INTRODUCTION

Cost planning and cost controls are the elements to help the planner, estimator and design teams in pre-contract phase. Pre-contract phase as RIBA plan of work, cost planning is covers from inception stage to tender actions, while cost controls covers from inception stage to completion. Generally, cost planning and cost control can really assists the planner, estimator and design team as controls of budget by the projects design. Project cost control can be defined as a process of planning, checking and verifying cost for projects based on established and taking necessary corrective action to ensure that the total project cost is approximately equal to the estimated budget. While cost planning can be defined as a process of providing cost data that will helps design teams to before any design decision can be make. Clients budget affects the design variability, as it is a factor affecting construction cost. The design team needs to satisfy the clients needs and requirements while at the same time works on the cost within the clients budget. The client always concern that their project gets Value for money, return on investment, maximum profit, and the less but not lease within his budget. The design team would enhance the sketch and outline idea into more detail designs progressively. This would take 6 month to one year or so. During this time, all relevant

consultants would participate and contribute professional ideas and advises. Quantity Surveyor inputs would be in the form of cost planning, preliminary costing, and estimations. In this step, quantity surveyor really needs to know in depth the different types of designs and its effects to cost implications.

THE IMPORTANCE OF COST PLANNING AND COST CONTROL

1. Cost Planning To ensure that the sum of money which the client sets out to spend on the project is not exceeded. In theory, the tender figure should equal the first estimate plus or minus any agreed differences, but in practice the vagaries of the market-place mean that this ideal is not always achieved. In truth, the cost plan prediction is usually taken to be fair price for the work, whereas the lowest tender figure will be distorted by the pricing policies of the tendering contractors and the state of the construction market at the time of tender. The client should be made aware of any financial differences as soon as any design changes are made. Controls and checks must carried out at intervals throughout the design and construction periods to make sure the target is being kept to ensure the client obtains good value for money. The building design must be economical, which means that the architect should provide the standard of amenity, finish and equipment predetermined by the client at the least cost consistent with good design. The information provided in the cost plan must be in form which: Is easily understood by all parties Facilitates comparison between different buildings Is related to the design process

For the above reasons the idea of design elements was developed. An element is defined as a major component common to most building which usually fulfils the same function irrespective of its design, specification or construction. In order to compare the costs of different schemes a common benchmark must be used. A perfect benchmark for comparison would change exactly proportionately with changes in cost, but this does not exist so that for cost planning the most reliable benchmark must be chosen.

Costs per place or per person are sometimes used for administrative control but they do not readily allow comparison between buildings of different types and they are not suitable for detailed cost planning. The best benchmark so far developed for comparing building costs is the superficial floor area unit in square meters which is useful for architectural design and for client requirement. The same unit has been used for elemental cost planning but it has many disadvantages including the fact that most members of the design team do not think of cost in relation to the floor area when they are designing most of the building element. Unfortunately no better comparative unit has yet been suggested. Though in some forms of cost plan the items are expected as costs per square meter of floor area they may initially be calculated using other units. For example, heating and ventilating is often more related to volume than to superficial floor area and sanitary fittings are often easier to calculate as all in cost per fitting than relate the item to the superficial floor area. The architect, having been provided with a final cost plan, will be able to see which elements are the most important in terms of cost, and by further discussion with the quantity surveyor the degree of reliability of each elemental cost may be obtained. For example because no trial holes had been dug it may not have been established for certain whether piling would be necessary, but this may have been allowed for as there was a reasonable chance that it would be needed. The order of preparation of detail drawing should be agreed between the architect and quantity surveyor, with the drawing elements with high unreliable costs being placed early in the list where practical to enable other element costs to be adjusted if necessary. The detail design drawings should solve all the problems of how building is to erected; although they may only be tracing paper sketches, they should nevertheless be so informative that the preparation of the final working drawings at a later stage is simply a question of copying. As soon as detail design drawings for an elemental are prepared they should be passed to the quantity surveyor who will check the cost against the figure included in the final cost plan. The checking is usually carried out by measuring approximate quantities and pricing at rates for current work with necessary adjustments. 3

The building up of cost checks are best set out in sections for example each floor finish separately with a summary and total so that modifications are easily adjusted. When

consultants are employed their design must be checked against the target cost allowed for their element and any quotations obtained must be checked with the sum allowed in plan. As the drawings etc for each element are checked the architect should be informed immediately of the result and whether the elemental cost target is likely to be achieved. If any action is necessary for example the element is not on target, the quantity surveyor should suggest whether modification is likely to be necessary and how this might be carried out. It is for architect, in conjunction with the remainder of the design team, to decide what modification he will make but by keeping continuous contact with the quantity surveyor he will be aware of all the cost implications of his design decisions.

2. Cost control Any clients or developer will always want value for money for their project, one that give them the greatest return for a minimum capital invested. It has been suggested that, return or profit can be maximized either by selling the products at higher price, increasing the volume sales or controlling the cost and expenses. But due to the following factors, its more appropriate for clients or developer to give greater emphasis on the control of cost and expenses. Cost control is very important in every construction project because it give the client or developer good value for money. It is a building which is soundly constructed, of satisfactory appearance and well suited to perform the functions for which it is required, combined with economical construction and layout. Furthermore, to achieve a balanced and logical distribution of the available funds between the various parts of the building. Thus the sum allocated to every part of the building will properly related to the type and class of building and to each other. It also keep total expenditure within the amount agreed by the client, frequently based on an approximate costing prepared by the quantity surveyors in the early stage of the design process.

