Quantification and Costing of Construction Works - Level 1

Question 1

Tell me about two methods of costing you are aware of.

Answer 1

Functional unit method
Floor area method
Elemental method

Question 2

What are standard methods of measurements?

Answer 2

RICS New Rules of Measurement (NRM)

Question 3

What are pricing books and can you name one?

Answer 3

Contain rates for materials / works
SPONS

Question 4

What standard methods of measurement are you aware of and what are they used for?

Answer 4

NRM1 - cost estimating
NRM2 - Construction costs / BQ
NRM3 - Cost estimating including operation and maintenance

Question 5

What is the advantage you will have by preparing a BoQ based on a standard method of measurement?

Answer 5

Recognised by all professionals and contractors, they understand the basis of measurement and know how to price it.
Save money for contractor and clients - each QS / estimator does not have to remeasure as they know how the rules have been applied

Question 6

Why is a standard method of measurement required?

Answer 6

To provide consistency across the industry - easier, less time consuming and cost effective

Question 7

When are approximate quantities to be used?

Answer 7

Measuring building works in elemental cost plans - if sufficient information is available should be measured using approx quantities.

Or is this in building contracts with approx quantities?

Question 8

What is a functional unit?

Answer 8

Unit of measurement based on particular function of the completed building - eg:
school - number of pupils
hospital - number of beds
office - number of desks

Question 9

Tell me what you know about the NRM suite of documents?

Answer 9

NRM1 - estimating and cost planning of construction
NRM2 - construction works
NRM3 - estimating and cost planning construction and operation and maintenance
All updated and published in 2021

Question 10

Tell me how the NRM differs from the Standard Method of Measurement of Building Works 7th edition (SMM7)

Answer 10

SMM7 was purely designed for production of BQ for tender purposes
This resulted in lack of guidance and uniformity around preparing cost estimates and cost plans when using SMM7
NRM was introduced to provide a common and consistent basis for the production of the order of cost estimate and cost plans and to give Employers more confidence around their inclusions.

Question 11

When was NRM last updated and what changes were made?

Answer 11

They were reissued in October 2022 as practice information
previously issued in Oct 2021 as guidance notes but no material changes to contents of documents

Question 12

What are the main benefits of NRM2?

Answer 12

Rules for measurement of building works - benefit is that standard method is understood by whole construction industry, promotes trust and makes measurement more efficient and cost effective for all parties. Easier for all stakeholders to understand

Question 13

Tell me what the main aim of NRM3 is.

Answer 13

Provide standard method for measurement of building works, capital costs operation and maintenance costs - whole life costs / life cycle costing

Question 14

Name three factors that affect the accuracy of an estimate.

Answer 14

Level of detail in the design information provided
The client - their experience and brief
Economy - how dependent on external factors
Contingency - including a contingency to cover risks and unforeseen issues
Rate accuracy - how accurate rate is - how similar is previous project and what variables have change
External influences

Question 15

What level of fees should you allow within a cost plan?

Answer 15

A percentage based on previous projects
Or if design team appointed - consultant fees, main contractor feee estimate and main contractor design fee estimate (contractor fee if applicable at this stage..)
Or exclude the professional fees

Question 16

What are the 4 stages of cost planning under NRM 1?

Answer 16

Order cost estimate (RIBA Stage 1 - preparation and brief)
Cost plan 1 (RIBA Stage 2 - concept design)
Cost plan 2 (RIBA Stage 3 - spatial coordination)
Cost plan 3 (RIBA stage 4 - technical design)
Pre-tender estimate? Contractor engagement …

Question 17

How is risk dealt with within NRM 1?

Answer 17

Risk allowance is included - based on four different risk categories:
- Design development risk
- Construction risk (site conditions, ground conditions, existing services, delays by statutory undertakers)
- Employer change risk (client driven design changes)
- Employer other risk (other client risks eg early handover, postponement, acceleration, availability of funds, liquidated damages etc)
In each category potential risks identified and/or percentage applied - percentage is calculated by multiplying the base cost estimate by selected percentage addition.

Question 18

How is inflation dealt with within NRM 1?

