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1 COST PLANNING

(PRE AND POST CONTRACT)

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INTRODUCTION TO COST
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PLANNING PROCESS
 CP as a process is difficult to define concisely as it
involves a variety of procedures and techniques
used concurrently by the QS or building economics.
 Traditional CP will usually follow the conventional
outline design, detailed process.
 In practical sense, the CP starts with the
development of a figure (or cost) to allow client to
decide whether the project is feasible.
 The feasibility estimate is usually calculated on a
unit cost method, refine using the elemental
method, component elements and sub-elements.
 The elemental method is a system of cost planning
and control that enables the cost of a scheme to be
monitored during the various stages of design
development.
INTRODUCTION (CONT’D)
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 Cost planning is a system that required total


coordination of the project form its commencement
to completion.
 It involved a systematic framework procedure and
demand high commitment from the design team to
cooperate with the QS to ensure that the objectives
in terms of costs, time and quality are achieved.
 The cost planning process can be regarded as a
means of getting an optimum result that offers the
best value for money or saving and is economical.
 Without cost planning, an analysis has no scientific
basic and thus all estimates are at risk unless
proven otherwise and with cost planning errors can
be minimized.
OBJECTIVE OF COST PLANNING
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 The client receives value of money, not


necessarily lower than the initial cost. There must
be a balance between quality, usage suitability,
initial cost and life cycle costing for the entire span
of the element.
 A reasonable expenditure between sections of
the building by relating the design and the
specification to the client’s budget so that more
balance design is obtained.
 The overall expenditure is within the amount
agreed by the client. The tender received should
not be higher than the amount agreed by the
client.
PRINCIPLES OF COST
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PLANNING
1. There is a standard framework reference
available for each identified part of the
building(example WBLFF, structural works,
etc). The purpose are to enable:
 The performance characteristics to be related to
each reference.
 The cost to be distributed in a balanced way
throughout the building.
 The analysis of previous projects be classified in
the same manner.
PRINCIPLES OF COST
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PLANNING (CONT’D)
2. The cost planning can be adjusted to design
requirement.
3. It allows the costs checked as the design
develops with the amount allocated.
4. It allows the designer to take necessary
measures or actions before any decision on the
final design is made.
5. It takes into account contingencies cost and
design reserve.
6. It enables costs to be presented in a logical and
orderly way for clients from time to time during
the design process.
ADVANTAGES OF COST
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PLANNING
1. The tender value will be either close to or
similar to the client’s estimate.
2. Since there is a checking system on the cost,
there is possibility that less changes will be
made to the BQ. Discussions among
designers can be made before the
production of the final design. This will
definitely save time in making adjustment to
any changes to the cost and design.
3. The effectiveness of cost and value for
money can be achieved with cost planning
ADVANTAGES OF COST
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PLANNING (CONT’D)
4. A balanced expenditure distribution may
produce a more rationalized design.
5. Cost consideration will be given more
attention since the QS is involved in the early
stage of the design process.
6. The BQ can be prepared more easily since
the QS is already familiar with or skilful in the
project and thus has clear understanding of
what is to be achieved by a designer.
7. Cost planning provides basic information on
cost comparison between different project.
DISADVANTAGES OF COST
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PLANNING
1. It requires a lot of preparation at the early
stage of the design process.
2. The designers may have some limitation in
their work style.
3. The QS need to be equipped with past
experience and knowledge pertaining to cost
and factors influencing the cost.
4. Both designer and QS are involved with a lot
more work at the design stage as compared
to when no cost planning is used.
CHARACTERISTICS OF A
GOOD COST PLANNING
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SYSTEM
 Ensure that the tender figure is as close as
possible to the first estimate, or any likely
difference is anticipated and within acceptable
range.
 Ensure that the funds available for the projects
are allocated effectively and economically to the
various elements and sub-elements.
 Always involve the measurement and pricing of
approximate quantities at some stages of the
process.
 Aim to achieve good value at the desired level of
PHASES OF COST PLANNING
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 Phase 1 : Defining the brief and setting the


budget.
 Phase 2 : The cost planning and control of the
design process. This phase is critical importance
since decisions made at design have a direct
impact on the whole life performance.
 Phase 3 : The cost control of the procurement
and construction stages. Unlike construction, the
procurement has changed where decisions are
sometimes made prior to design in Phase 1. it is
essential that cost planning advice recognizes
RIBA FRAMEWORK OUTLINE
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 A framework outlined and produced by the


