Flashcards in Design Economics and Cost Planning Deck (69)
Where can a QS find guidance on benchmarking?
RICS Practice Standards UK - Cost Analysis and Benchmarking, 1st edition 2011
What is cost analysis?
A full appraisal of costs involved in previously
Aimed mainly at providing reliable information that will assist in accurately estimating cost of future buildings
What may cost analysis be used for?
- Estimating costs for similar buildings
- Estimating costs for similar construction elements
- Comparing the cost of design options at an elemental level
- Cost modelling design solutions
What is benchmarking?
The process of collecting and comparing data internally or externally to identify the 'best in class'
What is an elemental cost plan?
- A critical breakdown of the cost limit of the building into cost targets for each element
- Updated as design progresses, ensures project remains in budget and provides value
- also provides work breakdown structure and cost breakdown structure, useful for packaging up works for procurement later on
- Early elemental cost plans will be total construction cost of project divided into elements by percentages
- Later elemental cost plans will be ‘measured’ based on actual quantities and materials required
What is the purpose of cost planning?
- To ensure the client can afford the project
- To ensure the client is getting value for money
What are the benefits of recording historic cost data?
- Provide an accurate record of the project as constructed
- Creates a means of modelling the projects costs
- Help inform the design development and cost
planning processes of planned, similar projects
- Project cost data can be an indication of construction economy activity which can be used for future projects (if enough data)
What information would you expect to find with a historic cost analysis?
- Contract details
- Description of project
- GIA & NIA
- Contract Sum
- Base date
What is the BCIS?
Building Cost Information Services - Cost and price information is collected by BCIS from across the UK construction industry, then collated, analysed, modelled, interpreted and made available to the industry to facilitate accurate cost planning.
What does standardising the cost analysis format (using NRM e.g. on BCIS) provide?
- Ability to collect and compare data across a large volume of construction projects
- A definition of cost allocation
- Data for trend analysis over time
What are the two key parameters that will influence construction costs?
- The state of the construction economy at the time (date)
Why may construction costs be different for different locations?
- Availability of materials
- Transportation costs
- Availability of local and specialised labour
- Ease of access to site
- Availability of services to site
- Local labour costs
- Proximity to amenities
What parameters does the BCIS offer?
- Build type (new build, refurbishment)
- Building use (school, residential, offices)
- AC/no AC
When is the BCIS base date for TPI?
1985 = 100 all in TPI
2010 = 100 Scotland
Why would you not use TPI/CPI to calculate the inflation of a specific construction cost?
TPI/CPI not specific to a construction cost, they relate to the overall movement.
What are the key steps in benchmarking?
- Data collection
- Data comparison
- Data analysis
Why is benchmarking useful?
Creates targets for similar projects, trying to improve on previous
Aside from total construction cost, what other factors can be benchmarked?
- Cost/net m2
- Cost/gross m2
- CO2 emissions
- Sustainability rating
With regards to confidentiality, what considerations should you make before presenting in house benchmarking data?
- Ask Employer's permission to use the data
- Do not label source of data, e.g. title the costs as "Project A - West London School"
Why is it good to show a range of benchmarks rather than just those closest to the mean?
It is good to show the potential risk
What is the link between cost analysis and benchmarking?
Cost analyses are required for the benchmarking process.
Cost analyses are collected/compared/analysed to reveal the best in class - the benchmark.
What is a feasibility estimate?
A high level exercise to assess whether a project is financially viable and to set an outline budget for the scheme
What is the format of a feasibility / budget estimate?
- A rate per m2 or functional unit
What information do you need to carry out a feasibility estimate?
- Function of building (office, hospital)
- Type of build (new build, refurbishment)
What is the %age error of a feasibility estimate generally?
What in an order of cost estimate?
Stage 0, stage 1.
A means the determination of possible cost of a building(s) early in design stage in relation to the employer’s fundamental requirements. This 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.
What are the principle components of an order of cost estimate?
- Construction costs
- Area schedule
- Basis of estimate (drawings etc)
What is generally excluded from an order of cost estimate?
- Professional fees
- Client direct costs
- Asbestos removal
Why would VAT be excluded?
Different VAT applies to different clients. We wouldn't know unless informed.