Quantification and Costing

Question 1

What is NRM?

Answer 1

NRM1 - Cost estimates / cost planning
NRM 2 - Bill of quants
NRM 3 - Building Maintenance works

Consistency in measuring
Best practice

Question 2

What adjustments would you make to rates?

Answer 2

Adjusting Rates for Inflation:

1. Identify the Base Year Rate:
   Start with the original rate from a specific base year.
2. Obtain the Inflation Index:
   Use a reliable inflation index, such as the Consumer Price Index (CPI) or an industry-specific construction cost index, to determine the inflation rate for the period.
3. Calculate the Adjustment Factor:
   Adjustment factor = (Index for current year / Index for base year).
4. Apply the Inflation Factor:
   Adjusted rate = Base rate × Adjustment factor.
5. Account for Project-Specific Factors:
   Consider any additional inflation impacts specific to the project, such as changes in material prices or labor costs due to market conditions.

Adjusting Rates for Location Factor:

1. Determine the Base Location Rate:
   Identify the rate applicable to the base location (e.g., national average or a specific region).
2. Identify the Location Factor:
   Use published regional cost indices or location adjustment factors specific to the construction industry (e.g., BCIS location factor in the UK).
3. Calculate the Adjustment Factor:
   Adjustment factor = Location factor for target location / Location factor for base location.
4. Apply the Location Factor:
   Adjusted rate = Base rate × Adjustment factor.
5. Consider Local Market Conditions:
   Account for specific regional factors, such as local labor availability, material transport costs, or regulatory impacts, that may further influence costs.

Question 3

What is a Bill of Quantities (BoQ), and how is it used?

Answer 3

A Bill of Quantities (BoQ) is a detailed document listing all the measured quantities of work required for a construction project. It is used to estimate costs, compare tenders, and guide contractors during execution.

Question 4

Why is accurate measurement important in construction costing?

Answer 4

Accurate measurement ensures that costs are based on precise quantities, reducing the risk of overestimating or underestimating resources and avoiding financial discrepancies.

Question 5

What are preliminaries in construction costing?

Answer 5

Preliminaries are costs associated with site setup, temporary works, and project management that are not tied to specific construction activities, such as site security or scaffolding.

Question 6

What is the role of cost plans in construction projects?

Answer 6

Cost plans provide a financial framework that guides decision-making and helps control project spending by setting budgets for different work elements

Question 7

What is the role of unit rates in construction cost estimation?

Answer 7

Unit rates represent the cost per unit of work (e.g., per square meter or per cubic meter). They are used to calculate total costs by multiplying them with the measured quantities

Question 8

What is value engineering in the context of construction costing?

Answer 8

Value engineering is a systematic approach to improving project value by optimizing costs and ensuring that resources are used efficiently without compromising quality or functionality.

Question 9

How do you assess a variation?

Answer 9

Ask for detailed breakdown/quotation

Verify the quants / review the rates against the CSA or market testing / bench mark data to see if it is fair and reasonable

Example client wanted to remove carpet from one of the rooms and replace with Amtico
This invovled omitted the rate of the carpet from the CSA and then adding the cost for Amtico

Question 10

Defined and Undefined Provisional Sum

Answer 10

Defined Provisional Sums: Provide detailed descriptions for known potential work. - Contractor will allow for prelims & programme

Undefined Provisional Sums: Use for completely unknown works.

Examples

Undefined Provisional Sum
Description in Contract:
“Allowance of £100,000 for external works, including hard landscaping and paving. Detailed scope and specifications to be confirmed at a later stage.”

Defined Provisional Sum
Description in Contract:
“Allowance of £100,000 for external works, including:
Paving of a 500 m² courtyard with 50 mm granite slabs.
Installation of 10 benches and 5 planters as per the provided outline drawings.
Works to be completed within two weeks after the main building works.”

Question 11

How can you avoid provisional sums?

Answer 11

Objective: Achieve as much design and scope clarity as possible before issuing the tender.
Approach:
Engage design consultants early to ensure detailed drawings, specifications, and schedules are completed.
Include detailed bills of quantities (BOQ) or schedules in the tender documents.

Objective: Leverage the contractor’s expertise during the design stage.
Approach:
Use collaborative procurement methods (e.g., Design and Build, Management Contracting, or Partnering).
Contractors can help identify potential scope gaps and provide input on buildability, materials, and methods.

Conduct Detailed Site Investigations
Objective: Reduce unforeseen site conditions that might necessitate provisional sums.
Approach:
Perform thorough surveys (e.g., geotechnical, structural, environmental) before tendering.
Provide contractors with all relevant data to accurately price the works.