Answer 18

Include for potential future effects of inflation on the base date rates over a period of time - ie from estimate base date to date of construction completion.
Tender inflation - period from estimate base date to tender return date
Construction inflation - period from tender return to midpoint of construction period

Both tender and construction inflation rates are calculated by applying percentage to Cost limit and adding to cost limit

Question 19

Why do we have NRM?

Answer 19

To provide a standard form of measurement - reduce costs to all parties, make construction estimating easier for all stakeholders to understand and to improve efficiency

Question 20

What are the benefits of NRM?

Answer 20

Promotes trust
Cost estimating is more efficient and accurate
Reduces costs for all parties

Question 21

What could you use for measuring builders’ quants?

Question 22

What is ICMS
When was it introduced
What did it introduce
What was the aim
When was it last updated
What changes were made
What is current edition

Answer 22

International Cost Management Standard (ICMS): Global consistency in presenting construction life cycle costs and carbon emissions
Updated in 2019 to incorporate life cycle costs, second edition enables classification of costs across whole project life cycle, eliminates inconsistencies and discrepancies when accounting, comparing and predicting project finances.
Updated in 2021 to include framework allowing interrelationship between construction cost and carbon emission.
Currently 3rd Edition.
Aim is to develop and implement international standards for benchmarking, measuring and reporting construction project costs.

Question 23

What is a cost classification system?

Answer 23

EG ICMS:
principles based international standards that set out how to report group and classify construction project costs in structured and logical form.
It creates seamless, global pyramidal hierarchy of construction cost classification: from high-level global cost benchmarking to granular, local cost measurement.

Question 24

What is CESMM and POMI?

When might they be used?

Answer 24

Civil Engineering Standard Method of Measurement
Principles of measurement international

CESMM - for civil engineering work
POMI - pricing construction work - may be more common internationally (older than NRM)

Question 25

How have you valued works for: - interim payments; - change; and - final accounts

Question 26

What is the purpose of measurement?

Question 27

In what different ways can floor areas be measured and reported?

Answer 27

GEA - gross external floor area GIA - gross internal floor area NIA - net internal area

Question 28

Explain your understanding of the build-up of unit rates and prices from first principles i.e. labour

Question 29

How do you build-up of costs in respect of preliminaries?

Answer 29

Look at fixed costs (eg set up or take down), or one off costs or time related costs eg electric charges, weekly rates, management time. Information required: - contract docs - location - type of project (new build or refurb) - size of project - temporary works - security - methodology - programme - services - employers accommodation - contractor designed work - sectional completion - insurances / bonds

Question 30

Why would you not simply apply a % addition in respect of preliminaries?

Answer 30

A % is a very basic way to quantify - prelims vary company to company and depending on size of organisation

Question 31

How do you quantify overheads and profit?

Question 32

How do you quantify risk and calculate risk allowances?

Question 33

How do you forecast tender and construction inflation?

Answer 33

Using an inflation monitoring tool - eg BCIS or RPI

Question 34

Why is it important to understand the description that accompanies numeric data?

Question 35

Why is important to have a knowledge of the different categories of measurement?

Question 36

How is an Order of Cost Estimate prepared?

Question 37

When might you prepare a cost estimate during the different stages of design?

Question 38

What is the purpose of Order of Cost Estimates?

Question 39

What are the sources of cost data that are often used to prepare estimates?

Answer 39

1) In-house cost data - previous tenders and final accounts 2) BCIS 3) Price books - eg SPONS

Question 40

At what stage do the order of cost estimates get carried out?

Answer 40

RIBA Stage 1 - preparation and briefing

Question 41

Who needs an order of cost estimate?

Answer 41

The client to understand the cost of the project and to set cost limits

Question 42

What types of Order of Cost Estimate are you aware of?

Question 43

Explain your understanding of the following: - feasibility budget; - pre-tender estimates.

Answer 43

Feasibility budget - Pre-tender estimate -

Question 44

What information do you need to be able to carry out a feasibility estimate?

Question 45

What is the typical % error on a feasibility estimate?

Question 46

What bases of an estimate are you aware of?

Question 47

How does the NRM approach measurement for order of cost estimates?

