Design Economics and Cost Planning Flashcards
(55 cards)
1
Q
What is the difference between an order of cost estimate and a cost plan?
A
- a cost estimate is prepared earlier on in the design process typically between RIBA Work Stage 0 - 2.
- this is when the level of design information is more limited and allows a cost estimate to be prepared on a cost per m2 or cost per functional unit basis
- a cost plan is produced typically at each RIBA Work Stage from Stage 2 onwards
As the design progresses more information can be included to eventually breakdown the estimated cost of the development elementally
2
Q
What is the difference between cost and price?
A
- cost is the total cost of labour, plant, materials and management deployed for a specific activity
- price is the amount a purchaser or client will pay for an item or product and is made up of the cost plus the main contractor’s profit margin
3
Q
How do you proceed if the cost plan exceeds the project budget?
A
- I would analyse the costs to assess the source of the increase and identify whether any element of work is abnormally high against the order of cost estimate
- when the reason for the overspend is identified I would then look to propose value engineering options to my client and design team to bring the forecast back in line with the budget.
4
Q
What is buildability?
A
it is harnessing the contractor’s expertise and knowledge during the design stage to generate ideas for effective and efficient methods of construction
5
Q
What are the advantages of build ability?
A
- can result in better programming, sequencing and construction methods
- a quicker more efficient programme can be achieved
- reduce capital and life cycle costs of the building can be obtained
- the quality in the finished building’s performance and maintenance characteristics can be improved
6
Q
What is wall to floor ratio?
A
- this shows the relationship between the wall area and floor area
- it is used to show the cost efficiency of the building
- the lower the ratio, the cheaper the building is to construct as there is less external envelope to construct in comparison to the floor area
7
Q
What is the most efficient shape?
A
- a building with a circular floor plate would offer the most efficient design as there is less floor to wall area
- however a circular floor plate has a poor lettable floor area and is difficult to fit out therefore a square floor plate is considered the most efficient
8
Q
How would you prepare an estimate for M&E works?
A
- I would ask an M&E specialist surveyor to undertake the estimate
- for feasibility estimates the M&E amount would be included in the m2 or functional unit rate
9
Q
What is a section 106 agreement?
A
S106s are agreements between local authorities and developers that are negotiated in the context of granting planning consent
10
Q
What is construction to ‘shell and core’?
A
- shell and core is the basic structure, services and envelope f the building
- normally includes the fit out of landlord and common areas e.g. reception, toilets, lifts and stair cores
- basic services are typically terminated at entry points to each of the lettable floor plates however life safety services infrastructure is normally provided
11
Q
What is a CAT A fit out?
A
- also known as a developers fit out
- provide generic fit-out items to suit most developers e.g. life safety, suspended ceiling tiles, raised floors, carpets, lighting and power distribution to floor plate
12
Q
What is a CAT B fit out?
A
- CAT B overlays the CAT A provisions with bespoke elements that are specific to the needs of the building’s user to enable the tenant to occupy the space
- e.g. partitions, power distribution to the floor boxes, data cabling, artwork, branding, finishes etc
13
Q
Where could you find the definitions for shell and core, CAT A and CAT B?
A
The British Council of Offices (BCO) fit-out guide
14
Q
What is BWIC?
A
- Builders work in connection and is usually set as a % of the services costs
- It accounts for the main contractor to perform any drilling, fixing, cutting and penetrations to enable the services installation
15
Q
What is an order of cost estimate?
A
- the determination of the possible cost of a building early in design stage in relation to the employer’s fundamental requirements
- takes place prior to preparation of a full set of working drawings or bills of quantities and forms the initial build-up to the cost planning process
16
Q
What is the purpose of an order of cost estimate?
A
- to establish if the proposed building project is affordable and if affordable to establish a realistic cost limit
- the cost limit is the maximum expenditure that the client is prepared to spend on the proposed building project
17
Q
What is the format of a feasibility estimate or order of cost estimate?
A
- this can be presented on a cost per m2, functional unit or elemental basis
- can also be presented as a range
- elemental rates for main elements e.g. substructure, external walls etc
- any site abnormal costs or enabling works
- other inclusions like preliminaries, contingency, inflation and location factor adjustments
18
Q
What is a functional unit?
A
- a unit of measurement that considers the prime use of a building e.g. hotel or hospital may be cost per bed
19
Q
Where would you get your rates from for a preliminary estimate?
A
- similar projects and historical cost data such as previous tender submissions or a contract sum analysis
- other sources may include estimating price books, BCIS or specialist contractors
20
Q
What information do you need to be able to carry out an order of cost estimate?
A
- building location
- type of building
- floor area or number of functional units
- storey height
- whether raised access floors or suspended ceilings are required
- initial floor plans, roof plans, elevations or sections
- requirements for refurbishments to existing building and enabling works
- indication of specification and quality
- programme, procurement and contract strategy
- budget and cashflow restraints
- site conditions and ground conditions
- indicative M&E design intent
- details of professional fees, development costs, VAT and treatment of inflation
21
Q
What is a cost plan?
A
- presents the estimated cost of the development into an elemental or functional format
- shows how the design team proposes to distribute the funds available on the different elements f the proposed building
22
Q
What is the purpose of a cost plan?
A
- used by the cost consultant to control the development of the design
- identifies the clients agreed cost limit and how the money is to be allocated to the different elements of the building
23
Q
When would you carry out a cost plan?
A
- a formal cost plan is typically between RIBA Stage 2 - 4
- stage 2 is concept design
- stage 3 is spatial coordination
- stage 4 is technical design
- a cost plan at stage 4 will typically form the basis of a pre-tender estimate to compare tender submissions against
24
Q
What are the principle components of a cost plan?
