Quantification

Question 1

What can you tell me about order of cost estimates (ROMS)?

Answer 1

”- key purpose is to establish if the proposed project is affordable and if so, to set a realistic cost limit
- it’s based on the employer’s requirements and is the initial phase of the costing process
- usually completed using $/sf areas or functional units”

Question 2

What can you tell me about design stage estimates?

Answer 2

”- prepared by the cost consultant, provides an estimate of what the actual project cost is likely to be
- it identifies the client’s agreed cost limit and how the money is allocated to the different parts of the project”

Question 2

What additional information should accompany an ROM estimate?

Answer 2

”- Covering letter
- Executive summary
- Specification notes
- Assumptions
- Exclusions
- Design information upon which the estimate is based
- Risk register
- Cash flow information”

Question 3

What is a bill of quantities?

Answer 3

“A document prepared by the cost consultant that provides specific measured quantities of items of work identified by drawings.
Produced per guidance from NRM-2”

Question 3

“How does IPMS relate to the Code of Measuring Practice?

Answer 3

“· IPMS 1 = GEA
· IPMS 2 = GIA
· IPMS 3 = NIA”

Question 4

How do you compile unit rates?

Answer 4

“considers labor, materials and plant

Labor - Union/non-union. Wages (regular, overtime, double time)
Materials - I considered specifications, level of finish, transportation costs & waste allowance.
Plant - I considered operating costs (fuel, operator wages) and fixed costs (purchase cost, maintenance, tax / insurance)”

Question 5

“What do you use to inform your measurements?

Answer 5

The RICS International Property Measurement Standards (IPMS), or the Code of Measuring Practice if specified by the client.

Question 6

What is Net Internal Area (NIA)?

Answer 6

The usable area within a building measured to the internal face of the perimeter walls at each floor level. Certain spaces are excluded such as stairwells and Elevators

Question 7

What is Gross Internal Area (GIA)?

Answer 7

The area of a building measured to the internal face of the perimeter wall at each floor level

Question 8

What is Gross External Area (GEA)?

Answer 8

The area taken from the external face of the external wall. Should include all walls, columns, enclosed walkways. Balconies or verandas should be included by stated separately.

Question 9

Can you provide a brief overview of each of the NRM documents please?

Answer 9

NRM 1 :
Provides guidance on the quantification of building works and non-measurable items, such as preliminaries for the purpose of producing cost estimates and cost plans.

NRM 2 :
Is written mainly for the preparation of bills of quantities and quantified schedules of works, although the rules will be invaluable for designing and developing standard or bespoke schedules of rates.

NRM 3 :
Gives guidance on the quantification and description of maintenance works for the purpose of preparing initial order of cost estimates. The rules also aid the procurement and cost control of maintenance works.

Question 9

What is Useable Square Foot (USF)?

Answer 9

The total usable floor area of a space or building. USF is measured from the outside or outer surface of any exterior walls and windows, including the middle of any interior walls that are adjacent to other spaces, hallways or common areas

Question 10

What is Rentable Square Foot (RSF)?

Answer 10

The usable square feet plus a portion of the building’s common space. Common spaces are areas usable by all tenants in the building and include, hallways, lobbies & public restrooms.

Question 11

If you are producing estimates and cost plans, which measurement rules represent industry best practice?

Answer 11

“New Rules Of Measurement (NRM) - UK

MasterFormat - CSI codes - USA”

Question 12

Can you name the 3 documents in the NRM suite?

Answer 12

“NRM1 - Order of cost estimating and cost planning for capital building works.
NRM2 - Detailed measurement for building works.
NRM3 - Order of cost estimating and cost planning for building maintenance works.”

Question 12

How is risk dealt with under NRM?

Answer 12

NRM recommends that risk allowances are not a standard percentage, but a properly considered assessment of the risk, considering completeness of the design and other uncertainties such as the extent of site investigation undertaken.

Question 13

Why is it important to measure the works according to industry standards and best practice?

Answer 13

”- To provide consistency and greater accuracy of pricing.
- To ensure that all parties price on the same basis and therefore reduce the risk of dispute.”

Question 14

Can you tell me the 4 risk categories identified in NRM?

Answer 14

”- Employer Change Risk
- Employer Other Risk
- Design Development Risk
- Construction Risk”

Question 15

What are the types of Estimates and when are they produced

Answer 15

”- ROM / Test Fit
- Schematic Estimate / Schematic Design
- Design development Estimate / Design development
- Contract Drawing Estimate / Contract Drawings”

Question 16

How do you take account of the project location and why?

Answer 16

A location factor is usually applied to recognise differences in construction prices.

Question 16

“What is dayworks?

Answer 16

A contractor is paid for specifically instructed work on the basis of the cost of labor, materials and plant plus a mark up. It is generally used when work cannot be priced in the normal way

Question 17

How would you deal with a cost plan which is over budget?

Answer 17

• Communicate the matter to the client and project team in a clear and concise manner.
• Identify areas where potential savings can be made, possibly in terms of material specification or re-design.”

Question 18

“Why would dayworks be a last resort?

Answer 18

· When working on an hourly or daily rate, there is no incentive to finish works quickly, so it can sometimes be a costly method to value the works on

Question 19

What is a lump sum contract?

Answer 19

Fixed price or lump sum pricing, as the name indicates, provides for payment of a set amount

Question 20

What are the key advantages of lump sum contracts?

Answer 20

”- The contractor takes on the pricing risk but stands to benefit from increased profit if actual costs turn out to be below the estimated costs.
- Cost certainly for the employer.”

Question 21

What are the key disadvantages of lump sum contracts?

Answer 21

”- A lump sum agreement presents a higher risks to a contractor, if the contractor underestimates their cost, the profit margin decreases and may disappear altogether.
- As a result of the additional risks faced by the contractor, they may increase their RFP Proposal.”

Question 22

What is a cost-plus contract?

Answer 22

Cost-plus contracts, otherwise known as cost reimbursable contracts, involves the employer paying the contractor for the costs incurred during the project, plus a pre-agreed percentage for profit.

Question 23

What are the key advantages of cost-plus contracts?

Answer 23

• Contractors profit is tied to expense which can increase motivation to start the project
• Flexibility - Cost-plus contracts allow employers to make design changes along the way, contractors know they’ll be paid for the extra time or materials which those changes incur.

Question 24

What are the key disadvantages of cost-plus contracts?

Answer 24

”- The final contract price is uncertain until the end of the project.
- Contractor may deliberately incur higher costs to increase profit (no incentive for efficiency).”

Question 25

When might a cost-plus strategy be appropriate to use?

Answer 25

”- A cost-plus strategy might be used where are the nature or scope of work to be carried out cannot be properly defined at the outset.
- This pricing strategy would suit emergency work such as infrastructure repairs or immediate reconstruction following a fire.”