Question 48

Name the main elements of an elemental estimate?

Question 49

How would you prepare an estimate for M&E works?

Question 50

Explain the following: functional unit rate; elemental; and detailed quantities.

Question 51

What are the components of an estimate?

Question 52

What is usually excluded from an order of cost estimate?

Answer 52

VAT

Question 53

How do you source use and adjust cost data?

Question 54

What benchmarking techniques do you use?

Question 55

How do you report cost estimates?

Question 56

What are the cost estimating stages?

Question 57

What is the difference between a cost estimate a cost plan and a cost analysis?

Question 58

How do you calculate unit rates for items from first principles?

Question 59

What is a base date?

Answer 59

NRM1 - the date at which the cost reported in the cost estimate or cost plan apply, exclusive of any adjustments for risk allowances and/or inflation

Question 60

What construction and tender inflation do you utilise?

Answer 60

BCIS tender inflation rates and construction inflation rates

Question 61

Explain site/location specific conditions e.g. ground conditions and site constraints

Answer 61

Site specific conditions: size of site access to site existing services topography ground conditions proximity to other properties / buildings vegetation Location specific conditions: distance to services labour force availability transport costs access

Question 62

How does the programme affect cost estimating?

Answer 62

Time related preliminaries will increase with longer programme duration. May be weather related issues for certain materials and construction methods If client wants programme reduced may increase labour costs to speed up processes

Question 63

How does sustainability affect cost estimating?

Question 64

Explain your application of risk allowances.

Answer 64

In a cost plan NRM1 defines risk allowance as "Quantitative allowance set aside as a precaution against risks and future requirements to allow for uncertainty of outcome".

Question 65

What would you include and exclude when cost estimating?

Answer 65

NRM1 describes the following key constituents of cost estimate: - base cost estimate = total of the facilitating works estimate + building works estimate + main contractors prelims estimate + main contractors OHP estimate + other development and project costs estimate. (Base costs estimate does not include allowance for risk or inflation) - allowances for risk and inflation should be calculated separately and added to base cost.

Question 66

What is the purpose of cost planning?

Answer 66

NRM1 defines main purpose as: - ensure clients are provided with value for money - make clients and designers aware of the cost consequences of their requirements - provide advice to designers that enables them to arrive at practical and balanced designs within budget - keep expenditure within the cost limit approve by the client; and - provide robust cost information with which the client can make informed decisions Cost planning is a budget distribution technique implemented during the design stages of a building project. Involves the critical breakdown of cost limit into cost targets for each element of the building. Cost targets are the recommended expenditure for element. The elemental cost plan is statement of how project team proposes to distribute the available budget among the elements of the building.

Question 67

Give some examples of why a project might have a cost overrun?

Answer 67

If there is a lack of cost management - - failure to manage risk allowance expenditure - overspending without restriction / check - failure to correctly assess variations claims

Question 68

What is the purpose of cost management?

Answer 68

To control spending against the budget and keep control of any changes to cost so that they can be addressed.

Question 69

What are the main tasks of the cost manager?

Answer 69

- manage risk allowance expenditure - initiate action to avoid overspending - preparing pricing docs for tendering - evaluate and analyse tender bid - prepare interim valuations - value variations / compensation events - negotiate and agree final accounts - issue final reports or statements - provide initial cost advice on whole life costs - produce cost reports, estimates and forecasts - prepare and maintain the cash flow forecast

Question 70

What are some of the reasons we have cost overrun?

Answer 70

- ambiguous client briefs or changes in later stages of project - unrealistic cost estimates - project risk is realised and not properly managed - inadequate management control or processes - uncoordinated design - unknown external factors - unsuitable tendering and / or procurement strategy selection - statutory authority influences eg onerous planning permission conditions - inflation or changing market conditions

Question 71

What stages of construction would involve cost planning?

Answer 71

All stages - in particular RIBA stage 2, 3, 4 and 5

Question 72

How would you prepare issue and present cost plans?

