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Paper 1114V6-0
Contents
Aims
Learning outcomes
Introduction
Part A: The need for cost control
1. Introduction
2. Controlling the design
3. Cost control activities
Self-Assessment Question 1
Part B: Cost information
1.
2.
3.
4.
5.
6.
Introduction
Cost analysis
Items included in elements
Comparison of analyses
Other sources of cost data
Indices
Self-Assessment Question 2
Introduction
Elemental cost planning
Comparative cost planning
Cost planning in use
Self-Assessment Question 3
Aims
z
To consider the relationship of the design process and cost planning and
control of cost limits.
Learning outcomes
After studying this paper you should be able to:
z
z
z
z
z
Introduction
To be effective, a pre-contract cost control system must operate throughout the whole
design process, from the inception of a project to the tender analysis.
Part A of this paper deals with the overall design process and the relationship of cost
planning to this process. As all estimating relies on cost information, Part B covers
cost analysis, cost data, and cost indices. The cost planning procedure includes setting
or confirming a cost limit in the initial stages of design, and this is also covered in
Part B. Once approval to proceed has been given, a more detailed estimate may be
prepared and this is dealt with in Part C. As the design develops, elemental cost
planning may be introduced, and this is covered in Part D.
1 Introduction
It is vital to keep the total cost of a development within a clients budget and, for this,
efficient control of the design process is a prerequisite.
The need is now possibly greater because:
z
profit margins have become smaller and therefore variations in cost or time can
seriously affect project viability;
clients are becoming both larger and more aware and therefore expect more
from their advisers;
The control mechanism should comprise a cyclical system of initial planning which is
then monitored and reported on. Any adjustments required are made, and the revised
plan continues to be monitored, adjusted and so on. Without the review and
adjustment, there is no control.
For a cost control process to be effective, the quantity surveyor should be involved as
early in the process as possible. The earlier he makes his contribution, the more
effective he can be.
The cost plan needs to be realistic. It should be established early on in the design
process. As the design evolves, each drawing is cost checked and any differences
reported to the client and architect. Changes to the design may mean that changes are
required to the cost plan to bring the project back within budget, or the budget may
need to be increased.
For a cost control process to be effective, the quantity surveyor must ensure that all
parties are aware of design implications early on and action taken collectively so as
not to compromise the clients objectives.
There must be more flexibility in the early stages of design than in the later stages:
fewer firm decisions have been made, and there is more chance of affecting the cost.
Once firm decisions have been made on shape, form etc, fewer sections are left to be
decided and significant variation in costing is less likely.
One of the problems of designing a building is maintaining control over costs while
design decisions are being made. To aid this, cost planning was developed.
The process should achieve a good, balanced design solution, cover all the clients
requirements and be carried out throughout the whole design period.
The architect experiments with various planning solutions, taking into account
the clients requirements, circulation, specialist works and the general cost
information.
The architect completes his study of user requirements for the building, prepares
scheme designs and passes them to the quantity surveyor. It is unlikely that only one
scheme will be drawn out the architect may draw fittings layouts to ensure that the
rooms are of a suitable size. The specialist engineers should provide essential details
(eg boiler room sizes). The architect will probably have decided generally on the type
of frame, walling, roofing etc.
The quantity surveyors work at this stage will depend on the procedure agreed with
the architect. If cost planning has been decided upon, it may be in elemental form,
comparative form, or, as is often the case, a mixture of the two. This is discussed in
depth in Part D.
z
Elemental cost planning. The quantity surveyor prepares an outline plan from
previous analyses at the beginning of the scheme design stage and submits it to
the architect for discussion. After the plan has been checked against the
scheme design drawings, it is put into its final form.
Comparative cost planning. Before the architect settles on the scheme design,
the quantity surveyor makes cost studies of various alternatives that the
architect suggests he might use. The architect then makes a choice and
completes his scheme designs. On receipt of the scheme designs, the quantity
surveyor prepares an elemental cost plan based on his earlier cost studies.
At the end of the scheme design period, the architect prepares his presentation
drawings for the client.
2 Detail design
The architect checks the specialist drawings to see that they fit in with the general
scheme, and prepares his own detail drawings.
Where elemental cost planning is used, the detail design period is a busy time for the
quantity surveyor. As each detail drawing is prepared by the architect, he should send
it straight to the quantity surveyor, who will make a cost check to see that the value of
the elements in the cost plan are not being greatly exceeded (or reduced). If there is a
discrepancy, the quantity surveyor should inform the architect and suggest alternative
solutions that will allow the cost plan to be adhered to. The architect may accept one
of the alternative solutions, provide one of his own, or, with the agreement of the
client, alter the target figure.
When all the design drawings have been prepared and cost checked, the quantity
surveyor should make a final cost review and submit a report to the architect and
client.
The relationship between the plan of work and the cost planning process is shown in
Figure 1.
The process of value management is also a pre-contract cost control procedure, but
space in this paper is limited and a separate paper is included if your module requires
you to have a knowledge of the procedure.
SELF-ASSESSMENT QUESTION 1
What is the purpose of pre-contract cost control?
Answers to SAQs are to be found at the end of the paper.
Establish Cost
Cost
Cost limit studies
studies
Feasibility
report
Design
stages
Inception
Techniques Preliminary
used
estimate:
unit, cube,
superficial
Prepare Prepare
cost plan cost checks
based on
final
sketch
design
Detail
design
Elemental
estimating
Approximate
quantities
Prepare
cost
analysis
Bid
Evaluation
Working Bill of
Tender
drawings quantities stage
Elemental
cost
analysis
of tender
Cost
Prepare
reporting/ final
cash flow account
forecasts
Bring
records
up to
date
1 Introduction
The basis of any cost control system is a suitable library of cost information,
including cost analyses and other sources of cost information, all suitably classified to
allow easy access.
When preparing a cost plan it is important to understand how the cost information it
is based on has been collected and why you might want to adjust the information.
2 Cost analysis
A cost analysis is a systematic breakdown of cost data to facilitate examination.
The method used for building works is generally to:
z
Analyse the cost of the project in terms of functional elements (eg foundations,
external walls, roof etc) by reference to the priced bill of quantities. Many bills
of quantities are originally prepared in trade order and the costs need to be
broken down and reassembled into an elemental order.
Break down the total cost of each element and express it as a cost per square
metre of gross internal floor area. The gross floor area is the total area within
the internal structural face of the enclosing walls.
Where a bill of quantities is not available, the contract sum analysis may be further
analysed to provide basic cost data. It may not be possible to make a full analysis
following the Building Cost Information Service (BCIS) guidelines (given later in
this paper).
The gross floor area is used as a yardstick because:
z
The total cost of each element divided by the floor area is called the elemental cost
per square metre.
The quantity of each element (eg the surface area of windows) in square metres is
also usually given in the analysis where practical and this is called the quantity
factor for the element (sometimes also known as the elemental unit quantity or
EUQ).
The total cost of the element divided by the quantity factor is called the elemental
unit cost. Take care not to confuse this with the elemental cost per square metre.
In addition to the purely mathematical data, other information that might affect costs
should be recorded in the analysis. Examples include:
z
A set of plans and elevations, together with suitable photographs, would help in using
the analyses.
In general, items should be included in the same element every time, but because of
the large variations in building types and construction this is not always possible.
Where items are included in elements which are different from the normal, state this
fact in a note against both the element in which they are included, and the element in
which they are normally included. For example, windows in curtain walling are
included in the external walls element, so this should be stated in this element and a
note made against the window and external door element that these are included in
external walls.
In every cost analysis, list all the elements so that the element numbers remain the
same for reference and comparison purposes. Where there is no cost attributable to
the element, write nil against the element in the cost column.
Unusual or difficult items (eg canopies) should be included with the most appropriate
item. Where they are of significant cost importance, give details.
Detached or mainly detached chimney stacks should be included in heat source
element. Stacks attached to the structure should be included with the most appropriate
element (eg external walls, internal walls or partitions).
The cost of tank rooms will normally be divided between the various elements
(external walls, roof etc) and tank casings will be added into the builders work in
connection element.
Decorations should be allocated to the appropriate element. Decoration on fair-faced
work should be included in the appropriate finishings.
