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Published on behalf of

The Royallnstilution of Chartered SUlVeyors


by Surveyors Publications
12, Great George Street, London SW1P 3AD

Prepared by the Quantity SUlVeyors Division

Printed by Harrts Print Ltd, London SW17 OBQ

RICS June 1982. Copyright in all or part of this publication rests


with the RICS, and. save by prior consent of the RICS, no part or
parts of this publication shall be reproduced in any form or by any
means electronic, mechanical, photocopying, recording or other-
wise, now known or to be devised.

ISBN 0- 85406- 169- X ISSN 0262- 9682

2
Quantity Surveyors Practice Pamphlet No. 2

Pre -contract
Cost Control &
Cost Planning

[~I
Too Q~ntity S"""""~ D_n 01
The Royal Institution of Chartered Surveyors

3
TABLE OF CONTENTS
FOREWORD 5

INTRODUCTION
1.1 Objectives 6
1.2 Fonnat 6
1.3 Preliminary Cost and Feasibility Studies 6

SECTION! COST CONTROL AND COST PLANNING


1.1 Definition 6
1.2 Objectives 6
1.3 Generally 6
1.4 Design Stages 6

SECTION 2 BUDGET
2.1 Definition 7
2.2 Objectives 7
2.3 Information Requirements 7
2.4 Methods of Preparation 7
2.5 Statement of Quantity and Quality Parameters 7
2.6 Inflation 8
2.7 Cost Control 8

SECTION 3 THE COST PLAN AT OUTLINE PROPOSALS STAGE


3.1 Definition 8 t
3.2 Objectives 8
3.3 Infonnation Requirements 8
3.4 Me\hods of Preparation 8
3.5 Statement of Quantity and Quality Parameters 9
3.6 Design and Construction Period 9
3.7 Controlllng Changes to the Cost Plan 9
3.8 Inflation 9

SECTION 4 THE COST PLAN AT SCHEME DESIGN STAGE


4.1 Definition 9
42 Objectives 9
4.3 Infonnation Requirements 9
4.4 Methods of Preparation 10
4.5 Statement of Quantity and Quality Parameters 10
4.6 Controlling Changes to the Cost Plan 10
4.7 Inflation 10

SECTION 5 COST CHECKING


5.1 Definition 10
5.2 Objectives
5.3 Principles
10
10
~
SECTION 6 ACTION AFTER RECEIPt OF TENDERS
6.1 Objectives 11
6.2 Infonnation Requirements 11

SECTION 7 SOURCES OF COST INFORMATION


7.1 Objectives 11
7.2 Sources 11
7.3 Dangers 12

SECTIONS FORMAT OF BUDGET AND COST PLANS


8.1 Objective 12
8.2 Fonnat 12

APPENDIX
Square Index 24
Density of Vertical Division 24
Example of quantity generation 25

BIBLIOGRAPHY 26

ACKNOWLEDGEMENTS 27

4
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. FOREWORD
by Roy Gibaud, FRIes, President of the Quantity Surveyors Division 1981182

This is the second Practice Pamphlet to be published in the series planned by the QS Members and Public Affairs Committee
of the Council. A number of branches have undertaken the task of writing pamphlets for the guidance of the profession and for
this one I congratulate and thank most sincerely the groups of members of the Essex County Branch for their zeal and hard
work. I would also wish to thank Mr James Nisbet FRIes for his assistance with the technical editing and Messrs R E Jones
FRIes and J A McAdam FRICS who, as members of the Practice Pamphlet Working Party, are making a major contribution to
the whole series.

