David Watkins RIBA Part 3 Course Cost Control and Management

Transcription

1 David Watkins RIBA Part 3 Course 2014 Cost Cost Management Control and and Management_dhw_2014 Control_dhw_2014

2 For which of you, desiring to put up a tower, For which does of not you, first desiring give much to put up a thought tower, does to the not price, first give if he much will have enough thought to to make the price, it complete? if he will have enough to make it complete? For fear that if he makes a start and is not For fear able that to go if on he with makes it to a start the end, and all is who not able see it to will go on be with laughing it to at the him end, all who see it will be laughing at him And saying, this man made a start at building And saying, and this not man able made to make a start it at complete building and is not able to make it complete Luke Chapter 14 verses Luke Chapter 14 verses 28-30

3 Buildings lie at the heart of our everyday lives Buildings cost money.and usually lots of it To build well you must first plan Project budgets are established for buildings to be delivered to projected cost and programme There is often a spotlight on Public Sector projects and strong emphasis on meeting the budget Financial difficulties results in public (taxpayers) and media becoming unsympathetic and vocal 10-40m 200m 50m 827mm 110m Steelwork 414m Programme No Cost Plan Contractual Poor procurement Disputes route

4 The construction industry and the environment in which it operates have changed significantly New and varied ways of buying design and construction Fragmentation of the industry with increased in specialist trade contracting Demise of direct employment Growth of labour-only and fixed term contracts Fee competition for consultancy services Introduction of partnering More conflict and less trust Clients wanting more value for money Business cycles hit peaks and lows with consultants and contractors having to cope with increasing pressure for : Faster construction Higher quality Lower costs What has not changed is the need for effective cost control from inception to completion

5 Clients want : Certainty of price Projects constructed and delivered within budget Completion on time The best quality possible for the price Value for money No surprises Contractors and Consultants want : A reasonable return for the risks they take Payment on time Clients who do not keep changing their minds Satisfied clients Positive feedback, enhanced reputation and glowing references Repeat commissions and business

6 The Architect needs to have Budget and Financial Awareness SETTING COST LIMITS Why? When? How? What? Who? Where? Affordability, Profitability, Accountability and Value Throughout all stages RIBA Plan of Work Project Appraisal, Project Development and Allowances Budgets and Cost Plans Client then Project Team and Stakeholders/External Funders Project Team and Team Meetings BUILDING DEVELOPMENT COSTS Land/Building Costs Acquisition and Fees Construction Costs Normal and Abnormal Costs Fees Surveys and Investigations, Professional Team, Statutory Submissions Financing Costs Financial Status Bank loans and interest (temporary and permanent arrangements) VAT

7 FACTORS AFFECTING BUILDING DEVELOPMENT COSTS Forms of Procurement Traditional and Build Management Contracting Construction Management Method of Tendering Competitive tender Negotiated tender Risk Identify and Evaluate the risks as a Project Team Establish a Risk Register and monitor Manage the risk and use register as a dynamic document Reduce the risk Accept the risk Mitigate the risk by transfer or share Eliminate the risk

8 Risk Management

9 COST IMPLICATIONS OF DESIGN VARIABLES Interested parties Site conditions Legislation Future proofing Environmental Redundant performance and circulation areas Building Shape Heritage and conservation groups, archaeological groups, local history societies, Local Authority, resident groups, ecology groups.. Location, access, topography, infrastructure, contamination, ground bearing capacity, location and diversion of services, etc.. Built environment issues to include land searches, restrictive covenants, land registration, Building Regulations, CDM, consents Changes in operation and technology may necessitate requirement for alternative layout, accommodation, M&E systems which if planned for would minimise disruption. Life cycle cost exercises Client policies will identify attitude towards environmentally-friendly inclusions/considerations such as pollution, dirt, dust, noise, smoke, traffic, travel, chemicals, sustainability in regard to waste and energy Not primary function spaces car parking areas, corridors, foyers, stairwells, balconies, lift shafts, plant rooms, operating plant.. Plan shape and the geometry created has a direct influence on the cost to construct - square, rectangular, irregular with right angles, circular

10 If each building is 5m high and 400 sqm floor area Perimeter wall areas as follows: Plan 1 Perimeter area 20 x 4 x 5 = 400sqm Plan 2 Perimeter area 40 x x 2 = 100 x 5 = 500sqm Plan 3 Perimeter area = 160 x5 = 800sqm

11 Storey Height Modulation Buildability Environmentally-friendly Life cycle costs Numbers of levels requires consideration low rise and high rise Repetition in regard to productivity and programme Ease or complexity of physical construction Adoption of passive measures insulation standards, air tightness, rainwater harvesting, electrical generation, solar heating, etc.. Capital cost to install versus benefit gained through the occupational life of the building So who can prepare the costs at the appropriate stages, incorporate the various aspects and elements and monitor continually?