Analyses are generally based on the tender figures. Cost data can be obtained quite
easily from priced bills of quantities. The time lag between receipt of tenders and
preparation of an analysis should be short so that the information obtained is as up to
date as possible.
Modification notes may be added to an in-house analysis when the final account has
been prepared. These may include details of large cost variations caused by remeasurement or adjustment of prime cost and provisional sums.
A concise cost analysis is used when cost planning at feasibility stage. As few design
features would be known at this stage, it is not necessary to break the costs down into
detailed elements. An example is included in the Appendix at the end of this paper.
As the design develops, it is important to choose a detailed cost analysis that closely
relates to the proposed project, and as much information as possible is required so
that an informed decision on cost allocation can be made. This detailed cost analysis
enables the quantity surveyor to make adjustments for factors which will affect the
cost of the proposed elements more accurately.
The following section gives detailed guidance on how to prepare an analysis. You
will not be assessed on the preparation procedure. It is purely to demonstrate how the
figures are established. You will be assessed on sections 4 onwards.
Transfer the figures obtained to a separate sheet see Figure 2 for a typical
layout. The total floor area of the building is obtained from the drawing (or
from the description in the bill of quantities). The total cost and the totals of
each element are divided by the floor area in square metres. The elemental
costs so obtained are also entered on the sheet. The element unit quantities are
totalled and written on the summary sheet. The element unit rate can then be
calculated.
Number and
name of
element
included in
this column
Date of tender
.............................
Total cost of
element
Cost of
element per
m of gross
floor area
Element unit
quantity
Total cost of
each element
and also the
cost of the
group elements
Cost per m of
each element
and for the
group
elements
Quantity
factors included
here where
appropriate
Element unit
rate
Column A
figure
divided by
Column C
figure
D
Total
cost of
element
Cost of
element
per m of
gross
floor
area
Element
unit
quantity
Element
unit rate
SPECIFICATION
Main specification
information
including areas,
numbers, costs etc
of some of the all-in
unit rates
total cost of item
ie
area
Each element in the amplified analysis should have a brief specification covering the
design criteria. This information may be obtained from the bills of quantities, though
in some cases reference to the drawings may also be necessary (eg details of the
frame). In some cases the cost of the element should be broken down into subelements.
Each analysis should have a front sheet containing the following details:
1. Reference numbers.
2. Description of type of building (eg hospital).
3. Name of client and architect. (Engineers and contractor are also sometimes
included, and quantity surveyor if the analysis is for other than personal office
use.)
4. Name and address of project.
5. General description of the works. This should be similar to that included in the
bill of quantities and should include number of storeys, and details of items of
construction likely to have a major effect on cost. The main items included in
the external works should be stated.
State also whether any normal items are omitted (eg foundations included in a
separate contract) and whether the access, topography or geology of the site is
abnormal.
6. Total gross floor area, measured to the internal surfaces of external walls, and
over internal partitions, internal structural walls and stair wells. Area of opensided verandahs etc should be given separately and not be used for calculating
cost per square metre of floor area. However, verandahs incorporating screen
walls, proper floor finishes etc, providing almost normal accommodation,
should be included in the measurement of floor area.
7. Details of area etc. Give a breakdown of the gross area into basement, ground
and other floors, with approximate lengths and widths where appropriate. Also
give storey height and/or the heights of various parts of the building. The total
area should be broken down into usable, circulation, ancillary and internal
division areas. The ratio of usable space to other sundry spaces gives an
indication of planning efficiency.
As a further guide to planning efficiency of two similar-sized buildings, the
wall to floor ratio (described below) may be included. The internal cubic
capacity may also be given. This is the gross internal floor area of each floor
multiplied by its storey height. Note that the method of calculating the cube for
this purpose is different from that used for estimating purposes.
8. Approximate percentage of the building that is single-storey, two-storey, threestorey etc. Plant, tank and similar rooms above the main roof should be
ignored for this purpose. The different storey heights should be stated
separately with details of where each occurs. The storey height of single-storey
buildings and of top floors of multi-storey buildings is measured from floor
finish to underside of ceiling finish; in other cases it is floor finish to floor
finish.
9. Type of contract and contract period; whether open or negotiated tender; and
whether firm price or fluctuating. Details may be given here of the number of
tenderers, the spread of tenderers and approximately how far below the next
tender the accepted one was. This information is useful for spotting freak
tenders.
The total cost of items such as foreman will increase with the length of
contract.
Short contracts carried out in the winter months may involve extra costs due to
the weather conditions.
Permissible
soil loading
Nature of
soil
Depth of
bearing
strata
Depth of
water table
Site levels
2.1 Frame
A note should be
given of the grid
pattern and column
centres in both
directions
The total floor area
in each height of
frame, together
with design loads
and storey heights,
should preferably
be stated
separately in the
breakdown
Area of
lowest
floor
level(s)
in m
Total
floor area
contained
in each
height
and type
of frame
m
40.00 kN/m
Soft clay with
patches of sulphate
bearing soil
Indeterminate
(foundations
designed on partial
friction and partial
bearing basis)
No water table
apparent
Gradient 1 in 20
Number
of storeys
Column
spacing
Design
loads
Roof
Floors
Total floor
area
Storey
heights
Element
unit
quantity
Two
Single
3.000 m 3.000 m
17.00 m 7.000 m
720.00
N/m
720.00
N/m
3.00 kN/m
7500 m
650 m
4.000 m
(Floor
level
to eaves)
7.050 m
(Floor
level
to ridge)
3.000 m
(Ground
floor)
First floor
2.800 m
(Floor to
ceiling)
Element and
design criteria
Element
unit
quantity
2.3 Roof
Design loads and
spans should be
stated.
The angle of pitch
should be stated
for sloping roofs
Roof structure
Roof coverings
Roof drainage
Roof lights
Total
floor
area of
upper
floors
m
Element and
design criteria
Element
unit
quantity
Element and
design criteria
Element
unit
quantity
Total
area of
windows
Windows in m In the breakdown the costs, areas and
Gross floor area in and unit rates for different types of external
windows (eg wood and
doors m
m
aluminium) should be given
=_____________ separately
External doors in This element should be broken
down into two sub-elements.
m
Gross floor area in
2.6.1 Windows
m
2.6.2 External doors
=_____________
Doors
Fanlights and sidelights
Frames and thresholds, linings,
architraves etc
Ironmongery
Glazing and panel infilling
Cramps and dowels
Lintels and cavity dpcs
Thresholds
Work to reveals of opening
The area of
opening lights to
windows should be
stated.
Element and
design criteria
2.8 Internal
doors
Element
unit
quantity
Total
area of
wall
finish m
Plaster
Backings for tiling etc
Wall tiling, mosaic
Panelling
Insulation forming a wall finish
Non-structural column casings
where not required for protective
purposes
Battening out
Picture and dado rails
Total
Finishings
3.2 Floor finishes Includes all preparatory work,
beds and finishes to floor surfaces. area of Screeds
floor
Skirtings
In the breakdown the costs, areas finish m
and unit rates for the main types of
finish should be given separately.
The finishes to staircases are NOT
included in the element and should
be allowed for in Stairs element.
Structural screeds and boarding to
timber framed floors are NOT
included in this element and
should be allowed for in Upper
floors or Substructure as
appropriate.
Element and
design criteria
3.3 Ceiling
finishes
Element
unit
quantity
Total
area of
ceiling
finish m
Element and
design criteria
Element
unit
quantity
5.2 Services
equipment
Kitchen equipment
Laundry equipment
Hospital and dental equipment
5.3 Disposal
installation
Number of sanitary
appliances served
and special
equipment should
be stated.
Element and
design criteria
Element
unit
quantity
Designed
heat
loading
for
system
kw
Boilers
Controls
Fans
Calorifiers
Independent chimney stacks and
linings
Fuel conveyors
Header tanks and the cold water
supply in connection
Fuel tanks
Pumps
Valves
Insulation to boilers etc
Element and
design criteria
5.6 Space
heating and air
treatment
Area of
compartments
treated in m
Gross floor area in The element should be broken
down or allocated to one or more
m
of the nine sub-elements in
=_____________ column four.