5
INTRODUCTION
l.1 Objectives SECTION 4- THE COST PLAN AT SCHEME
The objectives of this pamphlet are to set out the pro DESIGN STAGE
cedures which are necessary to enable a chartered SECTION 5 - COST CHECKING
quantity surveyor to carry out comprehensive pre
contract cost control for a proposed building project SECTION 6- ACTION AFTER RECEIPT OF TEN
from the formulation of the client's brief, through the DER
various design stages until a contractor's tender is SECTION 7 - SOURCES OF COST INFORMATION
finally accepted. The procedures are not designed for
use with civil engineering projects, but may help to SECTION 8- FORMAT OF BUDGET AND COST
provide a framework which can usefully be adapted to PLANS
civil engineering needs. APPENDIX
BIBLIOGRAPHY
1.2 Format
The various sections of this pamphlet describe the steps
to be taken and the checks to be made during the 1.3 Preliminary Cost Studies and Feasibility Studies
design process to ensure that the client's budget is not
exceeded: . It is recommended, as a matter of importance, that
before and during the formulation of the client's brief,
SECTION 1 - COST CONTROL AND COST the quantity surveyor In consultation with other mem
PLANNING bers of the design team and the client, will undertake
SECTION 2 - BUDGET such feasibility studies (as defined in the RlBA Plan of
Work) as may be necessary to ensure that the client's
SECTION 3 - THE COST PLAN AT OUTLINE requirements can be reasonably accommodated within ~..
PROPOSALS STAGE the finance that is available for the project ..

SECTION 1 - COST CONTROL AND COST PLANNING


1.1 Definition be subject to the cost planning process).
Pre contract cost control is the total process which 1.2.4 To acquaint the client, if appropriate, with the
ensures "that the contract sum is within the clients "costs in use" or "life cycle costs" of the project.
approved budget or cost limit.
Cost planning is the technique by which the budget is l.3 Generally
allocated to the various elements of an intended build
ing project to provide the design team with a balanced A general principle applies throughout the cost plan
cost framework within which to produce a successful ning process that any agreed budget or cost limit is seen
design. as the maximum cost, and the quantity surveyor should
at all times work with the other design team members
to satisfy the client at a lower cost if possible.
l.2 Objectives
If at any time sums have been included in the approved
The objectives which should be achieved, in conjunc' budget for site abnormal costs, for example, which sub
tion with other members of the design team are:' sequently are found to have been wholly or partially
l.2.1 To ensure that the client receives an economi unnecessary, the consequential saving should always
cal and efficient project in accordance with the agreed be notified to the client.
brief and budget.
1.4 Design Stages
l.2.2 To make the design process more efficient thus
reducing the time needed to produce a successful References (e.g. RlBA Stage C) given in this pamphlet
design. are taken from the "RIBA Handbook of Architectural
Practice and Management" (which includes the Plan of
1.2.3 To ensure that all work arising from the client's Work). The main stages through which a project design
brief to the design team is included in the cost planning typically passes, and the links to the cost planning and
process. (e.g. the engineering services should normally control procedures, are summarised below.

Design Stages Quantity Surveyor


RlBA Stage B Feasibility Prepare feasibility studies and
determine budget
Stage C Outline Proposals Consider with client and design
team alternative strategies and
prepare cost plan
Stage D Scheme Design Carry out cost checks and
update cost plan if necessary
Stage E Detail Design
Carry out cost checks
Stage F Production Information

Stage H Tender Action Prepare reconciliation statement.

