T022 Design Economics And Cost Planning Rics Apc

Front 1

What types of estimate are there?

Back 1

Budget / feasibility
Cost estimate
Cost plan

Front 2

What is a feasibility estimate?

Back 2

A high level exercise to assess whether a project is financially viable and to set an outline budget for the scheme

Front 3

What is the format of a feasibility / budget estimate?

Back 3

Rate per m2 or per functional unit
May be presented as a range

Front 4

What is a functional unit?

Back 4

The ‘factors which express the intended use of the building better than any other’
E.g. number of bedrooms in a hotel, number of beds in a hospital

Front 5

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

Back 5

Type of building (function)
New build or extension
Location
Size
Indication of quality
Site visit

Front 6

What is the % error on a feasibility estimate?

Back 6

10%

Front 7

What is a cost estimate?

Back 7

A forecast of the possible cost of a building based on historical data

Front 8

When would you do one?

Back 8

Stage C/D

Front 9

What are the principal components of a cost estimate?

Back 9

Construction cost
Preliminaries
Contractor’s OH&P
Contingency
Inflation
Assumptions - programme
Exclusions
Area Schedule
Basis of Estimate – drawings / specifications list

Front 10

Name the main elements of an elemental estimate

Back 10

Substructure – excavation and substructure
Superstructure – frame, upper floors, external walls, roof, internal finishes
Services
External works

Front 11

What is usually excluded from a cost estimate?

Back 11

Professional fees
VAT
Client decant costs
Loose fixtures and fittings
Inflation
Site acquisition costs
Section 106s
Removal of asbestos

Front 12

Why is VAT excluded?

Back 12

Because different clients will incur different levels of VAT, and might not be applicable.

We would not be in a position to know the correct rate unless informed of it

Front 13

What is the % error on a cost plan?

Back 13

5%

Front 14

What is contingency?

Back 14

A sum included in the estimate to cover unknown expenses or unmitigated risks during the project

Front 15

How is contingency assessed?

Back 15

The amount included should reflect the risks and unknowns specific to the project.

During early estimates when little information is available it is common to include a %
At the end of stage C it is usually 10%

This should reduce as more information becomes available and the unknowns decrease
At the end of Stage E it is usually 5% (2.5% design and 2.5% construction contingency)
It is common to have a higher % for refurbishment work due to the higher level of unknowns and therefore risks

Front 16

What are preliminaries?

Back 16

They define the scope of works
Include the project particulars, lists of drawings, desciprtion of the site, scope of work, details of management arrangements
Often contain items for pricing which are general items needed by the contractor to carry out the work that cannot be attributed to specific items of work

Front 17

Where do you find the guidelines to prepare preliminaries?

Back 17

NRM2 (used to be SMM7)

Front 18

Name some preliminaries sections

Back 18

NB This is SMM7 and needs revision *****

A10 – project particulars
A54 – provisional sums

Front 19

What should be considered when assessing preliminaries levels?

Back 19

Length of contract
Location – accessibility, space restrictions, accommodation possibilities etc
Type of project – new build / refurb, tower / one story etc
Size of project
Need for temporary works
Need for security
Limitations on method and sequencing of works, working hours – supervision requirements
Sectional completion
Availability of services
Level of contractor’s designed works

Front 20

How do you take account of inflation when benchmarking / cost estimating?

Back 20

Through the use of TPIs

Front 21

What does TPI stand for?

What do TPIs show?

Back 21

Tender Price Index

They reflect changes in the level of pricing contained in the lowest accepted tenders for new work to take account of market conditions – compares against base rates

Front 22

Where can you get this information from?

Back 22

BCIS

DL TPI forecasts – published in Building

In house forecasts

Front 23

How do you take account of location, and why do you need to take account of location?

Back 23

Through the application of location indices

Different market conditions in different locations

Different cost of materials, different wage rates etc – impact on tender levels

Front 24

What does BCIS stand for, and what is it?

Back 24

Building Cost Information Service

Provides construction cost and price information through publications, online services and price books

Front 25

What is a cost plan?

Back 25

Presents the estimated cost into a structural elemental or functional format.

It shows how the design team proposes to distribute the funds available on the elements of the proposed building.

Front 26

What is the purpose of a cost plan?

Back 26

It is used by the cost consultant to control the development of the design.

It identifies the client’s agreed cost limit and how the money is to be allocated to the different parts of the building.

Front 27

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

Back 27

Cost plan is a plan of costs for the works in preparation for turning into a cost report to check against.

Estimate is a forecast of construction cost

Front 28

What is buildability?

Back 28

Harnessing the contractor’s expertise and knowledge during the design stage

Front 29

What are the advantages of buildability?

Back 29

Better programming, sequencing and construction methods – a quicker construction time

Lower capital and life cycle costs

Improved quality in the finished building’s performance and maintenance characteristics

Front 30

What is a wall to floor ratio?

Back 30

This shows the relationship between wall area and floor area

It is used to show the cost efficiency of the building

The lower the ratio the cheaper the building as there is less external wall area per m2 of floor area

Front 31

What is the most efficient shape?

Back 31

A circle BUT this is not the most practical shape as it has a poor lettable floor area – difficult to fit out THEREFORE a square is the best

Front 32

What is the difference between cost and price?

