Design Economics and Cost Planning Flashcards
(22 cards)
What is inflation
- NRM 1 definition: Sustained increase in the general price level of resouces
- It is included as an allowance in order of cost estimates or cost plan for fluctuations in basic prices
What is an order of cost estimate
- Estimate based on benchmark data for similar type of project
- Purpose to establish affordability
- Takes place prior to preperation of full set of drawings or BoQ
RIBA Workstages
Stage 0: Strategic Definition
Stage 1: Preparation and Briefing
Stage 2: Concept Design
Stage 3: Spacial Coordination
Stage 4: Technical Design
Stage 5: Construction
Stage 6: Handover and Completion
Stage 7: Use
Difference between Order of Cost Estimate and a Cost Plan
Order of Cost Estimate
- Early high-level estimate
- Provide guidance to client in relation to their planned scheme
- Compare to available budget
- Typically prepared at RIBA stages 0 - 1
Cost Plan
- Detailed elemental cost estimate
- Takes quants from drawings to provide accurate cost estimate
- Typically prepared RIBA stages 2 - 4
- Should be used to support design team in designing to available budget
Can you explain term ‘Cost per functional unit’
Unit rate when multiplied by number of functional units gives building works estimate (excl prelims and OH&P)
Can you name the documents in the NRM suite
NRM 1 - Order of cost estimating and cost planning for capital building works
NRM 2 - Detailed measurement for building works
NRM 3 - Order of cost estimating and cost planning for building maintenance works
Do you need a programme to complete the cost plan
Prelims typically presented as weekly rate, therefore programme of high level dates will be required
What are some reasons we have cost overrun on a project
- Ambiguous client brief
- Unrealistic cost estimates
- Project risk realised and not properly managed
- Uncoordinated design
- Unknown external factors
- Inflation
How can the Cost manager help control design to keep within budget
- Explain to team when the cost plan sits against the budget and discuss limitations
- Identify areas of design which may not be economical
- Regular project risk reviews
- Contribute to VE or cost saving sessions
What do you understand by the term benchmarking
Use of historical data from projects similar in nature as a comparison to check cost on project
Are you aware of value engineering and value management?
Value Engineering
- Method used to eliminate any unnecessary costs
- Achieve value for money on a project.
Value Management
- Method of highlighting possible opportunities to create value within a project
- Managing those solutions to ensure value is continuously delivered
- It encompasses the whole life cycle of a project, from design to completion and beyond.
How would you deal with a cost plan over budget
- Communicate the matter to the client and team
- Identify sreas where savings can be made
What were the abnormal and identified exclusions you refer to on DWP?
One building had a safe room
Externals
M&E
Used standard allowances
Exclusions - Remediation of any existing building defects, Works to existing façade
How do you go about providing cost for M&E
- Used NRM1 principles
- Market test
- Liaise with inhouse M&E QS
- Above allows me to make sure iv understood what is required and have made sufficient allowance
How does PTE differ from cost plan
- Final estimate before tender
- Allows cost to be produced in line with the pricing document to allow tender analysis
- Cost plan includes all project details
Types of inflation
Tender: Period from base date to date of tender returns
Construction: From tender return to mid point constriction
(As per NRM)
Purpose of cost planning
- Ensure clients value for money
- Make client and designers aware of cost consequences
- Monitor expenditure
- Help client make informed decisions
Can you talk about how you used historical data on DWP
- Cost models using existing projects
- Remember to use location time factors
- Included approrpiate inflation
What value engineering was suggested on DWP
Mainly reusing existing items (Carpet)
Reducing spec of high priced items
What would you take into consideration when advising OH&P
Percentage
* Location
* Level risk
* Project type and value
* Market conditions
What is optimism bias
Unconsiously downplay complexity on a project resulting in under estimates of costs
Purpose of NRM
Provide standard method of measurement and cost planning across industry