6
SECTION 2 - BUDGET
2.1 Definition 2.3.5 To the client, a report containing:
The total expenditure authorised by the client which is (i) The budget, with alternatives if appropriate.
within the responsibility of the design team.
Iii) A statement of the basis of the budget calculation
including any important assumptions made.
2.2 Objectives
(iii) A statement setting out the time for design and
2.2.1 To establish the limit of expenditure necessary construction which the budget cost will meet.
to meet the client's requtrements set out in the brief.
{iv) Cash flow forecast.
2.2.2 To provide the client with a statement of the
(v) A statement of items not included. (See Section 8
likely area and quality of building, which can be
achieved within the limit of expenditure, and of the forformal)
recommended methods of construction and contrac 2.3.6 To the architect:
tual procedures necessary to achieve the required
occupation date. (i) A copy of documents sent to the client.
(il) A more detailed statement of quantity & quality
2.2.3 To provide the client with alternative budgets
for different completion dates and quality of building, if parameters included in the calculation. (See Sec'
appropriate. tion 8 for format.)
2.3.7 To other consultants:
2.3 Information Requirements (i) Such quality & quantity parameters as relate to
The basic requirements from the client and members of their area of design.
( the design team to the quantity surveyor are as follows:
2.3.1 From the client: 2.4 Methods of Preparation
(i) Location of the site; the availability of the site for The method of preparation will depend on the type of
commencement of construction work project involved. Unusual projects, projects of great
complexity and projects containing a large element of
, (il) In conjunction with the architect, a schedule of
accommodation. alterations, cannot normally be accurately budgetied at
an early stage. For many other types of project, it is
(ill) Names of other similar buildings of broadly suit possible to build up a budget using the parameters set
able quality if appropriate. out under 2.5 below.
(iv) The required occupation date{s). The main elemental quantities of hypothetical buildings
(v) Any specific requirements relating to life cycle can easily be generated using agreed parameters, to
which rates applicable to agreed quality and perfor
costs.
mance standards can be applied. An example of a
(vi) Any specific requirements as to specification and/ method of calculating is described in the appendix.
or procedures. Once the budget has been calculated in this way it
provides the first cost plan for the project, and therefore
(vii) Requirements in respect of inflation.
the framework for the actual design to develop.
2.3.2 From the architect:
(i) Approximate location of the building on the site.
2.5 Statement of Quantity & Quality Parameters
(il) Advice on necessary minimum storey heights for
The main parameters which should normally be
specialist areas on schedule of accommodation.
included in the calculation are as follows:
(iii) Advice on likely planning conditions.
2.5.1 Quantity
(iv) Advice on likely Are Regulations. (i) In addition to the briefed areas, a statement of the
allowances for circulation etc. used to calculate a
(v) Advice on routes of public sewers etc.
gross floor area.
(vi) Architects concept of building.
(il) The number of storeys of a possible solution.
(vli) Names of previous similar projects designed by the
(Ui) The storey height{s).
practice.
(iv) The square index (see appendix) orwaillfloor ratio
2.3.3 From the services engineer:
(v) The density of vertical division (see appendix) or
(i) Advice on areas of building which will require
partition/floor ratio.
specialist engineering services.
(vi) Proportion of window area.
Iii) Advice on availability of public utility services.
(vii) Roor loadings.
2.3.4 From the structural engineer:
(viii) 'U' Values of fabric.
(i) Advice on probable ground conditions.
fix) Air change rates.
(til Advice on probable floor loadings.
(x) Heating and hot water loads.
The information from the quantity surveyor to the
design team is as follows: (xi) Lighting levels.

7
(xii) Total electrical load. prices may be adequate. Where an assessment of infla-
(xiii) Areas of the brief with special functions of signific- tion is required for more than a few months ahead, a
ant cost. range of probable inflation is best provided. This can be
calculated using predictions published by the BCIS, the
(xiv) Road area & number of car parking spaces. Architects Journal, or the PSA projections. The
(xv) Paved pedestrian areas. assumptions upon which the prediction is made may
need to be stated.
(xvi) Length of boundary walls or fencing.
Some clients, particularly in the public sector, have
2_5_2 QUality their own inflation controls. Sometimes these are
General statement of quality and specification which unrealistically low, and where this is likely to be a signif-
relates to the rates used for the budget calculation_ This icant factor, professional judgement needs to be exer-
should cover specifically the following; foundations, cised in setting the level of estimate to which the con-
roof, extemal walls, upper floors and vertical circula- trols will apply_
tion' internal vertical division, internal finishes, fumi-
2.7 Cost Control
lure, furnishing and equipment, heating services, light-
ing and other servioes. External works should include If at any time during the design process it becomes
roads, paths, landscape, boundary walls and fences, apparent that the agreed budget is likely to be
and service mains etc. exceeded, without a change to the brief, the client
2_6 Inflation should be informed and instructions requested. like-
wise, if it becomes apperent that the whole of the
The prediction of future inflation may not be necessary agreed budget will not be required, the client should
for some clients, and a statement of cost at current also be informed.

