Design Economics & Cost Planning

(T022) – Level 3
Design economics and

cost planning
•
The areas of competencies expected by RICS APC
Pathway
• Economics of design - site density, wall / floor ratio, storey

heights, room sizes, letable / non-letable
• Sources of cost data - BCIS / in-house database / other
external sources
• Inflation (tender / construction)
• Location factors, regional variations
• Currency fluctuations
• Estimating • Cost Plans
• Cost Planning
• Life cycle costing - capital / running costs / replacement
• Value Engineering • Value Management
• Risk Management and Analysis (contingency)
• State of the construction market
• State of the economy generally – locally and globally
• Interest rates
What are the factors affecting the cost
of the building?
• Design Factors
• Site Factors
• Economic Factors
Simple Example
• Making a box of 1.5m3
• Easiest way 1.5m x 1m x 1m=1.5m3
• Sides 1.5mx1m- 4 Nos, 1mx1m – 2 Nos
• Size of plywood – 2.4mx1.2m. Need 5 sheets
• Alternative 1.2m x 1.2m x 1.2m= 1.73 m3
• or 1.2m x 1.2m x 1.0m=1.44 m3
• In both alternatives need only 3 sheets
Design Factors
• shape/plan shape
• grouping of buildings,
• number of stories
• story height-
• size-
• circulation space
• internal layout
• Specifications
• working conditions
Effects with the plan shape
10 x 10 4 x 25
d=11
What are the effects ?
• Length of foundation
• External walls
• Eaves Gutters
• Drainage
• More paved areas
• Natural lighting, Easy to sub-divide
• Also; span of floors/roof, int. layout, service
layout, ext. works.
• Irregular shapes what are the impacts ??
Grouping of buildings
Design Factors Cont,d
• Height- all elements with vert. comp.
• Size - increase may reduce m2 rate, savings
on plant rooms, kitchen bathroom
• circulation space,- affects to lettable area
• internal layout,
• specifications,- client, function, aesthetic,
initial cost, future cost, Architects
preference, life of the building
• working conditions (it is necessary to know what
happens to the cost of different elements when part of the
design is changed.)
• Work in the existing buildings- redesign
of interior, refurbishment using existing
interior, retention of some structures
/features.
• Work in existing building is a big
challenge which will have an impact on
cost.
Number of stories and story height
Site Factors
• location, distance to the tip for disposal
• topography, - wind loading
• geology,- soil reuse, soil type for foundation,
• environmental,- tree preservation orders,
protected species and animals, Eradication of
Japanese knotweed, protection of reverbanks,
flood protection
• access to site,
• existing services,
• existing site use,
• size of site,
• adjoining properties
Economic Factors
• amounts of works available
• availability of resources
• desirability of the project
• cost of borrowing
• micro-economics of the tendering
firms-future workload, impact on tender price,
profit to share holders, fixed costs, overheads
Cost Planning and Pre Contract Cost
Control
• Aim;
• To ensure Client obtains value for money by
1. Setting a realistic cost limits which represents
a fair price for the project
2. Deciding how this money is to be spend
3. Checking that the money is being spent as
intended
Outline Plan of works(Oman?)
• Inception
• Feasibility
• Preliminary Design- outline proposal,
schematic design
• Detailed Design
• Production Information
• Bill of Quantities
• Tender Action
• Project Planning
• Operation on site -> Completion
RIBA work stages
RIBA work stages
RICS NRM-Definitions
There are lot of definitions you need to
remember which can be questions in APC.
Ex. Base cost estimate, inflation, cost limit, cost
checks, EUQ, EUR, PC sum,
Essentials of cost control system
• Set Targets (prepare cost estimate
/cost plan)
• Monitor Progress (measure and
compare)
• Report Findings
• Agree Adjustments ( cost plan or
design)
Details /data used for cost planning
Historical data
• Price Books
• Bills of Quantities for past projects
• Final Accounts for past projects
• Building cost information service
(BCIS)
• Trade Journals
Historical Data
• Can historical data simply be transferred?
Most unlikely;
• Need adjustments for
1. Time
2. Location
3. Building Type etc.
Methods of cost planning
• Floor Area Method
• Elemental Method
• Unit rates and element unit rates
• Updating unit rates and other costs
to current estimate base date
• Comparative
• Elemental approximate quantities
Elemental Cost Planning
Elements
An Element is a part of a building which
performs a specific function
• Sub structure- Piling, earth works, foundation
etc.
• Superstructure- Frame, upper floors, Roof,
Stair, External walls, Doors and windows,
Internal walls and partitions
• Internal Finishes- walls, floors, ceilings
• Fittings and furnishings
Elements Cont’d
• Services- Sanitary Appliances, disposal
installations, Water Installations, Space
heating and AC, Ventilation system, Electrical
installation, Gas/Fuel installation, Lifts, Fire
Fighting, Telephones, medical gas
• External Works- site preparation, Roads and

paths, landscaping, Drainage, External services
Comparative Cost Planning
• A process for comparing the cost of
alternatives which perform the same function
Ex. Steel and Concrete frames

Different roof structures and finishes
sample
Not included in Cost Plan
• Land Cost
• Advertisement Cost
• Finance Cost
• Legal Fees
• Employer's operational cost
• Feasibility study cost
• Cost of future authority requirement changes
• Inflation/Price Fluctuation/Market Conditions
Value for Money?
Life Cycle Costing
Definitions
Whole life cost
Life cycle cost
Stages of Life cycle costing
• Life cycle cost analysis; collection and analysis
historic date connected with actual costs
• Life cycle cost management; collecting data
on other buildings, planning and controlling
occupancy costs
• Life cycle cost planning; using cost analysis to
predict future costs
Net Present Value
Value Engineering/Management
“A systematic approach to achieve the required

project functions at least cost without
detriment to quality, performance and
reliability “
Value Engineering is part of the overall value
management process which should be carried
out during the pre-contract process mainly
during the design stage
Value Engineering/Management
“A systematic approach to achieve the required

project functions at least cost without
detriment to quality, performance and
reliability “
Value Engineering is part of the overall value
management process which should be carried
out during the pre-contract process mainly
during the design stage
Value Management
•Value Planning
•Value Engineering
•Value Review
Risks in Construction Industry
Risks are unavoidable in any

project and to be…
• Identified
•Analyzed
•Monitored and Controlled
Risk and Risk Allocation
Identification and recording;
•All possible factors well in advance
to decide whether to proceed with
the project or not
•Categorization of identified risks in
logical manner for easiness of
assessing and managing them.
Analysis/Assessment
(Magnitude, Probability and
Occurrence). Management of risks
depend on the accuracy of
assessment.
•Quantification and qualitative
techniques can be used.
•Probabilities and sensitivity analysis.
•Can categories as critical, major,
minor
Risk and Risk Allocation
•Identification and recording

•Analysis (Magnitude, Probability
and Occurrence)
•Response (Avoid, Reduce,
Accept, Transfer, sharing,
retention)
•Contingency

Design Economics & Cost Planning

Uploaded by

Copyright:

Available Formats

Design Economics & Cost Planning

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Design Economics & Cost Planning

Uploaded by

Copyright:

Available Formats

(T022) – Level 3

Design economics and

• Economics of design - site density, wall / floor ratio, storey

• External Works- site preparation, Roads and

Ex. Steel and Concrete frames

“A systematic approach to achieve the required

“A systematic approach to achieve the required

Risks are unavoidable in any

•Identification and recording

You might also like