1 COST PLANNING

(PRE AND POST CONTRACT)

1
 INTRODUCTION TO COST PLANNING
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PROCESS
CP as a process is difficult to define concisely as it
involves a variety of procedures and techniques used
concurrently by the QS or building economics.
Traditional CP will usually follow the conventional outline
design, detailed process.
In practical sense, the CP starts with the development of a
figure (or cost) to allow client to decide whether the
project is feasible.
The feasibility estimate is usually calculated on a unit cost
method, refine using the elemental method, component
elements and sub-elements.
The elemental method is a system of cost planning and
control that enables the cost of a scheme to be monitored
during the various stages of design development.
 INTRODUCTION (CONTD)
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Cost planning is a system that required total coordination

of the project form its commencement to completion.
It involved a systematic framework procedure and
demand high commitment from the design team to
cooperate with the QS to ensure that the objectives in
terms of costs, time and quality are achieved.
The cost planning process can be regarded as a means
of getting an optimum result that offers the best value
for money or saving and is economical.
Without cost planning, an analysis has no scientific basic
and thus all estimates are at risk unless proven otherwise
and with cost planning errors can be minimized.
 OBJECTIVE OF COST PLANNING
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The client receives value of money, not necessarily

lower than the initial cost. There must be a balance
between quality, usage suitability, initial cost and life
cycle costing for the entire span of the element.
A reasonable expenditure between sections of the
building by relating the design and the specification to
the clients budget so that more balance design is
obtained.
The overall expenditure is within the amount agreed by
the client. The tender received should not be higher than
the amount agreed by the client.
Integrating cost with time and quality.
 PRINCIPLES OF COST PLANNING
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1. There is a standard framework reference

available for each identified part of the
building(example WBLFF, structural works, etc).
The purpose are to enable:
The performance characteristics to be related to each
reference.
The cost to be distributed in a balanced way throughout
the building.
The analysis of previous projects be classified in the
same manner.
 PRINCIPLES OF COST PLANNING
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(CONTD)
2. The cost planning can be adjusted to design
requirement.
3. It allows the costs checked as the design develops with
the amount allocated.
4. It allows the designer to take necessary measures or
actions before any decision on the final design is
made.
5. It takes into account contingencies cost and design
reserve.
6. It enables costs to be presented in a logical and
orderly way for clients from time to time during the
design process.
 ADVANTAGES OF COST PLANNING
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1. The tender value will be either close to or similar

to the clients estimate.
2. Since there is a checking system on the cost, there
is possibility that less changes will be made to the
BQ. Discussions among designers can be made
before the production of the final design. This will
definitely save time in making adjustment to any
changes to the cost and design.
3. The effectiveness of cost and value for money can
be achieved with cost planning process.
 ADVANTAGES OF COST PLANNING
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(CONTD)
4. A balanced expenditure distribution may produce
a more rationalized design.
5. Cost consideration will be given more attention
since the QS is involved in the early stage of the
design process.
6. The BQ can be prepared more easily since the QS
is already familiar with or skilful in the project and
thus has clear understanding of what is to be
achieved by a designer.
7. Cost planning provides basic information on cost
comparison between different project.
 DISADVANTAGES OF COST PLANNING
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1. It requires a lot of preparation at the early stage

of the design process.
2. The designers may have some limitation in their
work style.
3. The QS need to be equipped with past
experience and knowledge pertaining to cost and
factors influencing the cost.
4. Both designer and QS are involved with a lot more
work at the design stage as compared to when no
cost planning is used.
 CHARACTERISTICS OF A GOOD
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COST PLANNING SYSTEM
Ensure that the tender figure is as close as possible to
the first estimate, or any likely difference is
anticipated and within acceptable range.
Ensure that the funds available for the projects are
allocated effectively and economically to the various
elements and sub-elements.
Always involve the measurement and pricing of
approximate quantities at some stages of the process.
Aim to achieve good value at the desired level of
expenditure.
 PHASES OF COST PLANNING
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Phase 1 : Defining the brief and setting the budget.