A
- construction costs
- preliminaries
- contractors oh&p
- contingency
- inflation
- assumptions
- exclusions
- area schedule
- list of drawings and specifications used
25
Name the main elements of an elemental estimate
- substructure
- superstructure
26
What is usually excluded from a cost estimate?
- professional fees
- VAT
- client decant costs
- loose furniture and fittings
- inflation
- site acquisition costs
- s106s
- removal of asbestos
27
Why is VAT excluded?
- different clients will incur different levels of VAT
- I would not be in a position to know the correct rates unless informed of it
28
What is contingency?
a sum included within the estimate to cover unknown expenses or unmitigated risks during the project
29
How is contingency assessed?
- the amount included should reflect the risks and unknown specific items associated with the project
- during the early design stages a contingency allowance can be included as an overall % of the cost estimate at around 5%-10%
- as more design information becomes available a risk register can be compiled and each item assigned a probability and cost impact. The total cost of risk register items can then be included as the project contingency
30
What are the stages of the RIBA Plan of Work?
0 - strategic definition
1 - preparation and brief
2 - concept design
3 - spatial coordination
4 - technical design
5 - construction
6 - handover
7 - use
31
How do you take account of inflation when preparing a cost estimate?
I take into account inflation through the use of tender price indices and include adjustments for construction inflation and tender price inflation
32
What time period would construction inflation be included for?
I would allow for construction inflation from the anticipated start of the project t mid-way point of the project
33
What time period would tender price inflation be included for?
I would allow for tender price inflation from the estimate base date to the anticipated tender return date
34
What is meant by the base date within a cost estimate?
- base date refers to the date on which rates and prices contained within a cost estimate are based on
- these are included for the basis of calculations e.g. adjusting the rates for inflation in the future, the base date can be used as the starting point from which inflation would be adjusted
35
What does TPI stand for?
tender prices indices
36
What does TPI show?
- they reflect changes in the level of tender prices over a period of time
- price adjustments take into account the level of inflation depending on current and forecast market conditions
37
Where can you obtain tender price index information from?
- the service I use to obtain tender price indices is the building cost information service
- larger cost consultancies also produce their own in-house tender price forecasts
38
Why do you need to take account of location?
- inflation needs to be accounted for to anticipate the changes in prices for labour, plant and material
- need to account for inflation from the date the cost estimate is produced to the anticipated start date of the project
- this is to ensure accuracy of the estimate for the client and to ensure the project remains within the cost limit that has been established
39
What does BCIS stand for?
Building cost information services
40
What is BCIS?
the BCIS provides construction cost and price information through publications, online services and price books
41
Where do you get cost information from?
- previous tender submissions
- previous CSA
- benchmarks
- BCIS
- building cost models
- Price books e.g. SPONS
- specialist sub contractors and suppliers
42
What do you understand by the term VE?
- Value engineering
- an organised approach aimed at providing the necessary functions of the building taking into account the clients objectives at the lowest cost without detrimental affects to quality, reliability, performance or delivery
43
What do you understand by the tea VM?
- Value management
- proactive process of defining what value means to a client and putting procedures in place to ensure that maximum value is delivered for the client first time
44
What is value, what does value mean?
- value is a measure of worth taking into account the overall usefulness and benefits that are delivered in relation to the cost being paid for it
- value can mean different things to different clients
45
What happens during the VE process?
- the design team will typically be brought together in a meeting including the client, QS, architect, engineers and potentially the MC
- the team pool together their expertise and suggest different value engineering proposals
- chairperson of the meting will monitor the proposals against the clients objectives around value
- it is the teams responsibility to deliver increased value for money by offering cost effective solutions without compromising the overall usefulness of the building when considering the clients objectives
46
What are the phases of the VE process?
- information phase
- speculation phase
- evaluation phase
- development phase
- presentation phase
47
Why is VM needed?
- each client has their own specific objectives and definition of what value means to their organisation
- client organisations are made up of different working groups with contrasting priorities
- if agreements concerning the definition of value are not reached then chances of perceived failure of the project increases
- VM is needed to reach an agreement on what value is defined as and to reach a shared understanding on the objectives that are being sought
48
What are life cycle costs?
the costs that will be incurred over a defined period of operating and maintaining a building or an asset including repair, maintenance, replacement, cleaning, decorating, services provision and disposal
49
What are the advantages of life cycle costing?
- life cycle costing allows consideration of the long term implications of a decision
- it enables informed decisions to be made on material selection
- can result in lower operational, maintenance and replacement costs
- can be used to plan future maintenance requirements ensuring easier access and less disruption to the operation of the building
50
What are the disadvantages of life cycle costing?
- future costs are optional and the costs of maintenance can always be deferred
- components are not always replaced due to end of life which is impossible to assess at design stage
- the cost of defects caused by bad workmanship and design faults cannot be predicted
- it is hard to predict life spans, future inflation and maintenance requirements over long periods
51
What costs should be considered in life cycle costing?
- capital costs
- operational costs
- maintenance costs
- replacement costs
- disposal costs
52
Where can you get information about maintenance costs?
- Building maintenance costs information service, part of BCIS
- from sub contractors and suppliers
53
How does the payback period method work?
- it judges an investment in terms of the time period cover which the invested sum is returned in cost savings
- increased expenditure on a higher quality component is viewed as the investment and the savings provided in the form of future costs is viewed as the revenue
- the best option would be the one that read the investment in the shortest time
54
What sort of materials is the payback period method use for?
- often used to evaluate the options for incorporating sustainable technologies
- considered suitable for elements that have a very high initial capital cost but will pay back this initial investment over a period of time in terms of reduced running costs
55
Why might a client accept higher capital costs?
- for prestige reasons
- when considering the replacement or repair may be inconvenient even if the solution is cheaper
