cost planning rics

8/18/2019 Cost Planning Rics

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Qonqests Technical Solutions Pvt. Ltd

COST MANAGEMENT

Cost Planning Concepts


COST PLANNING

What is Cost Planning?

• Work involved in Controlling the Design of a

Building within the Set Parameters of Cost, Areaand Quality

• Cost Planning is Proactive - Working with PM/DMteam during the Needs Study & Design Phases ofthe Project. It Precedes the issue of that stagedocument

http://www.pdfcomplete.com/cms/dpl/tabid/111/Default.aspx?r=du2vH8r


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COST PLAN

What is a Cost Plan?

• A written description of Cost broken in toElements, Levels & Areas, subject to constantupdating and reconciliation as the design evolves

• Cost Plan is NOT an Estimate

• Cost Plan facilitates “ Designing to a Cost ”


ESTIMATE

What is an Estimate?

• A Cost applicable to a design at a Set FreezePoint

• Different levels of Estimate - Indicative, Budget,Contract

• Usually an Indicative Estimate forms the InitialCost Plan



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ESTIMATION

What is Estimation?

• The actual process of Quantifying and Pricing theEstimate for a Set Design at a particular point intime


RELATIONSHIP OF COSTPLANNING TO ESTIMATING

• The original Cost Plan can be extracted from an indicativeestimate for a set design at a particular point in time

• The budget and contract estimates should be

confirmation of the Cost Planning that has taken place asthe design has progressed i.e. management cost checks

• Cost Planning requires a working knowledge of alldisciplines, and the ability not to just cost what is on thedrawings - to allow for the real effects when workingdocuments are finalised - ability to see in the future



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USE OF COST PLANNING

1. Control of Cost

2. Early Commitment

3. Client ’s Confidence

4. Advantages for the Design Team

5. Maximise Construction / Design Overlap


CONTROL OF COST

• The costs and profitability of the project are largelydetermined at the design stage. As the project proceedsfurther in to construction stage, risk of losses remainpresent, but opportunities for cost reduction or profitimprovement diminish.

• Cost Planning enables the PM to observe and control theinteraction of design and cost during the design process,and maintain the overall scheme within the budgetlimitations.

• Cost Planning ensures a direct relationship betweeninitial and final project cost



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ADVANTAGES FOR THE DESIGN TEAM

• Cost Planning provides a basis for “ value ” judgement ofdesign alternatives in a clear and concise form

• Looking at alternatives and checking costs at the earliestpossible stage prior to detail drawings commencing,means less abortive design

• An experienced Cost Planner should be able to questionearly design solutions for inadequacy - savingembarrassment later


MAXIMISE CONSTRUCTION / DESIGN OVERLAP

• Early Construction Commencement

• Care is required to ensure that the gains in starting early,are not lost in the haste required to complete design

• Where design is just ahead of site requirements, anintense cost checking process is important



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STAGES OF COST PLANNING

• Initial Cost Plan can be produced from a welldefined user needs brief, giving areas and qualityrequirements, prior to any drawing being produced

• Once outline sketch plans, sections & elevations aredrawn, options comparison and elemental checksagainst client budget can take place

Concept to Completion: Cost Plan evolves throughout theduration of project


Inception/ Appraisal Establishing theneed for the projectFormation of in-

house workgroupIdentification of

Client’srequirements

O pti on App rai sal In itia l C os ti ng

Feasibility/ DesignBrief

Appoint PM &Design Team CDM Co-ordinator

Surveys &exploratory works

Development ofStrategic Brief Feasibility Study

Outline BusinessCase

EstablishCritical

timescales

Concept Design/Outline Proposals

Develop Outlineproposals &

preliminary Design

Preparation of InitialCost Plan & master

programmeRisk Assessments Health & SafetyIssues (CDM)

Set sustainability &Green Targets

Assessment ofProcurement routes

Consultations &

Approvals

Detailproposal/Design

DevelopmentDetailed DesignDevelopment

Room Data collation& documentation

PlanningPermissions

Review programme,risks & procurement

options

Elemental Cost plan,Project Cost Plan &

Budget ConfirmationConsultations &

ApprovalsScheme is

“ Frozen”

Final Proposal/Technical Design

Development ofFinal Proposal

Detailed Room DataSheets

Incorporation ofSpecialist Reqmt, IT,

AV etc.

Review ProcurementStrategy, Cost Plan

& programme

InternalConsultations i.e.security, fire, IT

Sign-off proposal bythe Client

Production

Information

Preparation ofDetailed Co-

ordinateddrawings

Final Confirmation ofmaterials & finishes

CompleteSpecifications,components

drawings, BoQs

Building Warrant Application

Review ProcurementStrategy, Cost Plan

& programme

Review of GreenBldg

TenderDocumentation

Preparation ofTender

DocumentationComplete Pre-tender

EH&S planFinal ProcurementStrategy, Cost Plan

& programme

Tender Action Identification ofpotential contractor Tender ReportContractorsInterviews

Approval of Client toappoint Contractor

MobilisationBuilding contractor

prepares tocommence on site

Main contractorappoints sub-contractors

Onsite Construction Works Monitoring of worksat siteChange ControlManagement

Cost Control Duringworks

Snagging, Testing &Commissioning

Handover of theproject to the Clients

Fit-out &Furnishings

Occupation Removals Occupation Utilization of thebuildingDefects Liability

PeriodSettlement of Final

AccountsPost Contract

Review & ClientFeeback

A

B

C

D

E

FG

H

J

K

L

ConstructionLife Cycle



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Indigenizing RIBA …!Stage Level of Cost Plan