SECTION 3 - THE COST PLAN AT OUTLINE PROPOSALS STAGE


3.1 Definition (il) Indication of preferred specification for main ele-
A statement of the cost of an intended design at the ments.
outline proposal stage (RIBA Stage C) which details the 3.3.3 From the services engineer:
cost targets for the main elements of a building,
together with approxtmate quantity and quality para- (i) Outline proposals of installations indicating alter-
meters which meet those targets. native systems.
(il) Indication of preferred specification, after acoep-
3.2 Objectives tance by the architect of the visual implications.
3.2.1 To deSCribe, together with the outline proposal 3.3.4 From the structural engineer:
drawings, the chosen distribution of the resources (i) Outline proposals of altemative structural solu-
made available by the budget to provide a balanced tions.
design to meet the clients needs.
3.3.5 From the specialist consultants:
3.2.2 To set cost targets for the main elements so
that, as the design develops, the targets are checked (i) Outline proposals.
and adjustments made in order that the overall cost of
the project is controlled within the budget. The information from the quantity surveyor to the
3.2.3 To provide the whole design team with a con- design team is as follows. ~
trol document which communicates the costs, quantity 3.3.6 To the client, a report containing:
and quality parameters which are to be followed.
(i) A statement of cost.
3.2.4 To provide the opportunity for a preliminary
consideration of life cycle costs. (il) A broad indication ofthe specification.
(iii) A statement of floor areas. (See Section 8 for for-
3.3 Information Requirements mat.)
The basic requirements from the members of the (iv) A request for decisions on any alternative propos-
design team to the quantity surveyor are as follows: als.
3.3.1 From the client: 3.3.7 To the architect:
(i) Confirmation of the budget. Where alternative (i) A copy of documents sent to the client.
budgets were quoted in the budget report the (ii) The cost plan. (See Section 8 for format).
client must state his preferred alternative.
3.3.8 To other consultants:
(il) Confirmation of the design and construction times
stated in the budget report. (i) Such quality and quantity parameters as relate to
their area of design and target costs.
(iii) Confirmation of the brief.
(iv) Acoeptanoe of any other matters within the budget
report, and authority to proceed. 3.4 Methods of Preparation
3.3.2 From the architect: The method of preparation will either be by the meas-
urement of apprOximate quantities and the application
(i) Outline drawings of the building and site works of rates to the quantities generated, or from comparison
indicating alternative solutions. of the requirements with analyses of previous projects

8
i_________
of a similar character. Evaluation should be made of the team upon the design programme and the construction
alternative forms of construction, or systems, of the programme.
'key' elements, e.g. structural requirements, service Where completion dates are critical, the selection of
.installations, etc. The 'key' elements on each project components or systems should be made with a view to
will vary. However, it is anticipated that they will be there being acceptable alternatives available if there
those with the major financial conseq uences, and will should be a supply difficulty.
almost always include the structural and service ele
ments.
3.7 Controlling Changes to the Cost Plan
3.S Statement of Quantity and Quality Parameters When a change is proposed to the outline cost plan the
following procedures should be followed:
3.S.1 Quantity:
3.7.1 All relevant members ofthe design team should
(i) The areas of the accommodation divided into use be informed.
classification, (e.g. office/classroom space, sanitary
accommodation space, plant room space, circula 3.7.2 The architect should confirm his agreement, in
tion space, etc.), totalled to give gross floor area. principle, to the proposal.
(il) The storey height(s). 3.7.3 No proposal should be incorporated into the
cost plan without the agreement of the quantity sur'
(ni) Aoor loadings. veyor, and he should indicate his confirmation that the
(iv) 'U' values of fabrics. proposal can be met within the agreed elemental target.
(v) Air change rates. Where the proposal incurs additional cost over the
elemental target, or would cause the total budget to be
(vi) Heating and hot water loads. exceeded, the quantity surveyor should positively indio
(vil) Lighting levels. cate to the design team alternative savings that are
available to maintain the overall budget.
(viii ) Total connected electrical load.
3.7.4 Upon the conclusion of a proposed change, the
(ix) Road area, number and area of car parking quantity surveyor should communicate to the client,
spaces. and all members of the design team, the consequential
(x) Paved pedestrian area.
effects of the change and provide an updated cost
plan.
(xi) A schedule of those items for which lump sum
allowances have been incorporated. 3.7.S The quantity surveyor should take into account,
when considering the proposed change, the likely effect
3.S.2 Quality: on the design and construction programme.
)
A statement of quality and specification, in similar for In all considerations of alternative proposals, the use of
mat to that provided at budget stage, expanded to consultants for additional work should take into
incorporated additional information. The parameters account any consequential addition to professional
should follow those included in the budget stage, where fees. In pariicular, this applies to consulting engineers,
possible based upon the outline drawings and preferred whose fees are calculated only on specific parts of the
specifications. project.