THE PROCEDURES AND GUIDELINES Private and public projects are not much different in terms of procedures and guidelines for cost planning and cost control. It is really base on system that provide for quantity surveyor as standard method whether in public sector or private sector. The reliability is depends how the quantity surveyor executes and explain their works on the project plans. The procedures are consist of 3 phase generally which is phase 1 estimates and establish the cost target, phase 2 cost planning, and phase 3 cost checking. 1. Phase 1: Cost estimates and establish cost target. The purposes of this phase are to establish preliminary estimates that is cost target and cost limits. The decision on design made can be explain from the cost limits and information given by client through discussion with design team. The estimations must be reasonable, accurate, reliable and capable to complete the projects on budget tracks includes all the client needs. Detail cost plan can be prepared by using some items and other information receive from discussion by projects team and clients. Commonly the items are copies of sketch plans and elevations, a brief specification of construction methods, standard of proposed project, and suitable cost analysis from previous projects. Cost limits can be estimates using the interpolation methods. As to build preliminary

estimates, method of floor area, units and volume is often employed. These 3 methods are depends on the total and type of cost data available, information and experience of quantity surveyor himself. The criteria of the proposed building and analyze building are associated with its : Size and shape Type of building Quality and materials Methods of construction Different in price change and location index

2. Phase 2: Preparing the Cost Plan The purposes of this phase are how the total estimates cost can be allocated to every elements of propose building. Similar with preliminaries estimation, cost plan can be prepared as much as clients requirements and detail information received. Preparing the cost plan actually to provide the suit of quality within the clients budget whether in public or private projects. Cost plan can provide cost target that can be create by: Obtaining fixed cost target as expenditure on infrastructure used on public projects Obtaining average cost of similar accommodation in projects Estimation on design by clients idea

The communications and cooperation within all parties in project team at this stage very important as to ensure the accuracy of cost plan works. As from phase 1, the cost limits had been obtain using whether cost analysis of similar building, approximates quantities method, or combination cost analysis and approximates quantities. At this phase, this cost target will be allocated to every element of the buildings as require. Quantity surveyor should really realize of changes in design, market condition, time, location and contract conditions of the analyze projects. The examples of distribution to elements are like substructure 20% , superstructure 40% , services 12% , finishes 15% , furniture and fittings 13%. It is distribution of 100% cost limits as before. The allocations are referring percentage of cost / Gross Floor Area of building. From there, total cost of every element can be calculated and the figure is consisting of the total cost of building. The practicing quantity surveyors are capable as using this method as their experiences. The accuracy is depends on how detail every elements are extracted.

3. Phase 3: Cost Check The purpose of this phase is to examine, investigate and secure the design for every element built according to cost plan and cost controls that are reliable and at the proportion of cost limit. Cost checking steps are start when quantity surveyor receives the draft

drawings and specifications after each element had been built. Whenever cost check are start, it can be said that design team, client and every parties involve are confirm agreed the cost plan built. Commonly, the method use for cost checking by quantity surveyor is approximate quantity use. Which is more detailed and it can easily understand by all parties involve. The quantity surveyor will compare the cost plan with cost check built, prepare the reports and lastly informs to all parties if there are any changes from original cost limits. The quantity surveyor needs to secure that the allocations for each elements of propose buildings are realistic base according to previous similar building which is analyze building. When the results are release, some step needs to be taken to repair unnecessary expenditure of building cost. Its due to inaccurate results to cost target. 3 types of results are commonly release which is :i. ii. iii. Cost check more than cost target Cost check less than cost target Cost check equals to cost target

The steps to repair the inaccurate results of cost check by changing the expenditure to every element are such like:i. ii. iii. iv. Borrow, or excess money to elements. Change quality and design Keep extra as savings Ask for additional money from client

To suit the current building cost, some elements need to be adjust such as price index, location index, quality, and quantity. 8

THE EFFECTIVENESS OF THE PROCEDURES AND GUIDELINES

1. Project change controls The effectiveness of cost controls and cost plan are rely on some changes on time, quality, and quantity of building that are propose. As the method of cost plan and control, they are produce by information from analyze building that are most similar building with the propose building. There will be some changes in tender prices due to time changes. The price level are important to be update to current price level. There are some different between propose projects and analyze projects in terms of quantity. The quantity means that is the calculations involve of quantity factor of building such as gross floor area, element unit rates and element unit quantity. Besides that, quality for building should also need to be adjust. Its include of specification needs of current building quality where as additional quality cost or vice versa. The accuracy of the calculations and more deeper analyze with control in change to time, quality and quantity makes the result of cost plan and controls more effective, reliable and more realistic. 2. Cost controls, and clients budget or needs It is important to controls and managing the cost from early design stage until the completion of projects. As the cost target, it is really depends on clients budget in determining how effective the cost plan and control. A good cost planning system will take into account all the clients needs in the implementation of cost planning. The information that receives from clients will need to take on note. As to satisfy, the clients need and also design criteria within the budget will makes the projects successful. So that, quantity surveyor should really know how to tackles the clients need but at the same time control and plan the cost.

3. Quantity surveyor professionalism and communications The construction industry and construction situation currently change and influenced by advancement in technology and globalization. Quantity surveyor really need to exposed to new technology advancement. Nowadays, there is computer software that can provides cost information and able to do automatic cost control, which is can make the calculation more accurate. Its can make cost plan and control more effective due to time consumption. The communication between parties involves also influence the effectiveness of cost plan and control. Quantity surveyor need always be informed of any changes to design and clients needs.

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REFFERENCES

1. Koh Wee Liang, 2005 Universiti Teknologi Malaysia. Cost control in construction project of the site. 2. http://www.pmforum.org/viewpoints/2009/PDFs/oct/VP-Stretton-COSTCONTROL.pdf 3. http://pmbook.ce.cmu.edu/05_Cost_Estimation.html 4. Khairani Haji Ahmad (2011), Construction economics, (2nd .ed.) Pearson custom publishing

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