InformationNeeded

Info Neededfrom Remarks for the Information Needed for Cost Plan

ProjectDefinition

Indicative CostPlan

User Brief/VisionDocument

ClientA wri tten statement including need brief, spat ialrequirements, capacity etc. along with a visiondocument or reference benchmark needed

Concept Cost Plan Design Concept Consultants

A concept design with possibly a design brief/ designconsiderations to be furnished along with dimensioneddrawings for plans, elevations, sections etc. & materialchart

SchematicBudgetoryCosting based onElementary BoQ

SchematicDesign Consultants

Complete schematic designs including architectural,structural, MEP drawings, schedule of finishes andmaterial specifications

DesignDevelopment

Tender BoQ DetailedDesigns

ConsultantsAll drawings, specifications and Consultants BoQsrequired as per agreed programme and details.


PLEASE NOTE:

Cost Planning is of greatest use in Design & Constructionprojects. It is less relevant when we have limited control over

the design (i.e. construction management projects)



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OVERALL PRINCIPLES OF COST PLANNING

1. Logical set out

2. Balancing savings and overruns

3. Project Engineering

4. Rates & Pricing

5. Level of detail


LOGICAL SET OUT

• The cost plan is a statement of space, quality and cost forthe project, and requires acceptance by the design team

• The dominant factor can vary from project to project

• The cost plan should be set out in a logical way to facilitate

understanding and flexibility in use, therefore it is dividedin to levels, areas and elements/trades as applicable to aparticular project (proprietary software?)

• The initial cost plan should allow for undesigned butnecessary items

• An elemental analysis check with historical data



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BALANCING SAVINGS AND OVERRUNS

• Cost overruns in one area can be balanced by costsavings in another

• If a saving requires a change to the specification tobalance an overrun - agree with the client

• If a saving is generated, and the project team wish toapply this to another project element, i.e. anupgrade to the contractual requirement - agree withsenior management

Cost Planning is NOT an EXACT SCIENCE. It is an overall totalpackage.


PROJECT ENGINEERING

• Design options evaluation - project engineering skills arerequired - Why not try? Can it be built? Etc.

• Various options should be compared to see which is theOPTIMUM SOLUTION - this is not purely a ?? of price

• It is important when considering different options to takein to account other items that may be effected

• All details should be queried where a complicatedsolution has been proposed. These small details can costus a great deal when we get to actual construction on site.



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RATES & PRICING

• current market rates

• historical estimating / cost planning records

• cost feed back from sites

• local consultants

The cost information used in cost planning would come from,in order of importance


LEVEL OF DETAIL

1. Project definition stage

2. Concept design stage

3. Schematic plan stage

4. Design Development

5. Final Design

Depends on information and time available



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PROJECT DEFINITION STAGE

• an all-up cost per m2 of gross building area for indicative

budgets only (Note: this is an extremely unreliable basisupon which to start)

• from experience and historical records build up anelemental cost. This should also include parameters forsketch outline - plans and an indication of quality

What is available at this stage?

• Needs Brief

Costing Method?


CONCEPT DESIGN STAGE

• Build up on a level basis an elemental cost on alternativedesign schemes to assist with the choice

• from experience and historical records build up anelemental cost. This should also include parameters forsketch outline - plans and an indication of quality


• Needs Brief

• Plan outlines

Costing Method?



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SCHEMATIC DESIGN STAGE

• Build quantities taken off in levels and / or areas in anelemental format

What is available at this stage?• Needs Brief

• Schematic Plan, Elevations and Sections

• Schematic Structural Plans

• Outline Finishing Plans

Costing Method?


DESIGN DEVELOPMENT

• Bulk quantity take-offs to compare design alternatives

• Check all preliminary drawings conform to cost plan parameters

• Check all detailing


• Alternative design options

• Preliminary drawings

• Preliminary specifications, finishes schedule, doorschedules etc.

• Detailing

Costing Method?



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FINAL DESIGN

• Examine to ensure that all corrections have beenincorporated and that there are no last minuteinclusions

What is available at this stage?• All final AFC drawings, specifications etc.

Costing Method?


Elements of Checking a Bldg EstimateScope v/s Provision (Plot Area/ FAR/ GFA etc.)

Area, Perimeter, Height Statements

Provided Area v/s Needs Brief

Adequacy of Elements/ Trades Items

Abnormal elemental qty variations thru floors

Soffit of slab ~ Ceiling Finishes ~ Floor Finishes ~ GFA

Reinforcement densities ranges

Formwork / Concrete Ratios

Walls/ Façade/ Wall Finishes corresponds to Area/ Perimeter



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Elements of Checking a Bldg EstimateAir, Water (all types), Electricity – Path in/ Path out

Defined P&IDs/ SLDs

Services Provision v/s Need

Risers Lengths ~ Building Heights

Horizontal Reticulation ~ Approx runs on the floor plate

External Services around the building ~ Perimeter statementAir-conditioning tonnage v/s area covered

Fixtures per unit area


Important Factors

Formulation of Cost Plan based on design information level.

Identification of Cost Parameters and Elements.

Identification of Cost Heads for each Element.

Estimation of Cost Heads based on preliminary concept

drawings and established database of market prices.

Comparison of Alternative Designs on costs.

Identification and estimation of cost for ongoing design

changes.



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QUESTIONS

cost planning rics

Documents