Phase 2 : The cost planning and control of the design
process. This phase is critical importance since decisions
made at design have a direct impact on the whole life
performance.
Phase 3 : The cost control of the procurement and
construction stages. Unlike construction, the procurement
has changed where decisions are sometimes made
prior to design in Phase 1. it is essential that cost
planning advice recognizes the impact of procurement
decision on design and construction.
 RIBA FRAMEWORK OUTLINE
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A framework outlined and produced by the Royal

Institution of British Architect (RIBA) has resulted in
procedure for architects in preparation and
implementation of a development project.
In determining the viability of a development
project, it is important that an agreement of all
parties in the design team be obtained in designing
a framework plan that is appropriate and effective.
There are 12 stages in RIBA as per below :
 DESIGN PROCESS TERMINOLOGY
COST CONTROL (Estimate can occur at any stage of this process)

COST PLANNING

COST COST COST

FINAL COST
LIMIT PLAN
COST CHECKS ANALYSIS
CHECKS

SCEME DESIGN

INFORMATION
PRODUCTION

COMPLETION

TERMINOLOGY
OPERATIONS
FEASIBILITY

MANAGEMENT
QUANTITIES
PROPOSALS

FEED BACK
INCEPTION

PLANNING

HANDBOOK
BILLS OF
OUTLINE

PROJECT
TENDER
ACTION
DESIGN
DETAIL

R.I.B.A.
SITE

M
G

K
A

D
B

L
F

TERMINOLOGY
BRIEFIN SKETCH WORKING

USUAL
SITE OPERATIONS
G PLAN DRAWINGS

DETAIL
OUTLINE DESIGN
DRAWINGS
CONTRACT RECORD
DESIGN PILOT DRAWINGS DRAWING
PLANS DETAILS S
CONFIRMATION SCHEME PRODUCTION
13 OF COST LIMIT DESIGN INFORMATIO QS TASKS IN COST PLANNING PROCESS
PLANS N DRAWINGS
 STAGES IN RIBA
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Stage A Inception
A stage where client expresses his intention to build a building
and appoints an architect and other consultant. Cost also
discussed, but not fixed as it might be change to clients need.
Stage B Feasibility
The architect and consultant will study the clients needs. The
clients financial will be observed in determining the feasibility
/ profitability of a project. Can be done in 2 method :
a. Client provides cost estimates and consultants confirm the
estimate.
b. Consultant provides estimates
 STAGES IN RIBA (CONTD)
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Stage C Outline Proposal

The clients need is finalized and ready to be implemented. The
design, layout and construction method is determined to gain
approval from authority. QS will prepare the Outline Cost Plan
according to group element to provide guidelines on cost for
the team.
Stage D Scheme Design
All matters pertaining to approval must be obtained at this
stage. Sketch drawing will be produced. QS required to
prepare Detailed Cost Plan that shows how consultants
distribute money to individual elements of a building.
 STAGES IN RIBA (CONTD)
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Stage E Detailed Design

The complete design is produced. QS will required to carry out
Comparative Cost Study on several construction methods,
materials and different types of services and coordinates cost
distribution in Cost Plan. It must include the costs of
management and maintenance of the building.
Stage F Production Information
Final working drawing are prepared. QS will continue to cost
check and advice the architect on the contractual arrangement
of the project.
 STAGES IN RIBA (CONTD)
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Stage G Bills of Quantities

The BQ and related documents will be prepared and QS will
prepare the pre-tender estimate.
Stage H Tender Action
Qualified tenderer are selected. The QS will prepare tender
report to determine the most qualified tenderer.
Stage J Project Planning
The site is handed over to the contractors. The contractor will
prepared the work programme to monitor the project.
Stage K On Site Operation
The contractors duty to implement and complete the works.
 STAGES IN RIBA (CONTD)
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Stage L Completion
Handed over to client.
Stage M Feed Back
Analysis on the overall management, construction and the
performance of the project will be done. Used for the future
project.
 SUMMARY OF COST PLANNING
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DESIGN METHOD
PROCESS DUTY
SEQUENCE USED

1 Inception Cost Planning Cost Range Interpolation

2 Feasibility Feasibility Study

3 Outline Proposals Confirm Cost Limit Single Price Estimating

4 Scheme Design Cost Plan

5 Detail Design Cost Control Cost Checking Approximate Estimating

6 Production Information Specification -

7 Bills of Quantities Bills of Quantities -

Elemental Breakdown
8 Tender Action Cost Analysis
of Tender