12 Cost monitoring and Control Quantity Surveyor takes the lead Team approach collaborative working Project Team approach collaborative working Pre-conceived impressions?? Cost planning should be perceived as a positive disciplinary process to enable a building to be constructed to a perceived amount The Image of the Quantity Surveyor Listen, integrate, estimate, record and view big picture By the Architect

13 Cost monitoring and Control Why? Ensure employers are provided with value for money Make employers and designers aware of the cost consequences of their desires and/or proposals Provide advice to designers to enable them to arrive at practical and balanced designs within cost limits Keep expenditure within cost limits approved by the employer Provide robust cost information upon which the employer can make informed decisions - cost predictability

14 Cost monitoring and Control How? Estimating and cost planning Cost checking Pre-tender estimate Tender analysis Cost control reports during the construction stage at regular intervals Final Account and Feedback Value Engineering

15 Strategic Definition Preparation and Brief Concept Developed Technical Construction Handover and Close Out In Use Core Objectives Business Case And Strategic Brief Develop Project Objectives Project Brief Prepare Concept Final Brief Prepare Developed Building Co-ordination Prepare and co-ordinate all technical design Off site manufacturing and on site construction Handover of building and contract completion In use activities and feedback Cost Input Estimate(s) Estimate(s) Cost Plan(s) Cost Plan(s) Cost Checking Pre-tender Estimate Tender Analysis Cost Control Financial Statements Cost Control Financial Statements Final Account and Feedback RIBA Plan of Work Input at Key Development Stages continual RIBA Plan of Work

16 Cost monitoring and control - How Estimate Determination of possible cost of building Floor Area Method Functional Unit Method Elemental Method Cost Plan Critical breakdown of the cost limit for the building (provides a statement of how the Team propose to distribute the available budget among the elements of the building Elemental Method Contingency - /Construction/M&E Inclusion and Exclusions

17 Strategic Definition Preparation and Brief Concept Developed Technical Construction Handover and Close Out In Use Cost Input Estimate(s) Estimate(s) Cost Plan(s) Cost Plan(s) Cost Checking Pre-tender Estimate Tender Analysis Cost Control Financial Statements Cost Control Financial Statements Final Account and Feedback RIBA Plan of Work Input at Key Development Stages continual RIBA Plan of Work : Strategic and Concept Stages

18 Budget Estimate

19 Don t be tempted or drawn into giving cost estimates

20 Cost monitoring and control Tender Analysis Pre-tender Estimate Tender Analysis and report in respect of submitted tenders Errors Obvious Mistakes in Pricing Arithmetical Errors Qualifications Make-up and breakdown of price Consistency and Competitiveness Dealing with Errors and Qualifications Budget Estimate

21 Strategic Definition Preparation and Brief Concept Developed Technical Construction Handover and Close Out In Use Contract awarded Tenders submitted Cost Input Estimate(s) Estimate(s) Cost Plan(s) Cost Plan(s) Cost Checking Pre-tender Estimate Tender Analysis Cost Control Financial Statements Cost Control Financial Statements Final Account and Feedback RIBA Plan of Work Input at Key Development Stages continual RIBA Plan of Work : Technical

22 Cost monitoring and control What? Cost Control Forecasting and anticipating final cost at regular intervals Accounting for variations Controlling and Reporting Regularly and Comprehensively ( Team Input) Variations Additional work Omissions Change in specification Correction of Errors in contract documents

23 Cost monitoring and control Why? Cost Control Variations Keep Client updated on financial situation/anticipated costs Inform to allow decisions to be taken Variations Change of mind Errors brief/design/quantities/specification Fashion Technology Business Trends

24 Strategic Definition Preparation and Brief Concept Developed Technical Construction Handover and Close Out In Use Cost Input Estimate(s) Estimate(s) Cost Plan(s) Cost Plan(s) Cost Checking Pre-tender Estimate Tender Analysis Cost Control Financial Statements Cost Control Financial Statements Final Account and Feedback RIBA Plan of Work Input at Key Development Stages continual RIBA Plan of Work : Fabrication and Construction

25 RIBA Plan of Work : Technical

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29 Cost monitoring and control Final Account Final Account Adjustment of contract sum, Provisional Sums, PC Sums and loss/expense Variations Feedback

30 Strategic Definition Preparation and Brief Concept Developed Technical Construction Handover and Close Out In Use Cost Input Estimate(s) Estimate(s) Cost Plan(s) Cost Plan(s) Cost Checking Pre-tender Estimate Tender Analysis Cost Control Financial Statements Cost Control Financial Statements Final Account and Feedback RIBA Plan of Work Input at Key Development Stages continual RIBA Plan of Work : Final Account and Feedback