3.6 Design and Construction Period 3.8 Inflation


In establishing the outline cost plan, the quantity sur- Where the client has been given a forward projection of
veyor must take into account the consequences of the inflation, and where this prediction is significantly
proposals made by the other members of the design changed, it should be reporied periodically.

SECTION 4 - THE COST PLAN AT SCHEME DESIGN STAGE


N.B. Where the cost plan has already been produced at an quantity and quality parameters which have been
earlier design stage only updating may be required. adopted.

4.1 Definition
A statement of the cost of a selected design at the
scheme design stage (RIBA Stage D) which details the 4.3 Information Requirements
cost targets for all the elements of a building, together To the quantity surveyor:
with the quantity and quality parameters described by
the scheme drawings and specifications. 4.3.1 From the client:
(i) Confirmation that the cost plan prepared at the
4.2 Objectives outline stage is acceptable.
4.2.1 To set out for the design team the actual dis (il) Confirmation ofthe brief.
tribution of resources described by the scheme design. (ni) Indication of any preferred alternatives given in a
4.2.2 To set cost targets for all the elements so that, as previous cost plan.
the detail design develops, the targets are checked and (iv) Acceptance of any other matters within the previ-
adjustments made in order that the overall cost of the ous cost plan report, and authority to proceed.
project is controlled within the budget.
4.3.2 From the architect:
4.2.3 To provide the whole design team with a con
trol document which describes, in detail, the costs, (i) Scheme drawings and scheme specifications.

9
4.3.3 . From the services engineer: scheme drawings and outline specification notes will be
required from the consulting engineers, from which
(i) Scheme drawings and scheme specifications. approximate quantities of equipment can be measured
(ii) DetaUed design parameters, e.g. heat loads, elec- and priced using all-in rates. Pipework and cables will
tricalloads, etc. normally still need to be priced on an overall basis
related to floor area or service points at this stage. This
4.3.4 From the structural engineer: also ensures that the likely builders work implications
(i) Scheme drawings and scheme specifications. are understood by the design team and the costs are
taken into account
(ii) Confirmation on floor loadings and the like.
(iii) Provisional indication of reinforcement weights, 4.5 Statement of Quantity and Quality Parameters
where appropriate.
4.5.1 Quantity:
4.3.5 From the specialist consultants:
(i) The areas of the accommodation divided into use
(i) Scheme drawings and scheme specifications. classification. (e.g. office/classroom space, sanitary
The information from the quantity sUlveyor to the accommodation space, plant room space, circula-
design team is as follows: tion space, etc.), totalled to give a gross floor area.
4.3.6 To the client, a report containing: (il) The storey height(s).
(i) A statement of the cost. (iii) Aoor loadings
(ll) A statement ofthe specification. (iv) 'U' values of fabric
(iii) A statement of the floor areas. (v) Air change rates_
(iv) A statement of the proposed design and construc- (vi) Heating and hot water loads.
tion programme. (vil) Ughting levels.
(v) A cash flow forecast, where appropriate. (vili) Total connected electrical load.
(
(vi) A statement of the relevant life cycle costs, where (ix) Road area and number of car parking spaces.
appropriate.
(x) Paved pedestrian areas.
4.3.7 To the architect:
(xi) A schedule of those items for which lump sum
(i) A copy of documents sent to the client allowances have been incorporated
(ii) The cost plan (See Section 8 for format). 4.5.2 Quality:
4.3.8 To the other consultants: A statement of quality and specification based on
(i) Such quality & quantity parameters as relate to scheme drawings in sulficient detail to provide control
their area of design and their target costs. of the production information drawings by the architect
and consultants.
4.5.3 Ufe cycle information:
4.4 Methods of Preparation
A statement of the likely relevant maintenance, clean-
The method of preparation should normally be by ing, and running costs which are required or implied by
measurement of approximate quantities from the the scheme design proposals.
proposed scheme drawings. The degree of detail to be
measured should be related to the cost significance of
the elements in the particular design. Ukewise, the pric- 4.6 Controlling Changes to the Cost Plan
ing should be similarly related. Some elements may still The principles have been described in paragraph 3.7.
be most suitably priced on an elemental unit rate basis,
where the cost significance is low. Major elements will
normally need to be priced in greater detail. 4.7 Inflation
The preliminary engineering and specialist services (See paragraph 3.8)