Answer 72

Follow NRM1 section 3 which sets out measurement rules for cost planning: Constituents: 1. Facilitating works estimate 2. Building works estimate 3. Main contractors prelims estimate 4. Sub-total 1+2+3 5 Main contractors OHP 6 Works estimate 4 + 5 7 Project and design teams fees 8 Subtotal 6+7 9 other project costs 10 = Base Cost Estimate 8 +9 11 Risk allowance (Design development risk + construction risk + employer change risk + employer other risk) 12 Cost limit (excluding inflation ) 10 + 11 13 Tender inflation 14 Cost limit (excluding construction inflation) 12 + 13 15 Construction inflation estimate 16 Cost limit (including inflation) = 14 + 15 17 VAT

Question 73

What is the purpose of elemental cost planning?

Answer 73

An elemental cost plan is a statement of how the project team propose to distribute the available budget among the elements of the building. It provides a frame of reference from which to develop the design and maintain cost control. It provides a WBS and CBS which can be used to redistribute works in elements to construction work packages for procurement purposes.

Question 74

How would you set a budget?

Answer 74

Follow NRM1 Section 3 to prepare a cost plan with proposed base cost limits which can be discussed with client and a budget for whole project or elements set.

Question 75

What are the components of an elemental cost plan?

Answer 75

Follow NRM1 section 3 which sets out measurement rules for cost planning: Constituents: 1. Facilitating works estimate 2. Building works estimate 3. Main contractors prelims estimate 4. Sub-total 1+2+3 5 Main contractors OHP 6 Works estimate 4 + 5 7 Project and design teams fees 8 Subtotal 6+7 9 other project costs 10 = Base Cost Estimate 8 +9 11 Risk allowance (Design development risk + construction risk + employer change risk + employer other risk) 12 Cost limit (excluding inflation ) 10 + 11 13 Tender inflation 14 Cost limit (excluding construction inflation) 12 + 13 15 Construction inflation estimate 16 Cost limit (including inflation) = 14 + 15 17 VAT

Question 76

What is a cost plan?

Answer 76

A framework to estimate the total cost of a construction project calculated using design information available and developed as the design progresses.

Question 77

What are the different types of cost plan?

Question 78

What would you do if the cost plan is over budget?

Answer 78

Communicate with the client and project team in a clear and concise manner. Identify areas where potential savings can be made, possibly in terms of material specification or design.

Question 79

Explain the following terms: cost limit; cost target

Answer 79

Cost limit: NRM1 "max expenditure the client is prepared to make in relation to the completed building. Includes construction costs, the cost of professional services, certain other project costs, items required post completion and during its operation, and risk allowances. Cost target: The recommended total expenditure for an element. The cost target for each element is likely to be derived from several sub-elements and components.

Question 80

What sources of data do you use in cost planning?

Answer 80

- BCIS information - published pricing books (SPONS and BCIS) - pricing documents from previous projects - cost analysis and cost models produced in-house - speaking to contractors, subcontractors and suppliers - existing client info (benchmarking from previous projects)

Question 81

What benchmarking techniques do you use in cost planning?

Answer 81

- produce a clear document that shows various cost plan elements side-by-side with benchmark projects. - This will identify items considered abnormal so I can endeavour to justify cost anomalies for flagged items - benchmarking uses historical data from projects of similar nature - can be used as a comparison or check for cost planning purposes - can highlight areas of design that are not value for money, or price offered is not in line with market conditions.

Question 82

What is: - value management; - value engineering; - life cycle costing

Answer 82

Value management: Value engineering: Life cycle costing: An objective method for measuring and managing the lifetime costs of any project or asset. In construction, it enables design options to be compared from a lifetime perspective with a view to understanding and reducing overall costs associated with owning and/or operating the asset.

Question 83

What factors affect the cost efficiency of a design e.g. wall / floor ratio and storey heights?

Question 84

How do you report cost plans?

Question 85

What items should be listed under the estimating element?

Answer 85

Elemental cost plan facilitating works and building works should be structured as follows: a) Group element in first heading b) Element is given in second heading c) First column lists sub-elements and definition rules applicable for each sub-element d) Second & Third column lists components and unit of measurement e) Fourth column - rules for measuring components f) Final 2 columns - describe terms included and excluded from each sub-element and component.