Element
unit
quantity
Cube of
treated
space
calculated
as
follows:
Gross
internal
floor area
of section
of
building
treated
multiplied
by its
storey
height
(floor
finish to
floor
finish or,
in the
case of
singlestorey
buildings
and top
floors of
multistorey
buildings,
floor
finish to
ceiling
finish) m
5.7 Ventilating
system
Area of
compartments
treated in m
Gross floor area in
m
=_____________
Details of the
method and extent
of the systems
should be stated
Cube of
treated
space
calculated
as
described
in
element
5.6 m
Non-structural ducts
Isolated fans
Dust and fume extraction
Canopies
Rotating ventilators
Controls
Element and
design criteria
Element
unit
quantity
5.9 Gas
installation
The number of
outlets should be
stated
5.10 Lift and
conveyor
installations
The number of
rush period
passengers for
which the lifts
have been
designed should be
stated.
The number,
capacity, speed,
number of stops,
number of doors
and height served
by lifts should be
given.
The capacity of
joists should be
given in
kilogrammes.
The rise and travel
of escalators
should be stated.
Element and
design criteria
Element
unit
quantity
5.12
Communications
installations
5.13 Special
installations
5.14 Builders
work in
connection with
services
5.15 Builders
profit and
attendance on
services
Element and
design criteria
6.1 Site works
Site preparation
Surface treatment
Site enclosure and division
Fittings and furniture
Element
unit
quantity
The
overall
element
cost
should
be given
as a cost
per m
of gross
floor
area.
Roads
Paths
Car parks
Playing fields
Playgrounds
The unit Retaining walls
quantity Land drainage
for sub- Landscaping
element
6.1.1 is 6.1.3 Site enclosure and division
m. For
subGates
element Fencing
6.1.2 is Walls
m. For Hedges
subelement 6.1.4 Fittings and furniture
6.1.3 is
m. For
Noticeboards
subFlag poles
element Seats
6.1.4 is
number
6.2 Drainage
Gullies
Manholes
Drainpipes to soil and surface
water drainage
Sewage treatment plants
6.3 External
services
Element and
design criteria
6.4 Minor
building work
Preliminaries
. . . . . . . . % of
remainder of
contract sum (less
contingencies)
Element
unit
quantity
The unit
quantity
for subelement
6.4.1 is
the gross
floor
area of
the
ancillary
buildings
m
4 Comparison of analyses
Analyses vary considerably for similar types and sizes of buildings, and a careful
study is necessary before one is used for cost planning purposes. Table 2 shows
figures for two different analyses which could apply to office blocks built at the same
time in the same locality, with comments on why the two sets of figures vary. Figure
4 shows an example of amplified analysis.
TABLE 1 Information to be included in an amplified analysis
Type of building
Office block
Element
number
Element
Date of tender
May 1986
COMMENTS
Building A
Building B
1.0
Substructure
37.28
56.85
2.1
Frame
48.46
78.29
2.2
Upper floors
34.48
41.00
2.3
Roof
46.60
27.96
2.4
Stairs
8.39
15.84
2.5
External walls
42.87
66.17
218.08
286.11
Element
number
2.6
Element
Windows and
external doors
Element cost
Building A Building B
b/fwd
218.08
b/fwd
286.11
25.16
52.66
COMMENTS
2.7
Internal walls
14.91
38.68
2.8
Internal doors
7.46
20.97
3.1
Wall finishes
5.59
31.22
3.2
Floor finishes
22.37
32.62
293.57
462.32
Element
number
3.3
Element
Ceiling finishes
Element cost
Building A Building B
b/fwd
293.57
b/fwd
462.26
19.57
39.14
COMMENTS
4.1
Fittings and
furnishings
9.32
49.86
5.1
Sanitary
appliances
2.80
3.73
5.2
Services
equipment
Nil
Nil
5.3
Disposal
installations
4.66
5.13
5.4
Water
installations
9.32
10.25
5.5
Heat source
10.25
Nil
5.6
Space heating
and air treatment
28.89
17.24
5.7
Ventilating
system
Nil
Nil
5.8
Electric
installation
27.03
50.33
5.9
Gas installation
Nil
0.93
405.41
638.87
Element
number
Element
Element cost
Building A Building B
b/fwd
405.41
b/fwd
638.87
5.10
Lift and
conveyor
installations
27.03
31.69
5.11
Protective
installations
1.40
1.40
5.12
Communication
installation
Nil
1.40
5.13
Special
installations
Nil
Nil
5.14
Builders work
in connection
with services
7.92
13.98
5.15
Builders profit
and attendance
on services
1.40
6.99
443.16
694.33
COMMENTS
6.1
Site works
18.64
46.60
6.2
Drainage
6.52
10.25
6.3
External
services
1.40
2.33
6.4
Minor building
works
Nil
5.13
Preliminaries
46.60
59.65
516.32
818.29
Contingencies
13.98
20.04
530.30
838.33
You can see from the above example that indiscriminate use of figures taken from a cost
analysis can result in an incorrect cost plan being prepared.
D=
A
C
Total
Cost of Element Element
cost of element
unit
unit rate
element per m of quantity
gross
floor
area
7 259
12.65
218 m
33.30
218 m
574 m
= 0.380
Preliminaries 7.52% of remainder of
contract sum
Specification
4 473
7.79
28 m
6 496
11.32
666 m
938
2 226
3 290
210
595
Application
Preliminary budgets and cost limit estimates.
* Prices vary considerably between publication and you should use the figures only after careful study
and comparison with prices in bills of quantities for work in your area.
Publishers of measured rates may be using average prices and the method used
to obtain the average may be statistically suspect.
The items included in the elements may not be the same in each case, due to:
{
Variations in cost data do not invalidate its use, but the user must be capable of
interpreting cost information in its context and adjusting it correctly in order to re-use
it. A few well chosen examples of data about which the surveyor has personal
knowledge of the circumstances surrounding the pricing of the jobs is often better
than indiscriminate use of averages based on sources whose backgrounds are little
known.
A great deal of handling and systematic recording of cost data is required to enable
the quantity surveyor to know what are reliable figures. In order to derive reliable
cost information from as many sources as possible, standardisation of the elements
into which building costs are analysed is desirable. The RICS Building Cost
Information Service (BCIS) list of elements is now the most widely accepted.
Interpretation of cost data is partly a matter of opinion and not completely
mathematically accurate. The analytical approach to the detail does provide an
explanation for some variations and reduces to a minimum the chance and size of
differences that may appear to exist in the initial investigation of the cost data.
It has been suggested that bills of quantities should be divided in a different way from
the traditional trade sections. Some bills have been prepared in elemental form, others
in operational or locational form, but in practice the disadvantages of the increased
number of items and the difficulties involved in pricing have outweighed the
advantages claimed. With the use of computers it is possible to procure several
layouts for bills with very little extra effort, so that the ordinary trade bill can be
produced for tendering purposes. The computer can then be supplied with details of
pricing and a priced elemental bill can be produced for analysis purposes.
Normal trade literature and price lists, referenced using some systematic
scheme with an adequate index and cross-referencing system.
Analyses of all office tenders with priced bills of quantities and classified in
accordance with the CI/SfB code for building types.
Because of the complexity of the building industry and the amount of literature
being produced, most architects and surveyors use the CI/SfB system which
provides for a large number of sections. Table O: Built environment gives
suitable classifications for buildings:
1. Civil Engineering Works
2. Transport, Industrial Buildings
3. Administrative, Commercial Buildings
4. Health and Welfare Buildings
5. Refreshment, Entertainment, Recreational Buildings
6. Religious Buildings
7. Educational, Cultural, Scientific Buildings
8. Residential Buildings
Only the main headings are given above. For further details you could refer to
the Construction Indexing Manual published by the RIBA.
z
Data contained in the literature sent out to subscribers to the Building Cost
Information Service of the RICS. Before submitting cost details, quantity
surveyors should get permission from the contractor, the building owner
and the architect. The information provided includes:
{
Publications digest.
6 Indices
Cost data is historical data. When we use this data to prepare an estimate or cost plan,
we need a means of updating it. Indices are a way of comparing changes in building
costs and tender prices over time.
