Design Economics & Cost Planning Flashcards
(37 cards)
What are the RIBA stages of work?
▪ Stage 0 - Strategic Definition
▪ Stage 1 - Preparation & Brief
▪ Stage 2 - Concept design
▪ Stage 3 - Spatial Coordination
▪ Stage 4 - Technical Design
▪ Stage 5 - Manufacturing Construction
▪ Stage 6 - Handover
▪ Stage 7 - In use
Which cost plans / estimates align with these stages?
▪ RIBA Stage 0 (Target) - Initial or ‘rough’ Order of Cost Estimate
▪ RIBA Stage 1 (Target) - Order of Cost Estimate
▪ RIBA Stage 2 (Improve) - Formal Cost Plan 1
▪ RIBA Stage 3 (Improve & Control) - Formal Cost Plan 2
▪ RIBA Stage 4 (Improve & Control) - Formal Cost Plan 3 / Pre-Tender Estimate
What is the difference between tender and construction inflation?
- Tender - allowance in cost estimate/cost plan for fluctuations in the basic prices of L/P/M during the period of the estimated base date to the tender returns
- Construction - allowance in cost estimate/cost plan for fluctuations in the basic prices of L/P/M from date of tender return to construction period mid-point
What sections are included in a cost plan? (NRM1)
- Facilitating Works
- Substructure
- Superstructure
- Internal finishes
- FF&E
- Services
- Works to existing buildings
- Pre-fabricated units
- External Works
- Preliminaries
- OH&P
- Fees (Project & design)
- Other project costs (Land, planning, Building Control, insurances)
- Risk (Design Dev, construc, Empl change, Empl other)
- Inflation
What are provisional sums?
They are an estimate or allowance for items without the detail, definition or design to be able to produce an accurate cost.
Or items that employer may/may not wish to carry out themselves
Defined - Contractor has made an allowance for programming and prelims
Undefined - Contractor hasn’t allowed for planning, programming or prelims and therefore may be entitled to an EoT or additional prelims.
How would you manage a provisional sum?
Add/omit using the contract
What are the sections in a pre-contract cost report?
▪ Executive Summary
▪ Narrative on the latest financial position (based on cost plans)
▪ Value Engineering
▪ Risks & opportunities
▪ Client information items pending
▪ Overview of market conditions
What are the sections in a post-contract cost report?
▪ Executive Summary / overview
▪ Contract Sum
▪ Current cost
▪ Projected Final Account
▪ Provisional Sums
▪ Changes / Variations (Pending & instructed)
▪ Claims
▪ Risks
▪ Contingency Position
▪ Cashflow
What are the NRM?
The New Rules of Measurement are a guidance note that sets out best practice for measurement in the construction industry. They are produced by the RICS.
What are the different parts of the suite?
NRM1 - Order of cost estimating and cost planning for capital building works
NRM2 - Detailed measurement of construction works
NRM3 - Order of cost estimating and cost planning for maintenance works
Are there any other guidance documents for measurement you could refer to?
RICS Code of Measurement Practice
What is the difference between a order of cost estimate and cost plan?
○ Order of Cost Estimate - An estimate based on little detail, just using the employer’s initial brief. Based on benchmark data of a similar project. Typically £/m2.
○ Cost Plan - An estimate based on a specific design. Level of design available is more detailed. Rather than £/m2, you typically have an elemental breakdown, including quantities and rates.
What are the different types of order of cost estimate?
Budget - Sets the client budget. (Comes first)
Feasibility - Advises the client on the affordability of development.
Can you explain the sources of cost data?
Internal
○ Market rates app
○ Past projects
○ Tender returns
○ Quotations
External
○ BCIS
○ Spons
How would you select appropriate benchmark data?
- Use a combination of BCIS and past projects to find similar schemes.
- Select 3 or 4 that are most similar and, after adjusting all for time and location, compare the average costs against the initial client brief for my scheme.
- Need to make sure to have an awareness of the abnormals for each scheme and factor these in to your data analysis.
How would you adjust these rates / costs for benchmarking?
By time and location factor.
Are you aware of the Pareto rule?
80/20 rule - 80% of cost is set by the time 20% of the design is undertaken.
This is why it is important as a QS to be involved in the process as early as possible.
Can you please explain the difference between VE and scope reduction?
Value engineering is changing elements of the work to increase the value for money for a client, scope reduction is simply that, reducing the scope to cost cut.
Can you provide an example of VE?
○ Bringing specification back in line with the clients brief in terms of internal finishes.
○ Alternative lift supplier that offered a significant cost saving.
○ Review design which could be more complicated? (cladding)
○ Review general specifications
What is value management?
It is used to assess the value of a project and maximise the value for the client.
Value engineering forms a part of value management.
What is the process of Value Management?
Is the overall term used to achieve value on a project. Value isn’t necessarily money related.
Split into three main categories:
- Value Planning - A proactive approach as to how to achieve value on the project.
- Value Engineering - A reactive approach to reduce costs on the scheme. Do this by scheduling out costs vs function.
- Value Analysis - A post project approach to review what value has been achieved.
What are the alternatives to a CSA or BoQ?
○ Activity Schedule - a list of the activities that the contractor expects to be undertaken in order to complete their contractual obligations.
○ Schedule of Rates - a schedule of rates is agreed and then the contractor puts actual quants against as construction progresses.
Can you tell me the difference between a feasibility study and a formal cost plan?
Feasibility report would generally be undertaken at Stage 1 and based on functional unit or cost/m2 based on the GIFA or IPMS measurement if the building was applicable to IPMS (e.g. office fit out)
You’ve noted in your documents that you used market testing, past project data and pricing books. What is the importance of having multiple sources of cost data?
Reliability of rates by assessing different rates for the same element. Helps with making informed decisions.
