodation and high level design to prepare a cost per m2 estimate using internal benchmarked data.

As the design progressed to RIBA stages 2 - 4 (Concept Design - Technical Design), project drawings and specifications became available and I used these to compile an elemental cost plan by taking off quantities from the drawings.

43
Q

What level of contingency did you recommend to the Client?

A

Working with the design team, we produced a risk register for the project identifying each of the project risks.

My responsibility was to advise the team on the cost allocation for each risk item.

By pricing the risk register and assigning probability and impact profiles, the contingency allowance for the scheme was calculated.

Cox Lane, Helix, Silbury House

44
Q

How would you advise the client to proceed if the cost plan exceeds the budget?

A

I would analyse the costs to identify where the costs are high in comparison to the cost estimate, and then propose value engineering to the client and design team to look to bring the costs back in line with the initial order of cost estimate.

45
Q

What is meant by the term buildability?

A

Using the contractor’s expertise and knowledge during the design phase. The contractor can advise on the methodology of construction being proposed and discuss the pro’s and con’s.

46
Q

What is a functional unit?

A

A unit of measurement used to represent the prime use of a building. E.g. nr of beds in a hospital, or NIA of retail space.

47
Q

What are the advantages of buildability

A
  • Better programming and sequencing / quick construction time
  • Lower capital costs
  • Improved quality in the finish building performance
48
Q

What items have you typically excluded when producing feasibility cost estimates?

A
  • Professional fees
  • VAT
  • Loose fixtures and fittings
  • Inflation
  • Removal of asbestos
49
Q

Why is VAT excluded?

A

Different client will incur different levels of VAT and sometimes it may not be applicable.

50
Q

How do you apply tender inflation?

A

The period from the estimate base date to the date of tender return.

51
Q

How do you apply construction inflation?

A

The period from the date of tender return to the mid-point of the construction project.

52
Q

What is design development risk?

A

An allowance for use during the design development phase for risk associated with uncertainties surrounding design development or statutory development

53
Q

What is main contractor’s design development risk?

A

When design liability is transferred to the contractor, it is recommended that an allowance for their design development risk is included in the risk allowance for design development.

54
Q

What is construction risk?

A

A risk allowance for use in the construction process for risks associated with sit conditions, ground conditions, existing services etc.

55
Q

What is employer change risk?

A

A risk allowance for use during both design and construction to provide for the risk of employer driven changes.

56
Q

What is Employer Other Risk for?

A

A risk allowance for other employer risks such as acceleration, liquidated damages, or special contract arrangements.

57
Q

What is the PTE?

A

The PTE stands for Pre Tender Estimate, and it occurs after the formal cost planning process, it’s the final cost check before tenders are invited.

58
Q

What elements can you expect in a typical cost plan?

A
  • Executive summary
  • Project description, status of cost plan
  • Drawing register
  • Area Schedule
  • Assumptions and exclusions
  • Cost plan
  • Value engineering
  • Reconciliation to demonstrate the amendments made from the previous cost plan
59
Q

What is the difference between cost, and value?

A

Cost - amount incurred in the production of good
Value - utility worth of a commodity or service

60
Q

Define Cost Control

A

The process of ensuring that costs are actively managed

61
Q

Define Value Management

A

Approach to identify opportunities to increase value. In this process the client will need to define what is valueable to them.

62
Q

Define Value Engineering

A

Structured process aimed at reducing costs without detriment to the function or quality

Design Economics and Cost Planning (3 decks)

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