A building cost index charts movements in the underlying costs of building by
tracking changes in the price of key inputs to the process, such as material costs,
labour costs and plant hire rates. Generally a standard mix of resources is used to
reflect the balance of costs of a typical project of a given type.
Building cost indices are compiled by official bodies using a model that takes data on
material prices supplied by the Department of Employment. Specialist organisations,
such as the National Association of Lift Manufacturers, also publish cost indices for
the more specialised aspects of construction for which a general building cost index
would be inappropriate. If the weighting of the model is incorrect, the index will be
distorted.
A contractor is more likely to use this index when trying to predict future costs. By
looking at past trends, the possible future movement in costs can be assessed. The
structure of an input index model is shown in Figure 5.
A tender price index charts the movement of tender prices. It includes market factors
as well as the resource costs used in the building cost index. Tender price indices may
therefore be used to compare the costs of buildings for which tenders were obtained at
different dates, or to adjust analyses of past tenders to current prices. Future trends in
price levels may be forecast by a study of the indices, taking into account any current
wage price negotiations, any foreseeable changes in unemployment in the
construction or other industry, and other political and economic factors likely to react
on the building industry. It is therefore used in the cost planning process.
The BCIS provides a series of indices to subscribers giving details of changes in
various types of tenders. Indices are provided for four different classes of buildings
(eg load-bearing brick, steel-framed). Other indices assess the effect of changes in
market conditions (based on local authority housing) and the adjustment on tenders
for fluctuation risks.
FIGURE 5 Input index model
A separate set of indices assesses changes in tender prices for different sections or
elements (services, external works etc) of the structure.
The BCIS also provides information on particular circumstances and local trends in
regions throughout the country.
Indices may be given in the form of a table. A particular year is given as a cost base
of 100. Any increase or decrease in cost is calculated as a percentage of the base year
and the percentage figure is added to or deducted from 100 (Figure 6).
FIGURE 6 Index in table form
Base year
First quarter
Second quarter
Third quarter
Fourth quarter
1999
2000
2001
2002
323
325
334
346
345
353
362
375
375
383
388
392
398
405
423
421
The same figures may be plotted on a graph, the years generally being plotted
horizontally and the index figures vertically (Figure 7).
FIGURE 7 Index in graph form
Indices may be used to bring a tender figure for a previous job up to current prices so
that it can be used for comparison or for cost planning purposes see Example 1.
EXAMPLE 1
A firm price contract had a tender figure of 1,700,000. The general index for the date of
tender was 320. The estimate for which the figures are required is for a fixed price
contract. Market conditions in the two cases are assessed to be similar.
Calculate the revised current figure for original contract work.
The new contract will not have a fluctuations clause, so the general index, 335, may
need to be increased to cover the contract period say 340.
Adjustment to tender price 170,000
340
= 1,806,250
320
1 Introduction
Preliminary estimates are prepared before the bill of quantities is available. Where no
bill is being prepared, they are the estimates arrived at before the contract or tender
figure is obtained.
Preliminary estimates are an attempt to forecast a reasonable cost for a project. They
are prepared so that the client is aware of his commitments as near the inception of
the project as possible. They also enable the architect to decide whether his design is
a reasonable one having regard to the amount of money available.
Remember that the degree of accuracy of the estimate will reflect the extent of the
information available. Nevertheless, estimates should be calculated as accurately as
the information available and the skill of the surveyor will allow. Do not over-inflate
estimates, as the clients decision whether to carry on with or abandon the project
may depend on the estimated figure. A low first estimate (perhaps due to lack of
information) is also undesirable, as it is likely that the figure the client remembers
best will be the one he hears first.
When preparing the estimate, the following should be included:
z
Mention of any special items that are excluded (shop fitting, special joinery
fittings, demolition etc). Failure to inform an architect or client of items
excluded may at best cause problems later, and at worst give rise to allegations
of professional negligence.
The assumed tender date, so that confusion will not arise if several revisions
are made.
The amount allowed for price fluctuations between the estimate and tender
date should be clearly indicated.
Surveyors should not be influenced by what the architect or the client thinks the job
should cost. The quantity surveyor is the building cost expert, and he should base his
figures on the information he is given about the project and on his experience of past
jobs. The estimate given to a client or architect should only be amended with good
reason and not just to please the architect. If the original estimate figure was right,
within reasonable limits, then any alteration is likely to cause friction later.
2 Methods of estimating
The main methods used for estimating are:
1
Unit
Superficial
Approximate quantities.
A project such as a new multi-storey car park. If the quantity surveyor knows
from published data or (preferably) from previous experience that the cost of
providing space for one car varies from 3000 to 3500, he can work out an
approximate figure by multiplying, say, 3250 by the number of cars. At this
early stage it may be better to give a range of costs from 3150 to 3450
with an idea of the quality likely to be obtained at different points within the
range.
Because of the wide range of costs per unit and the small number of units to be
multiplied, this method of estimating requires a lot of skill to obtain an accurate
figure. It is easy to calculate once the unit cost has been decided, but it is not a very
reliable method for accurate estimating and should only be used in the early stages of
a project or where budgets are being prepared by an organisation to calculate future
expenditure.
External works and abnormal items (eg piling) are normally allowed for separately as
lump sums which are added to the normal superficial price calculation.
External works are generally priced by measuring approximate quantities, as
explained in a later section.
Specialist lump sums may be arrived at from quotations or estimates obtained from
specialists as in the case of piling, or they may be based on information obtained from
previous projects.
The superficial method is sufficiently accurate at this stage, as most of the items are
related more to floor area than to volume. The floor area is easy for most clients to
understand, and in many cases the architects brief will tell him that certain
equipment is to be installed which will require a given floor space. The use of this
method is therefore a help to both the client and the architect during the design
period.
The area for this method is relatively easy to calculate, but it does require skill in
assessing a price rate. Particular care is necessary when comparing similar types of
building with widely differing storey heights.
This method has two main disadvantages: it does not directly take account of
changes either in shape or in the overall height of the building.
In Figure 8, Buildings P and Q have the same superficial plan area, but, due to the
extra external walling (shown by a double line) and the increased difficulty in setting
out, it is likely that building P will be more expensive than building Q. Several other
items are likely to be affected by the cost, some of which (eg span of roof) may offset
some of the extras.
Where buildings are of similar areas but varying total heights, the additional cost of
hoisting men and materials should be considered when comparing their superficial
price rates.
FIGURE 8
EXAMPLE 2
The plans following represent the external walls of an old persons home for which an
estimate is required. From similar projects, it has been calculated that the price per square
metre to be used in the estimate is 500. Calculate the cost using the superficial method.
400.00
140.00
120.00
= 400.00
= 140.00
=
70.00
Area of first floor
Total area
660.00 m
610.00 m
1 270.00 m
The costs shown in the chosen analyses are then adjusted to form the basis of a
new cost plan.
The requirements of the new project are carefully compared with those of the
analyses. Any variations due to changes in quantity or quality are carefully
priced and a list of the major components (elements) together with the adjusted
costs is made and totalled. This will include allowances for preliminaries and
contingencies.
To this total must be added a sum to allow for price changes which it is
anticipated will occur between the date of preparing the estimate and the date
on which tenders are received.
The costs shown on the analyses are then adjusted to take into account any
changes in the price of materials or labour, or any changes in economic
conditions, up to the date at which the estimate is being produced. This
adjustment is usually made by means of a building price index, which may
consist of a graph or a table of figures and represents general price variations
compared with a given base year. The complete process is shown in
Example 3.
Once the initial cost plan has been prepared, it can be used as a cost control
tool during the design development phase. As more information becomes
available, elemental unit quantities and elemental unit costs may be substituted
for the elemental costs per square metre.
Later, the developing design for each element is costed using the approximate
quantities techniques (see 2.4 below) and the costs generated are incorporated
into the elemental cost plan. This forms a continuously updated cost model of
the developing design.
Summary
7500 m
Open firm price tenders, JCT 98 with quantities
(private)
February 2000
February 2000
February 2001
1 917 350
30 000
Tender date:
Work began:
Work finished:
Contract sum:
Contingencies:
Cost analysis
Based on tender. (Preliminaries shown separately.)
