01. Cost Control

Question 1

Name some factors that influence the cost of buildings

Answer 1

Plan Shape
Height
Envelope Area
Internal Partitions
Ratios
Buildability
Location

Question 2

What is Cost Planning?

Answer 2

Cost planning is a key due diligence step in preparing for a construction project

Question 3

Why would you use cost planning?

Answer 3

Cost planning advises a property owner how much a proposed project will cost and when the expected expenses will occur, this is critical info to obtain project financing and whether a project is viable

Question 4

Describe a Cost Plan

Answer 4

Cost plans are generally prepared by Quantity surveyors and evolve during the life of a project, developing in detail & design.

Question 5

What is Value Engineering/Value Management?

Answer 5

Reducing the cost of building or structure without changing it’s function

Question 6

Why do delays on site cost additional money?

Answer 6

Prelims, overheads, staff costings & inflation on prices

Question 7

What are the 3 ways to obtain a cost/m² rate for a new building?

Answer 7

1. Comparable project - comparing to one already complete within your organisation.
2. A Professional colleague/organisation - There may be a fee for this
3. Published Information

Question 8

What is triangulation?

Answer 8

The process of using 2 or more methods in a study to check the results. This can be used to price a project using three different methods to get a good average for costs.

Question 9

What is a Preliminary Estimate

Answer 9

An estimate produced at the inception of a project to provide the client with an indicative cost to complete it.

Question 10

What is GIFA

Answer 10

Gross Internal Floor Area

Question 11

What are the issues using GIFA to get a cost per square meter?

Answer 11

GIFA - does not allow for variables of shape, height & quality of a building and these will have a major influence on the QS choice of rate.

Question 12

What are Accuracy & Consistancy

Answer 12

1. Accuracy implies a closeness of the estimate to the actual value.
2. Consistency is the measure of how often the accuracy can be relied on.

Question 13

What are the 2 standard prelim rates?

Answer 13

1. Employer Design 12.5%
2. Design & Build 20%

Question 14

How do find the Wall to Floor Ratio?

Answer 14

The Total Wall Area / the Total Floor Area

Question 15

How do you find the circumference of a circle?

Answer 15

2piR

Question 16

How do you find the area of a circle?

Answer 16

piR²

Question 17

What 7 tabs should be included in an Elemental Estimate?

Answer 17

1. Ancillary Info - Project & Building details
2. Elemental Summary - Sub-Totals of Sections
3. Estimate - Details on pricing
4. Key Dimensions - External Perimeter, CL, Ceiling heights, GIFA, Roof Area
5. Opening & Room Schedule - Windows, Doors & Rooms
6. Assumptions, Exclusions & RFI - Assumptions made to price & Further info required.
7. Rates - Log of rates used

Question 18

What are two common indices associated with the cost study of buildings

Answer 18

1. Construction Cost Index
2. Tender Price Index

Question 19

What are common applications for indices?

Answer 19

1. Estimating/Cost Planning
2. Forecasting
3. Price Variation Clauses or Fluctuation Clauses

Question 20

What are indices used for?

Answer 20

Either for updating historic cost data or for predicting future trends in costs & prices

Question 21

What stages of a project could VE occur?

Answer 21

1. Project Brief Development
2. During Design
3. During Construction

Question 22

What are the 3 elements of Value Management?

Answer 22

1. Value Planning - Carried out early in life of project.
2. Value Engineering - during the detailed design or construction stage.
3. Value Analysis - Carried out when building is complete.

Question 23

Why would you consider whole life costs in design proposals

Answer 23

In most buildings occupancy costs will be more than initial costs.

Question 24

Who usually issues variations to the design?

Answer 24

Architect, Engineers, client QS

Question 25

If there is a large omission from a contract what is a contractor entitled to claim for

Answer 25

Loss of Profit can be claimed

Question 26

What is the 1st place to take rates from Variations?

Answer 26

BOQ

Question 27

What is included in the whole life costs of a building?

Answer 27

1. The initial capital costs, (Land, building) 2. The operating costs (Utility bills, 3. Maintenance costs for the buildings lifespan

Question 28

What should a developer consider when deciding on costs of a building?

Answer 28

1. How long until the development becomes profitable 2. How to finance the project - i.e. investors, bank loan 3. What rates will be applicable - Water charges, council rates 4. Cost of the land - and value it will be worth after the building lifespan is over. 5. Maintenance & security costs Future Dismantling & Demolition may be required.

Question 29

What should be considered if a project does not appear viable to develop?

Answer 29

1. Could it be done at a different location 2. Reducing size of building 3. Value engineering to reduce the costs of the build 4. Reduce building costs by making it a passive build, = higher initial costs but reduction in running costs.

Question 30

What equipment costs should be thought about in building life span costs?

Answer 30

Cost of running equipment esb/gas etc. but also life span of equipment could be 5 years. In a building expected to last 20 year the equipment will have to be changed 4 times.

Question 31

What is NPV?

Answer 31

Net present value, referring to the difference between the value of cash now and the future value of the same cash amount. It is used to determine if projected financial gains for a project will outweigh the present day investment.

Question 32

What is meant by basket of items on (for example) Student Accommodation?

Answer 32

1. The cost of land purchase at todays prices 2. How much rent to charge 3. Will there be rent increases 4. How many students will need to occupy the building to turn a profit? 5. Maintenance & Upkeep

Question 33

Which is better for Cost data a) Tender Price Data or b) Final Account data?

Answer 33

Answer a) Tender Price Data because it is not subject to post contract influences such as variations etc. and is easier data to collect.

Question 34

Why do builders & surveyors need ready access to cost information?

Answer 34

1. Preliminary Estimates. 2. Estimating/Cost Planning during design. 3. Contract Estimating 4. Costing Variations 5. Settling contractors claims