Quantification and Costing

Question 1

Name the 3 NRM documents?

Answer 1

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 2

Name the 3 RMM documents?

Answer 2

RMM1 - Order of Cost Estimating, Cost Planning and Detailed Measurement for Rail Infrastructure Works.

RMM2 - Rail Activity Based Cost Models for Rail Infrastructure Works.

RMM3 - Order of Cost Estimating, Cost Planning and Detailed Measurement for Rail Maintenance Works.

Question 3

What’s the strucutre of NRM1?

Answer 3

1. General
2. Measurement rules for order of cost estimating
3. Measurement rules for cost planning
4. Tabulated rules of measurement for elemental cost planning

Split into 14 Group Elements

E.g. Group Element 2: Superstructure

Group Element > Element > Sub-element > Component

Question 4

What’s the structure of NRM2?

Answer 4

1. General
2. Detailed measurement of building works
3. Rules of measurement for building works

Tables of measurement split into 41 work sections.

E.g. Work Section 7: Piling

Question 5

What’s the strucutre of RMM1?

Answer 5

1. RMM Suite of Documents in Context
2. General
3. Cost Estimating and Cost Planning
4. Detailed Measurement (includes tabulated rules of measurement)

Cost Category > Group Element > Element > Sub-element > Component > Sub-component

Cost Categories:

1.0 - Direct Construction Work
2.0 - Indirect Construction Work
3.0 - Design, Project Management and Other Project Costs
4.0 - Risk
5.0 - Inflation
6.0 - Taxation and Grants

Group Element E.g. 1.03 - Electric Power and Plant.

Question 6

What’s the structure of RMM2?

Answer 6

1. RMM Suite of Documents in Context
2. General
3. Primary Rail Activity Cost Model.

Benchmarking process:

1. Data Collection
2. Data Comparison
3. Data Analysis
4. Action
5. Repeat

Question 7

What benefits do standard methods of measure offer?

Answer 7

Provides a standard set of measuring rules for construction works understood across the industry.

Consistent format allows the data to be used to benchmark similar schemes.

Provides a consistent Work Breakdown Structure.

Question 8

List the different types of cost plans and when they would be produced?

Answer 8

Order of Cost Estimate - RIBA 1

Formal Cost Plan 1 - RIBA 2

Formal Cost Plan 2 - RIBA 3

Formal Cost Plan 3 - RIBA 4

Question 9

What outliers did you discover on the M621 final estimate?

Answer 9

• Length on the piles
• Formwork quantities

Question 10

What format was the cost plans you produced for Network Rail?

Answer 10

Based on the RMM Cost Plan format.

Cost captured against all the Cost Category’s.

Direct construction cost was built up from labour, plant and materials basis.

Cost from other cost categories such as possession cost and PM cost were also included in the estimate.

Question 11

What standard method of measure did you base your NR cost plans on?

Answer 11

Rail Method of Measure 1 - Order of Cost Estimating, Cost Planning and Detailed Measurement for Rail Infrastructure Works.

Question 12

How was contingency on the cost plans calculated?

Answer 12

Risk Analysis was conducted and benchmarked against similar historical schemes.

Question 13

What is a schedule of rates?

Answer 13

List of rates for provision of labour, plant, material or completing specific types of works.

Used to price works, such as for framework contracts.

Question 14

Explain the price reduction you achieved in assuring the subcontractor’s quote on the South UPS project?

Answer 14

Price from suppllier was £59K.

Utilising SPONS Mechnical and Electrical price book and adjuting their rates for inflation and region I calculated a rate of £28.

Rate was reduced by £32 to £26.5K

Misunderstanding as to required UPS size.

Question 15

How did you go about challenging the UPS rate with the supplier?

Answer 15

• Prepared all my calculations and backup for the price range I developed.
• Arranged a meeting with the subcontractor’s QS.
• Explained my position and findings and sort to work with the subcontractor’s QS collaboratively.
• Subcontractor’s QS did some investigation and accepted my challenge and provided an updated. quote.

Question 16

What is the pounds in the ground metric?

Answer 16

This is a metric used by NR to monitor how much of project expenditure is spent on direct construction cost v other cost categories.

RVC = Direct + Design + Prelims
IP CoE = Direct

Question 17

What was your data source for the RRV rates library?

Answer 17

NR had a large number of RRV suppliers on a framework with an agreed schedule of rates.

I brought all these schedules together into a central library with clear descriptions and easy filtering options.

Question 18

What information was included in this rates library?

Answer 18

• Item Description
• Supplier
• Rate
• Unit
• Copy of supplier quote
• Rate Base Date

Question 19

Surely with an organisation such as NR, a rate library already existed?

Answer 19

NR have large libraries of Unit Rate data, but the rates library I established was more granular covering cost of supply for specific materials aiding in the production of detailed cost estimates.

Question 20

What changes did you make to the template?

Answer 20

Requirement to define requirements for RRV, and then the rate for the RRV was automatically calculated based on the RRV rates library data. This meant a lump sum figure was no longer being used.

Allowances for materials had to be based on supplier quotes, or data from historical projects with adjustments.

Greater accuracy and accountability.

Question 21

What was the inflation tool you integrated?

Answer 21

Choose project start date, completion date and desired inflation index such as RPI, CPI and BCIS construction index. This automatically provided the inflation % adjustment required.

Question 22

How did the forecasting model work?

Answer 22

Forecasting based on a S - curve that:

1/3 = 1/4
2/3 = 1/2
3/3 = 1/4

Question 23

What are the benefits of a pricing document based on the standard methods of measure being included the ITT?

Answer 23

• It saves the cost and time of several contractors measuring the same design to calculate their bids for competition.
• It provides a consistent basis for obtaining competitive bids.
• It provides an extensive and clear statement of the work to be executed.
• It provides a strong basis for budgetary control and accurate cost reporting of the contract
• When BQ items are codified, it allows reconciliation and any necessary transfers and
  adjustments to be made to the cost plan.
• It provides one of the best sources of real-time cost data, which can be used for estimating the cost of future building projects as it provides a cost model in a single document.

Question 24

What sections will you find in a BoQ?

Answer 24

• form of tender (including certificate of bona fide tender)
• summary
• preliminaries
• measured works
• non-measurable works
• provisional sums
• contractor-designed works
• risks
• credits (for materials arising from the works)
• dayworks (provisional) and
• annexes.

Question 25

What’s the structure of a cost plan?

Answer 25

1. Facilitating Works
2. Building Works
3. Main Contractor’s Prelims
4. Main Contractor’s OH&P
5. Design Team Fees:
   - Consultant fee’s
   - Main Contractor’s pre-construction fee
   - Main Contractor’s design fee
6. Other Project Cost
7. Risk Allowances:
   - Employer’s Change Risk
   - Employer’s Other Risk
   - Design Development Risk
   - Construction Risk
8. Tender Inflation
9. Construction Inflation
10. VAT

Question 26

What is the difference between tender inflation and construction inflation?

Answer 26

Tender inflation: the period from the estimate base date to the date of tender return.

Construction inflation: the period from the date of tender return to the mid-point of the construction period.