Note: The specification notes and quantity factors have been omitted from this example
for simplicity, though they are essential in practice for calculation purposes.
Element
1.0 Substructure
2.0 Superstructure
2.1 Frame
2.2 Upper floor
2.3 Roof
2.4 Stairs
2.5 External walls
2.6 Windows and external doors
2.7 Internal walls and partitions
2.8 Internal doors
Group element total
3.0 Internal finishes
3.1 Wall finishes
3.2 Floor finishes
3.3 Ceiling finishes
Group element total
4.0 Fittings and furnishings
28.65
28.65
31.00
Nil
43.60
Nil
21.00
7.30
0.35
0.30
103.55
3.75
9.90
4.35
18.00
Nil
Nil
(Continued)
5.0 Services
5.1 Sanitary appliances
5.2 Services equipment
5.3 Disposal installations
5.4 Water installations
5.5 Heat source
5.6 Space heating and air treatment
5.7 Ventilating system
5.8 Electrical installations
5.9 Gas installations
5.10 Lift and conveyor installations
5.11 Protective installations
5.12 Communication installations
5.13 Special installations
5.14 Builders work in connection with services
5.15 Builders profit and attendance on services
Group element total
Subtotal excluding external works, preliminaries
and contingencies
6.0 External works
6.1 Site works
6.2 Drainage
6.3 External services
6.4 Minor building works
Group element total
Preliminaries
Total (less contingencies)
1.50
Nil
0.60
3.90
Nil
25.50
Nil
21.55
Nil
Nil
Nil
Nil
Nil
1.50
0.70
55.25
205.45
24.00
5.80
0.35
2.85
13.20
33.00
13.20
251.65
300
270
indices
(proposed
existing indices )
updated
300
= 31.83
1.0 Substructure
28.65
270
2.0 Superstructure
103.55
= 115.05
3.0 Internal finishes
18.00
= 20.00
4.0 Fittings and furnishings
=
5.0 Services
55.25
= 61.39
6.0 External works
33.00
= 33.67
Preliminaries
13.20
= 14.67
276.61 (excluding contingencies)
Note: all the elements would normally be used and adjusted and not just the group
elements.
(Continued)
Cost per
m
1.0 Substructure
Slight increase due to smaller building resulting in greater perimeter
per m of floor. Increase due to larger bases for higher building but
partly offset by shorter spans. Increase due to additional foundations
for office partitions. Soil assumed similar to that on analysis site.
35.50
125.00
2.0 Superstructure
Increase in frame and walls due to height. Slight increase in walls due
to greater perimeter per m of floor. Increase in partitions and doors
due to offices.
3.0 Internal finishes
Additional and more expensive finishes to offices
26.70
5.00
5.0 Services
Additional fittings and supplies for toilets etc. Some increase in heating
due to increased factory height and higher temperatures required in
offices. Sprinkler system and builders work etc to be included.
80.00
272.20
10.66
Preliminaries
Additional storage sheds may be required, contract period likely to be
similar due to work in office area increase cost per m slightly as total
area is less.
Contingencies
No additional problems expected.
Estimated cost of building 6000 272.20
Estimated cost of external works
Preliminaries
Contingencies
16.00
4.00
=
=
=
=
1 633 200
80 000
96 000
24 000
1 833 200
45 830
366 640
2 245 670
2 250 000
Depending upon the type of building and the purpose of the estimate, the degree of
accuracy required and the method of measurement will vary. For example, windows
may be measured and priced as extra over the cost of the wall in early estimates, but
may be later measured in greater detail as more information becomes available.
Elemental unit rates obtained from analyses may be used to prepare approximate
quantity estimates in some cases.
The approximate quantities method is a more accurate estimating method, but it does
require more detailed information than the superficial method. Depending upon the
experience of the surveyor, measurement can be carried out fairly rapidly but more
calculations are needed than in any of the other methods. Initially the composite
pricing rates will require care and take time to build up. However, surveyors who use
these prices at frequent intervals will have all the basic data and generally need only
to make small updating adjustments each time. Complete recalculations will be
necessary only at fairly rare intervals.
All the data available (eg floor areas) with other types of estimating methods can
easily be obtained when this method is used.
For this form of estimating special paper is printed with dimension columns on the
left and the usual bill pricing columns on the right.
EXAMPLE 4 Lodge to factory
Using approximate quantities, work out the estimate for the building shown in the
drawings. The building is a lodge to a large factory and is to be constructed at the same
time as the main building. No external works are to be included in the estimate.
Note: The rates used in this example are not necessarily current rates applying in any
particular district. You should check on the rates for items obtained in current bills of
quantities or price books.
(Continued)
EXAMPLE 4
Lodge to factory
Drawing No ......................
Date ...............
Quantity Rate
5.00
3.00
15.00
15 m
25.65 384.75
17 m
37.10 630.70
0.80
2.75
8.25
2.40
2.45
5.65
22.30
2/5.00
2/3.00
4/270 mm
say
B
17.00
17.00
3.35
25.65
Foundation
=
10.00
=
6.00
16.00
=
1.08
17.08
17.00
Sundry labours
levelling, p & s etc
1.60
1.50
6.00
21.00
4.50
0.75
35.36
1.74
37.10
1015.45
17.00
2.60 44.20 270 Brick cavity wall faced externally
(200.00 per thousand) and plaster and
emulsion internally.
Build up
1 m 110 wall in commons
1 m 110 wall in facings
1 m cavity
1 m plaster
1 m emulsion
Sundry labours 2%
Cost per m
Contd
1015.45
44 m
40.08 1763.52
33.60
4.00
1.50
39.10
0.98
40.08
3 No 137.55 412.65
Build up
1 No window
123.00
2 m glass
11.50
4 m painting
16.88
1.8 m concrete sill
12.00
1.8 m quarry tile sill
4.00
4.4 m plaster and emulsion to reveal
9.50
2.4 m facing to reveal and closing
cavity
5.52
2 m lintel and cavity gutter
30.00
212.40
5.31
Sundry labours arrises ends etc 2%
Cost per window
217.71
Less 2 m cavity wall
80.16
Extra over cost of wall
137.55
3191.62
3191.62
Contd
A
1 No 102.96
102.96
66.50
13.60
2.00
8.50
30.80
15.00
10.80
9.20
10.50
4.50
3.00
174.40
8.72
183.12
80.16
102.96
4.00
6.00
24 m
42.80 1027.20
21.51
11.00
6.50
1.75
40.76
2.04
42.80
4321.78
4321.78
Contd
A
20 m
9.08
181.60
2.75
0.80
3.23
0.77
8.25
1 No 120.04
120.04
87.00
5.23
4.00
1.40
7.50
4.00
109.13
Electrical
Build up
2 No lighting pts
2 No power pts
1 No water heater
216.20
66.00
72.00
50.00
188.00
Telephone
60.00
Preliminaries
300.00
Contingencies
150.00
Estimate for building
5349.62
say
5350.00
External works including water main, electric supply, paving drainage etc measured
separately.
Note: No allowance is made in this estimate for price variation between date of estimate and
date of tender.
Estimated cost per m
5350
= 356.67
15
3 Pre-contract estimating
The unit and superficial methods of estimating are known as single rate methods
because, with a few exceptions (eg specialist works), only one price rate is used in the
calculations. With these methods it is difficult to relate changes in construction or
changes in specification directly to price rate changes.
Buildings are subject to the principle of disproportionate change. If the linear
dimensions of a cube (eg height and length of the external walls) are doubled, the
enclosing surface is increased fourfold and the volume eightfold. Building costs do
not vary commensurately with any of these changes, so the value of expressing costs
in terms of any of these units is limited.
The unit method is really only suitable for budget purposes.
In practical terms, the square metre superficial method is the best of the single price
methods, as it is quick, can be used as a basis for a future cost plan, and is most
closely related to user floor space requirements.
It has been suggested that the elemental method has the advantage over
approximate quantities in that cost data can be obtained from a much wider field
there is a lot of published information and the cost of elements in one building (eg the
frame of an office building) may be compared with those of another type (eg the
frame of a block of flats). Unfortunately, many factors affect the pricing of bills of
quantities. A comparison of elements in different analyses shows that there is often a
difference in elemental rates which is due far more to varying characteristics in
pricing between firms than to changes in design or specification. A very careful study
of the figures is necessary, and many of the published analyses do not give sufficient
information to make a detailed study possible. Where details are given, it may take
more time to make adjustments between the analysis and the details of the proposed
building for which the estimate is being prepared than to measure approximate
quantities.
