P3T_Design and Cost Planning

• Economics of Design

  1. Economies of Scale
  2. Site Density and Location
  3. Design Efficiency
  4. Ratio
  5. Repetition
  6. Building Shape and Height
  7. Functionality
  8. Cost Vs Value
• Sources of Cost Information

  1. In house database
  2. Tender Analysis
  3. Elemental Cost Analysis
  4. Rate Database
  5. 2. External
  6. PICQS Journal
  7. Tender Returns, Priced BoQs, Market Testing
  8. Quotations, Invoices
  9. Published Indices
  10. Published Data and Knowledge Centers
  11. Journals and Magazines
  12. Pricing Documents
• Estimating - Provides an assessment of the likely cost of construction works based on a set of criteria
• Estimating is a process to allow one to make an assessment, judgment or view on cost which is dependent on various factors, parameters or levels of information available
• The two fundamental components of estimate are:

  1. Cost
  2. Specification
• The following are purpose of estimating:

  1. Feed into development appraisals
  2. Check the design is developing in line with the budget
  3. Predict or establish the cost of change
  4. Assist in setting project budgets and creating a cost limit
  5. For Contractors, establish how much it needs to charge for the works
  6. Secure funding for developments
  7. Check the likely level of tender returns (PTE)
  8. Check the contractors
• Preliminary estimate is used in the early stages to give high level view on projected costs based on limited information
• Feasibility estimate usually occurs at Stage A/B of the RIBA Design Stages to enable clients to make the decision to proceed
• Budget Estimate is where design and specification (drawing layouts nad outline specification) have developed to a level that a cost plan can be developed which sets the budget (usually Stage C)
• Detailed estimate is a full measure of all elemental components and detailed description to reflect developed specification and drawing details (usually Stage D/E)
• Pre-tender estimate (PTE) is a detailed estimate based on Stage E/F design information ready to be issued for tender.
• Data required for preparing an estimate includes:

  1. Plans, sections and other relevant details of work
  2. Specifications indicating the exact nature and class of materials to be used.
  3. The rates at which the different items of work are carried out
• Estimating Methods

  1. Floor-Area Method
  2. Functional Unit Method
  3. Elemental Method
• Cost Plan is a critical breakdown of cost limit for the buildings(s) into cost targets for each element of the building (s)
• Cost Plan provides a statement of how the design team proposes to distribute the available budget among the elements of the building
• Cost Plan provides both a work breakdown structure (WBS) and a cost breakdown structure (CBS)
• Cost plan utilizes approximate quantities and quality parameters
• RIBA Work Stages

  • Stage 0 (Strategic Definition) - Define Client's Requirements
  • Stage 1 (Preparation and Brief) - Verify if the client's requirements can be achieved and refined
  • Stage 2 (Concept Design) - Design phase commenced to produce a concept that meets the client's requirement and budget
  • Stage 3 (Spatial Coordination) - Coordinate design prior to preparing detailed information to ensure minimal changes at stage
  • Stage 4 (Technical Design) - Develop information that is needed at stage 5. Input required from design team and specialist subcontractors
  • Stage 5 (Manufacturing and Construction) - Construction commences and it is intended no design activity occurs other than resolving site queries
  • Stage 6 (Handover) - Building in use and defects closed out
  • Stage 7 (Use) - Building in use until the end of its life
• Purpose of Cost Plan is to understand whether the building project is affordable
• Purpose of cost plan ensure that the cost target for each element of the project is reasonable and up to date
• Purpose of cost plan is to confirm that the cost limit has not been exceeded
• The advantage of a cost plan is it can assist the design team in controlling the total building cost
• The advantage of a cost plan is it helps spreading the controlled cost between the various elements of the building in the most efficient manner
• The advantage of a cost plan is that it ensures the best use of the employer's money
• Cost planning is a budget distribution technique that it is implemented during the design stages of a building project
• Cost planning involves a critical breakdown of the cost limit
• The purpose of the elemental cost planning is that it ensures that employers are provided with value for money
• The purpose of the elemental cost planning make employers and designers aware of the cost consequences of their desires and/or proposal
• The purpose of the elemental cost planning provide advice to designers that enables them to arrive at practical and balanced designs within budget
• The purpose of the elemental cost planning keep expenditure within the cost limit approved by the employer
• The purpose of the elemental cost planning provide robust cost information upon which the employer can make informed decision
• Life cycle costing is defined as the present value of the total cost of that asses over its operating life
• Life cycle cost techniques can be used to:

  1. Evaluate design options at the elemental level
  2. Determine optimum maintenance strategies
  3. Evaluate total building options for example refurb vs. new build
• Value engineering is a term used to describe a subset of the value management process
• Value management is focused on improving value in the design and construction stages (i.e. eliminating unnecessary costs to improve functionality without compromising the design)
• Value management is a technique concerned with defining, maximizing and achieving 'value for money
• Value management is a systematic team-based collaborative approaches to secure maximum output from limited resources
• Risk management is the identification, measurement and control of the risks that threaten life, property and the profitability of an organization.
• A structured risk management system comprises identification, analysis, and response strategy to all significant project risks with aim of reducing the opportunities for, and consequences of, loss.
• Risk analysis is the assessment of the likelihood of each risk is made for its likelihood of occurrence (likelihood) and effect on the project objectives (consequences) if it were to occur