Question 86

How did you develop your initial cost plan through the pre-tender phase of the project ensuring all parties understand the financial position of the project?

Question 87

What are the formal cost plan stages of a project?

Answer 87

NRM1 describes formal cost planning stages: Formal cost plan 1 = RIBA 2: Concept Design Formal cost plan 2 = RIBA 3: Spatial Coordination Formal cost plan 3 = RIBA 4: Technical Design

Question 88

How would you identify risk within the cost plan? What risk allowances does the NRM recommend should be included within a cost plan?

Answer 88

Risk allowances: reflect the clients risk exposure. Risk allowances should be based on the results of a formal risk analysis and included in the formal cost plan. Risk allowances shouldn't be standard percentages but considered assessment of risk, accounting for the completeness of the design and other uncertainties such as the amount of site investigation completed to date. Risk registers should be reassessed at regular intervals throughout RIBA stages to ensure estimates, formal cost plans and cash flows realistically reflect potential impact of residual risk. Risk categories: - design development risk - construction risk - employer change risk - employer other risk

Question 89

Do you need a drawing to complete a cost plan?

Answer 89

Yes - as much design information as is available - see Appendix C of NRM1

Question 90

Tell me about your understanding of RICS Property Measurement.

Answer 90

It is an RICS professional standard that all member are required to comply with when measuring buildings

Question 91

When would you use NIA as a measurement basis?

Answer 91

IPMS3 (formerly NIA) office measurement for agency and valuation, market analysis and marketing of offices for rental

Question 92

When would you use GIA as a measurement basis?

Answer 92

Gross Internal Area IPMS2 for office and residential for costings for method of measurement for basis of calculating building cost and reinstatement costs.

Question 93

When would you use GEA as a measurement basis?

Answer 93

IPMS 1 (formerly GEA - gross external area) - use for planning Basis for measurement for planning applications and approvals, site coverage etc

Question 94

Tell me about what is included in: NIA GIA GEA

Answer 94

NIA: GIA: GEA:

Question 95

What measurement basis would you use for office property?

Answer 95

IPMS2 - office (formerly GIA)

Question 96

What measurement basis would you use for industrial property?

Question 97

What measurement basis would you use for retail property?

Question 98

How does RICS Property Measurement differ from the former Code of Measuring Practice?

Question 99

Why is accuracy important when you measure buildings?

Question 100

Tell me about how you use floor plans to facilitate measuring buildings?

Question 101

How do you calibrate a laser measurer?

Question 102

Why do you take check measurements?

Question 103

Tell me about a strength and weakness of a measuring technique you have used.

Question 104

When would you use a tape measure?

Answer 104

To measure a short, straight distance

Question 105

When would you use a trundle wheel?

Answer 105

To measure a larger straight distance between two points - flat ground

Question 106

What is a potential source of error when measuring?

Answer 106

Not going in a straight line

Question 107

What is IPMS?

Answer 107

International Property Measurement Standards

Question 108

Why has IPMS been introduced?

Answer 108

To provide for standardised approach to measuring buildings

Question 109

What IPMS bases are you aware of and how would you apply one of them?

Answer 109

Numbered 1- 4 You would decide which definition the item that was going to be measured falls into and then follow rules

Question 110

What building types does IPMS relate to?

Answer 110

All buildings - different numbers are different parts of buildings

Question 111

What is dual reporting and when would you use it?

Question 112

What are limited use areas and how do you report these?

Question 113

How has IPMS been incorporated into Property Measurement?

Answer 113

RICS has prepared IPMS conversion pro formas that provide formulas to convert RICS Code of Measuring practice measurements into IPMS.

Question 114

What are the differences between a defined and an undefined lump sum?

Question 115

Explain what BCIS Standard Elemental Cost Plans are used for.

Answer 115

Benchmarking against elemental cost plan

Question 116

What is the importance of standard methods of measurement?

Question 117

What did you learn are the fundamentals of quantification? - How do you use this through the delivery of a project?

Question 118

What guidance does NRM2 provide for quantification and costing?

Question 119

How are the measurement rules defined?