As you become aware of the factors affecting the cost of various elements, your
facility for comparison will improve; but skill will always be required to make price
adjustments when preparing an elemental estimate.
All forms of estimating require considerable skill. Applying results from previous
jobs without due discrimination can be very dangerous. The ideal system would
provide a method of compiling reliable estimates quickly so that accurate advice
could be given on the general economics of a scheme.
The use of the terms approximate and rough when used to describe estimates are
rather misleading. Remember the client is likely to retain the first figure he is given,
so this should be as accurate as skill and the information available will allow.
SELF-ASSESSMENT QUESTION 3
When would it be more appropriate to use the approximate estimate method instead of the
elemental method when preparing an early estimate?
1 Introduction
Cost planning is a method of providing cost data that will help the architect in making
design decisions. The system used should provide the information in a form which is
easily understood by all the design team architect, consulting engineers, quantity
surveyors and contractors and also by the client.
In the past there has been a gap in cost information between the time of the
preliminary estimate and the receipt of the tenders. It was in an attempt to bridge this
gap that cost planning was developed.
Most clients, if not all, have a cost limit for the work they require. This limit may be
fixed by:
z
z
z
z
The client may inform the architect of his requirements and the design team then
estimates the cost of a suitable design which meets the clients needs. This then
becomes the cost limit.
The cost limit must be a realistic figure for the work proposed, otherwise cost
planning cannot be properly carried out. The architect must also be determined to
produce a design within the cost limit, which means that restraint will be necessary in
some cases.
If you have not read Parts A, B and C of the paper, go back and read them now,
as they will help you understand the cost information used to prepare your cost
plan.
The money spent on a project should be rationally distributed so that large sums of
money are not spent on one part of a building to the detriment of other essential parts.
For example, normally it would be wrong to spend large sums on floor finishes if
insufficient money was left to provide a watertight roof covering.
The information provided in the cost plan must be in a form which:
z
z
z
2. A comparative cost plan sets out the estimated costs of individual sections of
work and, where appropriate, the estimated costs of alternative methods and
materials that the architect may wish to consider. The architect selects the most
suitable details with complete awareness of the cost consequences of his
decision.
This type of cost plan is therefore a concise statement of the cost consequences
of any decisions the architect may make and is based on the pricing of a
specific design and specification.
Both they and the client must want to make the procedure work.
In the case of elemental cost planning, the cost target must be a practical one.
Estimates of the relative costs of alternatives prepared for the comparative cost
plan must also be accurate. If they are not, and all the items incorrectly priced
low are chosen by the architect, the cost plan may be difficult to keep to.
The architect must prepare drawings in such a way that cost checking can be
carried out.
Where element cost targets are exceeded, the architect and the quantity
surveyor should make every effort to make adjustments, either in the same
element or in other elements, so that the total target cost is not exceeded
unless the client specifically agrees to an increased expenditure because of
changes in user requirements.
Preliminary estimating and cost planning are to some degree an art not merely a
slavish calculation and application of principles learnt from textbooks. A quantity
surveyor must get the feel of the job: he must not lose sight of the fact that it is the
final cost which is of interest to the client, not the details it has been necessary for
him to study.
Not all things are calculable during the early stages. For some items a guess based on
experience and intuition may be necessary. If the wrong percentage is added at the
end for preliminaries and insurances, the total may be completely inaccurate even if
the detailed calculations for a large part of the work are accurate. With comparative
cost planning a great many detailed calculations are required, and small errors may
result in a structure or plan layout that would not have been chosen if the calculations
had been correct. If decisions are made early in the scheme they are difficult to
change at a later date.
both architect and quantity surveyor are willing to be bound (with certain
reservations) by the early estimate.
Elemental cost planning should provide a means of controlling costs so that they are
kept within the estimated figure. The process may show that the preliminary estimate
or budget figure is seriously wrong, in which case it will be necessary to refer to the
client for his decision.
One of the merits of cost planning is that it should avoid the difficulties and
complications that arise when tenders exceed estimates.
A note of the proposed standard of finishes, fittings, services etc, probable type
of contract, estimated tender date, length of contract, and cost target.
The total target cost is then divided by the total floor area. This will provide a target
cost per square metre of floor area.
From this figure a deduction is made to act as a reserve for small details that may be
overlooked when cost checks are made later. This deduction is called the reserve for
design risks. The amount allowed will vary, depending upon the architects and
quantity surveyors experience of cost planning, the amount of confidence they have
in themselves and each other, the state of the design, and its complexity. It is usually
between 2 and 10 percent of the target figure.
Also deducted from the target cost figure is a price forecast risk. This is included
to allow for rises in the prices of materials, wages etc that are expected to occur
between the time the cost plan is prepared and the date of the tender. The amount will
depend upon the quantity surveyors assessment of price trends. It is likely to vary
significantly according to the economic situation and the expected period between the
preparation of the cost plan and the tender date.
At the time the initial cost plan is prepared, there is probably insufficient detail to
prepare any approximate quantities, so information contained in analyses of other
jobs must be the main source of information. It is generally better to choose a job the
quantity surveyor is familiar with rather than a published one of which he has no
personal experience. Where possible, the analysis chosen should be of a similar type
of building, of similar size, shape and height, and with a similar specification. The
quantity surveyor and the architect might visit buildings with the most likely
analyses.
Using analyses
Choosing a suitable analysis is often difficult. It is unwise to use two analyses at the
same time for preparing the same cost plan. Different contractors price their bills in
different ways, so to use substructure from one analysis and internal finishes from
another may result in considerable errors. In some cases information can only be
obtained from an analysis which is not being used for the main part of the cost plan
(eg special equipment), but this procedure should be used with care.
Many quantity surveying practices use computer software packages or
spreadsheets for preparing cost plans. An appropriate analysis to adapt is chosen, and
a source of current cost information identified for items that do not appear in the
analysis. Adjustments are made for:
z
Time using tender price indices: multiply by index for proposed project
divided by index for analysis.
Quality by assessment.
Each element unit rate, or the rate/m gross internal floor area, is adjusted as required,
with notes as to why the adjustments have been made.
If you are using a spreadsheet in your assignment work, the format for presenting the
information could be as shown in Figure 9. Supporting calculations showing how the
quantities are obtained or rates built up will also be required.
Element
Indices
262/240
1.03/0.92
Element
quantity
Element
rate
Element
cost
Uplifted
total
cost
800
27.57
22056
Cost/m
gifa
Substructure
Existing analysis is similar
construction
Could perhaps adjust for lighter
weight
26957
2D
2E
2F
2G
2H
11.23
Superstructure
Frame, not applicable
Upper floors
Taken as per original data
Roof
Flat, but different construction
Spons price book for composite
rates
Structure, ref:
35.00/m
Finish, ref:
43.00/m
Perimeter details (say) 10/m
note no uplift to cost is required
Stairs
Flight taken to mean rise from one
floor level to the next. Taken to be as
data
External walls
Cavity walling ( net area )
130/1000 in data = 42.80/m
New bricks 250/1000,
increase of 120/1000
60 bricks/m = 16.67m,
120/16.67 = 7.20/m
Windows and External Doors
Area total for both (30% of wall)
Internal walls and partitions
Measure new quantities and price as
original where specification is the
same.
One brick walls = 525m
half brick walls = 300m
demountable partitions = 450m
(current rate)
Internal doors
Taken as cost /m gifa
1600
23.04
36864
45055
800
88.00
70400
70400
1200.00
4800
5867
882
50.00
44100
53899
378
85.30
32243
39408
525
300
28.00
14.20
14700
4260
17966
5207
450
32.00
14400
14400
2400
6.40
15360
18773
270973
112.91
The element quantity used may not necessarily be the actual quantity but the gross
internal floor area. For example, the lighting will service the whole of the building
and therefore the gross internal floor area is an appropriate quantity to use against this
portion of the services element. In the abstract in Figure 9 you will see that the same
principle has been adopted for the internal doors, as we do not know at this stage
precisely how many doors are required. When drawings showing this detail are
received, the cost plan will be adjusted.