Royal Institution of British Architect (RIBA) has
resulted in procedure for architects in
preparation and implementation of a
development project.
 In determining the viability of a development
project, it is important that an agreement of all
parties in the design team be obtained in
designing a framework plan that is appropriate
and effective.
 There are 12 stages in RIBA as per below :
DESIGN PROCESS
TERMINOLOGY
COST CONTROL (Estimate can occur at any stage of this process)

COST PLANNING

COST COST COST


FINAL COST
LIMIT PLAN
COST CHECKS ANALYSIS
CHECKS

SCEME DESIGN

INFORMATION
PRODUCTION

COMPLETION

TERMINOLOGY
OPERATIONS
FEASIBILITY

MANAGEMENT
QUANTITIES
PROPOSALS

FEED BACK
INCEPTION

PLANNING

HANDBOOK
BILLS OF
OUTLINE

PROJECT
TENDER
ACTION
DESIGN
DETAIL

R.I.B.A.
SITE

M
G

K
A

D
B

L
F

TERMINOLOGY
BRIEFIN SKETCH WORKING

USUAL
SITE OPERATIONS
G PLAN DRAWINGS

DETAIL
OUTLINE DESIGN
DRAWINGS
CONTRACT RECORD
DESIGN PILOT DRAWINGS DRAWING
PLANS DETAILS S
CONFIRMATION SCHEME PRODUCTION
13 OF COST LIMIT DESIGN INFORMATIO QS TASKS IN COST PLANNING PROCESS
PLANS N DRAWINGS
STAGES IN RIBA
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 Stage A – Inception
A stage where client expresses his intention to build a
building and appoints an architect and other consultant.
Cost also discussed, but not fixed as it might be change
to client’s need.
 Stage B – Feasibility
The architect and consultant will study the client’s needs.
The client’s financial will be observed in determining the
feasibility / profitability of a project. Can be done in 2
method :
a. Client provides cost estimates and consultant’s
confirm the estimate.
STAGES IN RIBA (CONT’D)
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 Stage C – Outline Proposal


The client’s need is finalized and ready to be
implemented. The design, layout and construction
method is determined to gain approval from authority.
QS will prepare the Outline Cost Plan according to group
element to provide guidelines on cost for the team.
 Stage D – Scheme Design
All matters pertaining to approval must be obtained at
this stage. Sketch drawing will be produced. QS required
to prepare Detailed Cost Plan that shows how
consultants distribute money to individual elements of a
building.
STAGES IN RIBA (CONT’D)
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 Stage E – Detailed Design


The complete design is produced. QS will required to
carry out Comparative Cost Study on several
construction methods, materials and different types of
services and coordinates cost distribution in Cost Plan. It
must include the costs of management and maintenance
of the building.
 Stage F – Production Information
Final working drawing are prepared. QS will continue to
cost check and advice the architect on the contractual
arrangement of the project.
STAGES IN RIBA (CONT’D)
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 Stage G – Bills of Quantities


The BQ and related documents will be prepared and QS
will prepare the pre-tender estimate.
 Stage H – Tender Action
Qualified tenderer are selected. The QS will prepare
tender report to determine the most qualified tenderer.
 Stage J – Project Planning
The site is handed over to the contractors. The
contractor will prepared the work programme to monitor
the project.
 Stage K – On Site Operation
STAGES IN RIBA (CONT’D)
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 Stage L – Completion
Handed over to client.
 Stage M – Feed Back
Analysis on the overall management, construction and
the performance of the project will be done. Used for
the future project.
SUMMARY OF COST
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PLANNING
DESIGN METHOD
PROCESS DUTY
SEQUENCE USED

1 Inception Cost Planning Cost Range Interpolation

2 Feasibility “ Feasibility Study “

3 Outline Proposals “ Confirm Cost Limit Single Price Estimating

4 Scheme Design “ Cost Plan “

5 Detail Design Cost Control Cost Checking Approximate Estimating

6 Production Information “ Specification -

7 Bills of Quantities “ Bills of Quantities -

Elemental Breakdown
8 Tender Action “ Cost Analysis
of Tender