Back 32

Cost is the total of labour, plant, materials and management deployed for a specific activity

Price is the amount a purchaser / client will pay for an item or product – it is cost plus profit

Front 33

What information would you expect the design team to provide at stage D?

Back 33

Detailed design information approaching that of tender documentation.

Front 34

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

Back 34

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/functional unit rate

Front 35

What is GEA?

Back 35

Gross External Area

This is the area of the building measured externally at each floor level

Front 36

What is GIA?

Back 36

Gross Internal Area

This is the area of the building measured to the internal face of the perimeter wall at each floor level

Excludes external open sided balconies, fire escapes, canopies, external walls, fuel stores

Front 37

What is NIA?

Back 37

Net Internal Area

This is the area of usable space measured to the internal face of the perimeter wall at each floor level

Excludes the above and internal structural walls and columns, spaces with headroom less than 1.5m, corridors and circulation space used in common, permanent lift lobbies, toilets, cleaners cupboards, plant rooms

Front 38

Where are all of these defined?

Back 38

The Code of Measuring Practice, 6th Edition, published by the RICS

Front 39

What is the purpose of the Code of Measuring Practice?

Back 39

Provides precise definitions to permit the accurate and consistent measurement of buildings

Front 40

What would you expect the percentage of NIA to GIA / GEA to be?

Back 40

It depends on the type of project being undertaken (school, hospital, office etc…)

If it were an office build I would expect the NIA to GIA to be in the region of 70-85%, where 70% is not good and 85% is excellent.

Front 41

Where do you get cost information from?

Back 41

In house historic data
Benchmarks
BCIS
Building cost models
SPONS and other price books (Laxtons etc)
Sub contractors and suppliers

Front 42

What do you measure in accordance with?

Back 42

NRM2 (was SMM7)

Front 43

What does NRM2 (SMM7) stand for?

Back 43

New Rules of Measurement 2 - Detailed measurement for building works

(Standard Method of Measurement, Edition 7)

Front 44

What does it do?

Back 44

NRM2 has been developed as a set of detailed measurement rules for the preparation of either bills of quantities or Schedules of Rates for either capital or maintenance projects. It does however deal with the quantification of non-measurable work items, contractor designed works and risks.

Front 45

How do you measure steel under SMM7 – and what other items would you measure in association?

Back 45

Under SMM7 steel is measured in Tonnes.

Other items to measure in association with steelwork include framing erection, permanent formwork, cold rolled purlins and cladding rails, isolated structural member, filing hollow sections, surface preparation, surface treatment and localised protective coating. (G)

Front 46

How do you measure brickwork walls under SMM7 – and what other items would you measure in association?

Back 46

Under SMM7 brickwork walls are measured in m2. Other items to measure in association with brickwork include:
Isolated piers,
Isolated casings,
Chimney stacks,
Projections,
Arches,
Brick reinforcement,
Sundry items,
Forming cavity,
Closing cavities

Front 47

When did NRM2 replace SMM7?

Back 47

NRM2 was published in April 2012. It became operative on 1 January 2013 and replaced the Standard Method of Measurement, seventh edition (SMM7) on 1 July 2013. SMM7 should no longer be adopted after July 2013.

Front 48

What is NRM1?

Back 48

NRM1 – Rules for order of cost estimating and elemental cost planning

Published in March 2009 and has been reasonably well received and adopted by the profession. It has since been amended and the second edition was launched by the RICS in 2012

Front 49

What is a Section 106 agreement?

Back 49

They are also referred to as planning obligations
They are typically agreements between local authorities and developers negotiated in the context of granting planning consent

Front 50

What sort of things is the money spent on?

Back 50

Affordable housing

New open space or environmental improvements

New roads and transport capacity

Health and education facilities

Front 51

What is construction to ‘shell and core’?

Back 51

The basic structure, services and envelope of the building AND the fit out of landlord / common areas
E.g. reception, toilets, lifts, cores, base services are terminated at breakout points to floors, life safety services infrastructure

Front 52

What is a CAT A fit out?

Back 52

Also known as a ‘developer’s fit out’
Provides the generic requirements to suit most developers
E.g. life safety elements and basic fittings - suspended ceiling tiles, raised floors, carpet, lighting, power distributed to floor plates

Front 53

What is a CAT B fit out?

Back 53

Overlays the CAT A provision with bespoke elements particular to the needs of the building user to enable the tenant to occupy and use the space
E.g. partitions, power distributed to floor boxes, data cabling, artwork and branding, upgrading CAT A finishes and toilet finishes etc

Front 54

Where could you find the definitions for these?

Back 54

British Council of Offices (BCO) fit out guide

Front 55

What is BWIC?

Back 55

BWIC stands for Builders Work In Connection and is usually set as a percentage of the services cost.
Depending on the size of the job and complexity will determine the percentage of BWIC.
BWIC accounts for any drilling, fixing, cutting etc… that the builders do whilst undertaking the services.
BWIC can be measured in accordance with NRM2 when doing a BOQ’s.

Front 56

What cost would you expect for a new build city centre office tower in London?

What cost would you expect for a CAT A fit out to that office?

What about a CAT B fit out?

Back 56

If you have worked on these types of project, have a range in mind

Front 57

What cost would you expect for a retail shopping centre?

What cost would you expect for a warehouse?

What cost would you expect for a hotel?

What cost would you expect for city centre residential tower?

Back 57

If you have worked on these types of project, have a range in mind