The analyses rates of most elements have been updated to current prices. However,
the roof is of an entirely different construction. Local current prices have been used,
so no adjustment for time or location has been made.
Adjustments for quantity and quality have to be made in three ways:
1. by proportion;
2. by approximate quantities, as explained previously;
3. by inspection.
In some cases a combination of these methods may be used.
The analysis chosen is first adjusted for price changes. This may be done by
reference to cost indices which will give a general picture but may be adjusted for
market conditions, type of contract, and the special local considerations applying both
to the original analyses and to the new project. The quantity surveyor must have a
wide knowledge of the factors which affect building prices in order to make an
accurate assessment of the price adjustment necessary. The revised analysis elemental
costs may be inserted against a copy of the analysis summary.
Filling in the main details
The next stage in the preparation of the cost plan is to set out the main details. For
this a duplicated form may be an advantage: it can be used in conjunction with a form
containing a standard list of elements.
The main details will include:
1. Reference number of the job together with a CI/SfB reference.
2. Name and address of project, and site conditions where known.
3. Type of building with a brief description.
4. Date of estimate.
5. Type of contract it is proposed to use, and the period of construction.
6. Proposed tender date.
7. Cost limit or target cost (based on a preliminary estimate).
8. Total floor area, number of storeys and storey height where known.
9. Target cost per square metre of floor area.
Any quantities which are available are entered against the various elements in the
standard list. In the early stages when the outline cost plan is being prepared, the
quantity factors may be rather vague. Assumptions may have to be made, and their
accuracy will depend on the skill of the surveyor.
Where the quality in the analysis is the same as in the cost plan, adjustment of figures
for different quantity factors is relatively simple for some of the elements.
The quality adjustment is not an attempt to price a definite specification but only to
value a certain standard. If an analysis shows an elemental cost of 44.00 per m of
floor area for a block floor and skirting, and the architect approves this as the general
standard of floor finishes required, then 44.00 per m may be included in the cost
plan (assuming that adjustment for price changes have been made on the analysis).
The fact that 44.00 has been included in the plan does not commit the architect to
using hardwood flooring; he may choose any floor covering in the range of up to, say,
32.00 a square metre the remainder of the element cost being for screeds and
skirtings etc.
The task of estimating the cost of his choice occurs at the cost checking stage.
EXAMPLE 5
An analysis (after adjusting price by index numbers) contains the following information:
Internal doors element
Flush doors semi-solid core 1445 m
Hardwood doors 237m
Number of single doors 751
Number of double doors 22 = (44 leaves)
1682
m
795
1682
(620 +10)
795
1682 630
80.00
795
1682
80.00
630
= 15.92
795
6700
15.92
This figure might be increased slightly to allow for the fact that there is a smaller
percentage of double doors in the cost plan.
When all the target elemental costs have been obtained, including those for
preliminaries and contingencies, they are entered on to a cost plan summary,
including the reserves for design risk and price forecast risk, and totalled up.
It is unlikely that the total will exactly equal the total target cost obtained by dividing
the cost limit by the floor area. The difference between the two figures must be
obtained. After carefully checking all the figures and discussing the plan with the
architect, possible changes in quality or quantity may be agreed and the elements
adjusted accordingly to arrive at the agreed total target cost.
It is assumed that the original target cost was realistic, that the client wishes to keep
to the figure, and the architect intends to try and produce a design within the estimate.
In some cases the client may ask for additional items and agree to the target figure
being increased to allow for them.
The initial cost plan must be as accurate as possible, but with the slender information
likely to be available at the end of the brief stage it must be a flexible document.
During the scheme design stage, the architect can provide further drawings from
which more accurate quantity factors and a more detailed specification may be
obtained. During this stage the plan is revised in accordance with the drawings, using
approximate quantities to arrive at the cost figures where necessary.
The revised elemental cost targets will be set out on a draft cost plan which, after
discussion with the architect, will be formulated into a final cost plan at the end of
the scheme design stage.
Though the document is described as the final cost plan it is still a flexible document.
It is the quantity surveyors attempt to translate the architects wishes into sums of
money and to confirm that his wishes are capable of fulfilment. It does not say that a
special specification is going to be used in the project, but is a general guide of the
standard of building aimed at.
The cost plan might be entered up on sheets similar to those shown in Figure 10. In
some cases the initial and final cost plans might be included on the same sheet by
repeating the last three columns. The list of elements can be printed on the sheets
provided sufficient space is allowed for brief details to be noted.
Elements
Brief details
of elements
Details of the
standard used
to arrive at the
cost should be
given here
Quantity
factor
Elemental
target
cost
Total
cost of
elements
EXAMPLE 6
A tenstorey concrete-framed office block has been designed with storey heights of 3.30m.
In estimating the cost it is clear that the target figure is likely to be considerably exceeded.
A member of the design team has suggested that each storey height be reduced by
300mm.
Explain how this variation is likely to affect the various elemental costs.
The substructure may be reduced, as the wall and partition loadings will be about
9 percent less, which may affect the stanchion base and wall foundation sizes. The saving
on this element will not, however, be very great as most of the items will be unaffected.
The frame cost will be reduced, because there will be a reduction of about 9 percent in
column height and therefore concrete, reinforcement and formwork for this part of the
element will all be less. The actual size of the columns and beams may also be slightly
smaller, due to the reduced wall and partition loading. As the column part of this element
in this type of building is likely to be between a quarter and a half of the total cost of the
frame element, the saving is likely to be about 3 percent of the total frame cost.
The upper floor element may have small reductions due to less partition loading, but
these are likely to be minimal. The roof is unlikely to be affected.
The staircase element might be reduced by about 7 or 8 percent, as there will be fewer
treads, less balustrade, formwork etc. Some items such as bends in handrails are unlikely
to be affected.
How far external walls and window elements will be adjusted will depend on how much
the reduction in storey height affects the walls and how much the window area.
The internal walls and partitions elements will generally be reduced by slightly more
than 10 percent, as the door voids in the lower part of the partitions will not be affected. If
the reduction in height is taken up in part or whole by service voids above a suspended
ceiling, then the percentage reduction is likely to be less, as some partitions may not
extend into this void. If some partitions (eg WC partitions) are less than storey height, this
will also reduce the percentage reduction. Similar factors will have to be considered when
calculating the reduction in the wall finishes element.
Space heating, ventilation systems (where they exist) and heat source elements should
also cost less, but not as much as the volume reduction of 10 percent as there are unlikely
to be major changes in pipe work and valves.
There may be minor savings in some other elements.
When checking each element, the quantity surveyor must be certain that all items have
been included (eg profit and attendance has been added to specialist quotations where
required). Where drawings for only part of an element have been prepared, the quantity
surveyor may still cost out the items on the drawing and then make a reasonable
allowance for other things in the element. If it is obvious that the target cost is going to be
exceeded, the architect should be informed immediately.
In all cases the estimated total cost should be given to the architect so that he can compare
it with the cost plan and not just the part of the elemental cost which has been accurately
checked.
A record should be kept showing the elements checked, the result of the check, the
drawings used, the date when the information was sent to the architect, and any
suggestions made to the architect. If at a later date modifications in the element are made
by the architect, the effect on cost and the date should be included in the record.
(Continued)
At intervals during the detail design period the design team should have meetings to
discuss the cost position so that all members are kept informed and any necessary
modifications made.
When all the detail design drawings are complete and all the elements have been checked
individually, the quantity surveyor should collect all the information together and make a
final cost check of all the elements to ensure that alterations in one element have not
affected cost in another. At the final check, the reserve for price and design risks may also
be adjusted for any changes in conditions (eg proposed wage increases).
If the team has worked together properly, the figure obtained for total cost at the end of
the final check should be within the original cost target, subject to any adjustments agreed
to or requested by the client.
At times during the project, particularly during the design stages, the quantity surveyor
may be asked to prepare comparative costs for two methods of carrying out the same part
of the construction. These costs are normally calculated using approximate quantities and
are called cost studies or preliminary cost investigations. Though the figures so calculated
may be used later in the process of cost checking, the cost studies themselves do not
directly form part of the elemental cost planning procedure but are merely one of the ways
in which members of the design team can assist one another.
