Workshop and SeminarRICS New Rules of Measurement RoadshowIntroductory seminarOctober 2009Introducing theRICS New Rules of MeasurementOrder of cost estimating and elemental cost planningMichael Byng Subject matter RICS Measurement Initiatie!" #$isting standards%" &indings%" Recommendations%" 'hy change( RICS New Rules of Measurement!" Oeriew%" )ey points% Benefits% *uestions(RICS Measurement initiatieMaintenance and Operation Cost Planning and ProcurementConstruction Quantities and Works ProcurementOrder of Cost Estimates and Cost PlanningEstimatingProject overviewA suited set of rules for: Estimating- RIBA Work Stages A & B; OGCgatea!s " & # Cost $lanning- Elements- RIBA Work Stages C % E; OGC Gatea!s &A' &B & &C Works (ro)urement - RIBA Work Stages * % +; OGC Gatea! &C ,aintenan)e (ro)urement - RIBA Work Stage -; OGC Gatea!s . & /All rules de0elo$ed in )onsultation it1 Clients and (ra)titioners2 #$isting standards +,- Since ,.//0 the Standard Method of Measurement +SMM- has proided 1uantity sureyors with rules of measurement for 1uantifying building wor2s% Specifically drafted to adise 1uantity sureyors on how to measure building wor2 items for inclusion in bills of 1uantities0 for the purpose of obtaining a tender price for a building project%#$isting standards +/- BCIS Standard &orm of Cost 3nalysis+S&C3-!" &irst #dition " ,.4," Second #dition 5 ,.4." 6hird #dition 5 /778 9roides method for capturing0 analysing and storing historical cost data% Cost data captured in a form that can be used for early cost adice% :I&3 definition lin2ed to RICS Code of Measurement% #lements defined by function% ;eeloped when bills of 1uantities were main method of obtaining price% Cost data captured limited to construction costs% Bs 9reliminaries%" Main Contractor>s OBG9%" 9rojectF;esign 6eam &ees%" Other ;eelopmentF9roject Costs%" Base Cost #stimate%" Ris2%" Inflation% Estimate #ase date" 6he date on which the cost limit +e$cluding inflation- is established as a basis for calculating inflation%)ey points +/- -escri#es!" Structure of order of cost estimates and cost plans%" Constituents of a cost report% Measurement!" merely construction costs% -efines information re1uired #2 cost manager to prepare order of cost estimates and cost plans' -i.ides cost estimates and cost plans into %fi.e& principal cost estimates:,% 'or2s estimate=/% 9rojectF design team fees estimate=D% Other deelopmentF project costs estimate=E% Ris2 allowances estimate= andH% Inflation estimate% *tep #2 step guidance: " Shows how to calculate each facet by use of algebraic formula%'or2s cost estimateWorks Cost EstimateBuilding Works EstimateMain Contractor&s PreliminariesMain Contractor&sO.erheads and ProfitMain contractor>s preliminaries Ioerheads and profit Preliminaries:" CJ items which cannot be allocated to a specific element0 sub5element or component%> Initial estimates of based on a percentage addition% Subse1uent cost chec2s to be carried out on cost significant items% Subcontractors> preliminaries to be included in the unit rates applied to building wor2s% O.erheads and profit: !" main contractor>s costs associated with head office administration proportioned to each building contract plus the main contractor>s return on capital inestment% #stimates based on a percentage addition% Subcontractors> oerheads and profit to be included in the unit rates applied to building wor2s%9roject and design feesestimatePro/ect and -esign 3ees EstimatePro/ect and -esign Team 3eesOther *pecialist Consultant 3eesMain Contractor&s Pre,Construction 3eesMain Contractor&s -esign 3eeswhere Contractor,led -esign!Other deelopment and projectcosts estimateOther -e.elopment and Pro/ectCosts EstimateCosts that are not directly associated with the cost of the building wor2s0 but form part of the total cost of the building project to the employer%Risks (1) Risk allowance: The amount added to the base cost estimate for items that cannot be precisely predicted to arrive at the cost limit. NOT a standard percentage. Properly considered assessment of the cost of dealing with risk should they occur. Four main categories (cost centres) defned: Design development risks. Construction risks. Employers change risk. Employers other risks. Cost manager responsible for managing risk allowances.Ris2 allowance estimate(isk )llowances Estimate-esign -e.elopment (isksConstruction (isksEmplo2er&s Change (iskEmplo2er&s Other (isksInflation estimate$nflation EstimateTender $nflation4-eflationConstruction $nflation4-eflation9eriod from theestimate base date to the date of tender return9eriod from thedate of tender return to the mid5point of theconstruction period%Order of cost estimateframewor2(ef $tem ,/DBuilding 'or2sMain Contractor 9reliminariesMain Contractor Oerheads and 9rofitWorks Cost EstimateEH9rojectF ;esign 6eam &eesOther ;eelopmentF 9roject CostsBase Estimate4 Ris2 3llowances!;esign ;eelopment Ris2Construction Ris2s#mployer Change Ris2s#mployer Other Ris2sCost Limit (excluding inflation)K Inflation! 6ender Inflation Construction InflationCost Limit (including inflation)Cost plan framewor2(ef 5roup Element ,/DEH4K8.SubstructureSuperstructureInternal &inishes&ittings0 &urnishings and #1uipmentSericesCompleted Buildings and Building