Comparisons with two or more complete buildings likely to arise in the case
of residential buildings, where several alternatives may appear equally suitable
from the planning aspect. Something more than a general opinion may be
required. Here the quantity surveyor may need to measure some approximate
quantities and price some of the details. Floor areas and the cost per m may
need to be calculated and submitted to the architect, together with the main
items of cost difference.
Calculating whether the cost of providing the same area of floor space in a
single-storey or multi-storey building is likely to be most economical. The
quantity surveyor will need to make fairly detailed estimates to arrive at the
initial cost differences.
Example 7 indicates that generalisations on costs are not good enough for guiding
design conditions. Though in general two storeys are less expensive than three
storeys, this is not always the case. In the example, the designs prepared, together
with poor site conditions, have resulted in high foundation and roof costs for the twostorey block which reversed the normal cost relationship of two-storey buildings.
EXAMPLE 7
An architect is faced with the problem of incorporating in a housing scheme either:
1. 20 four-bedroom three-storey houses as Type A, or
2. 20 four-bedroom two-storey terrace houses as Type B, of virtually the same gross
floor area but providing increased habitable area.
Prepare preliminary estimates and details for submission to the architect to show a
comparison between the two schemes. (For the purposes of this example it is assumed that
an outline specification is available and used for calculating costs.)
(Continued)
EXAMPLE 7 (Continued)
1 Schedule of accommodation
Area classification
Habitable floor area
Circulation and service areas
Total gross floor area
Exposed areas (those exposed
above or at side eg terraces)
Type A
m
Type B
m
Remarks
83.5
16.2
99.7
85.0
14.3
99.3
11.4
26.3
2 Costs
Estimated cost of Type A 32,700 which equals 327.98 per m of gross floor area
Estimated cost of Type B 35,600 which equals 358.51 per m of gross floor area
(Note: These figures are based on approximate quantities and exclude external works.)
3 Schedule of major cost variations of Type B over Type A
Item
i
Substructure
Type B Type B
Remarks
extras reduction
2100
800
1100
iv Roof
1100
Totals
4000
1100
Sections for which comparisons are to be made should be divided into subsections.
How many will depend on how many parts of the section are to have alternatives
priced.
The initial cost plan might be set out in eight columns (Figure 11):
z
z
z
z
z
z
The first four columns are completed and the price of any sections or subsections for
which there are no alternatives are calculated, either using approximate quantities or
basing the estimate on previous jobs. Prices for these items are then inserted into the
second and third pricing columns.
FIGURE 11 Part of an initial cost plan
Section
No
Name of
section
Name of
subsection
Alternatives
2.7
Internal
walls
and
partitions
A
Brickwork
B
Blockwork
and stud
a.
b.
c.
2.8
Alternative
estimate
Initial
cost
770.80
770.80
Remarks
Less likely
to be
delivery
problems
75 mm
lightweight
block
plastered
both sides
*2150.40
Stud
partition
with 75 mm
thick studs
& plasterboard and
finishing
plaster both
sides
2026.40
57 mm
Proprietary
plasterboard
partition
decorated
Lowest
estimate
direct
2150.40
2026.40
2096.00
Easiest for
dismantling
and takes
up least
space
Internal
doors
The sections or subsections for which there are alternatives have the prices for each of
the alternatives set out in the first pricing column against the brief description. The
lowest of each set of alternatives is also put in the second pricing column.
The details of the price build-up are usually set out on separate sheets so that they can
be referred to or adjustments made to all relevant elements when the final cost plan is
prepared. The detail sheets might be shown as in Figure 12.
Total
estimate ()
75 mm lightweight
concrete blocks
15.00
Two coat plaster 5.00 2 10.00
Sundry labours 7%
1.88
26.88
2150.40
3.5 m 75 50 studding @
3.40
11.90
Plaster and plasterboard
6.00 2
12.00
Labours 6%
1.43
25.33
2026.40
26.20
2096.00
Material
Price
a. 75 mm lightweight
concrete blocks and
two coats of lightweight
plaster each side
b. Stud partition of 75
50 studs at 400 centres
covered both sides with
plasterboard and
finished with one coat
of plaster
c. 57 mm proprietary
hollow cored plasterboard partition
finished for decoration
When all sections and subsections have been priced, the second pricing column is
added up.
Allowances are then made for preliminary items, contingencies, and price and design
risk (similar to those included in elemental cost planning). The figures for these
allowances are inserted in the second and third pricing columns. The final total of the
second column will give the estimated cost of the project if the cheapest alternatives
are used.
In some cases alternatives may affect the prices of sections other than those in which
the item is included. However, provided the cost figure is correct, the section in
which the money is included is relatively unimportant at this stage.
When this procedure has been completed, the initial cost plan is sent to the architect.
After carefully considering all the facts, he will choose from the various alternatives
and insert the estimated costs of his choices in the third pricing column, which can
then be totalled.
When looking at the alternatives, the architect should consider not only initial cost but
also performance of the material, aesthetics, user costs etc. The quantity surveyor
may help in the choice by adding comments and user cost figures in the remarks
column of the cost plan before sending it to the architect. When the architect makes
his choice, he may include in the remarks column his reasons for choosing the
particular item.
The design team can then compare the total of the third pricing column with any
target cost agreed at the brief stage. If there is a discrepancy between the figures, the
architect may reconsider his choices or consult with the client as to whether to work
to a new target cost.
2 Final cost plan
The architect then proceeds to the second step in the scheme design stage: the
preparation of further scheme design drawings incorporating the decisions made in
the initial cost plan. When these are completed, the quantity surveyor prepares a final
cost plan which takes into account all the chosen alternatives and sets out the costs of
each section and subsection.
The figures for each section inserted in the final plan will differ slightly from the
earlier one, as the items in the sections will generally be made to agree with the
elemental analysis items.
The architect then proceeds to the detail design stage and prepares the detail design
drawings in accordance with decisions made at the earlier stage. During this period
the quantity surveyor may be asked to make some further comparative cost studies
and may compare the specification notes made by the architect or his assistant with
the information contained in the cost plan. There should be no need for a detailed cost
check of each drawing during this period as the main details of the design have
already been settled and the cost estimated during the preparation of the cost plan.
The cost plan should not, however, be regarded as an inflexible document. The
architect must be in a position to change some of the details or materials if he wishes,
provided the overall cost picture remains unaltered or the additional (or reduced) cost
is agreed by the client.
At the end of the detail design stage, a final cost check should be made to ensure that
there have been no major variations in design that would affect the cost.
The remaining stages in the design procedure up to tender stage are the same as for
elemental cost planning. The test of cost accuracy is the tender. When the tenders are
received, the bills of quantities should be analysed and compared with the cost plan.
Even if the tender figure is the same as the target cost, the information gained by
analysis is useful for future schemes for which the architect requires similar cost
information.
Factors such as the whim of the architect and variations in estimating practice
of contractors are difficult to allow for when arriving at target rates for the
various elements. This is particularly difficult if a cost plan is being prepared
using published data, as the characteristics of the architect and the contractor
are not known to the quantity surveyor.
If the cost plan is being prepared using analyses of recent projects carried out
in the quantity surveyors office and the architect responsible for the proposed
work is well known to the quantity surveyor, then more reliable estimates of
elemental costs are likely.
It is also difficult to predict future price changes and in many cases these
changes depend upon an irrational political decision made somewhere in the
world.
Costs expressed per m of floor area are not helpful to the design team when
making decisions on the quality of materials for most of the elements. Unit
quantity prices (eg cost per m of window) are generally more useful and likely
to be more readily understood by architects and other members of the design
team.
The decline in the number of bills of quantities being produced and therefore
analysed may lead to a lack of suitable analyses to use when cost planning.
The sample database will undoubtedly shrink over the next decade.
SELF-ASSESSMENT QUESTION 4
Briefly explain the three main processes that are carried out during cost planning.
Appendix
Sample cost analyses
4. The three main processes carried out during cost planning are:
{
Continually checking that costs do not exceed the plan as the design
develops.