SECTION 5 - COST CHECKING


5.1 Definition 5.3 Principles
The process of calculating the costs of specific design The methods will vary according to the stage reached in
proposals and comparing them with the cost plan dur- the design process. Normally, however, this takes the
ing the whole design prooess. (RIBA Stages D to F)_ form of measurement of approximate quantities from
the consultants drawings, to provide a check on the
quantity and quality of parameters set down in the
5.2 Objectives appropriate cost plan. The gross floor area should
(i ) To allow flexibility in the design prooess for change always be the first check at any stage.
of mind, whilst maintaining overall cost control of
the project within the framework of the cost plan. The two dominant considerations in deciding the
(ii) To reduce the amount of abortive design work and priorities for cost checking elements are as follows.
lost time caused through proceeding too far in the
design process before realising that the budget will 1) The cost significance of an element related to the
be exceeded. total cost of the project

10
2) The known variability of cost of an element i.e. tively small and there are still a number of ele
where a wide range of cost is possible in an ele ments to be checked, it is usually more appropriate
ment, it will be necessary to cost check this before to advise the architect of the difference and to sug
checking elements of low variability but of the gest that no further action is taken until further cost
same overall cost significance. checks have been carried out, since these may
produce compensating amounts.
Judgement must be applied before notifying the
architect of possible excess expenditure in a par It is important for the quantity surveyor to maintain
ticular element. If an excess revealed during cost proper records of the cost checking process, set
checking is of such significance that it is highly ting down on a summary the value of the elements
improbable that compensating savings will occur cost checked compared with the cost plan targets,
elsewhere, then this must be notifed immediately and to be especially clear as to the drawings or
and the design team must be asked to consider information upon which the cost check has been
modification to the cost plan. If, however, the based.
excess (or saving) revealed in an element is rela

SECTION 6 - ACTION AFTER RECEIPT OF TENDER


6.1 Objectives (i) Indexing of the tender by BCIS to establish con-
6.1.1 To provide a contract sum within the approved firmation of tender levels, if appropriate.
budget. The information from the quantity surveyor to the
6.1.2 To provide suitable analyses for future projects. design team is as follows:
6.2.4 To the client, a report containing:
(i) A statement of the cost reconciled to the latest
6.2 Infonnation Requirements budget.
To the quantity surveyor: (il) Any further information in respect of the construc-
6.2.1 From the architect and other design consul- tion programme.
tants: (iii) An updating of the preliminary cash flow forecast,
(i) Provisional list of potential areas of saving (to be where appropriate.
considered during tendering period). To the architect:
(il) Detailed list, drawings etc., to determine actual (i) A copy of documents sent to the client.
savings, if required.
(il) A detailed reconciliation between the tender and
6.2.2 From the client: the latest cost plan.
(i) Acceptance of potential savings, if required. To the other consultants:
(il) Details in respect of any analyses required. (Where (i) Such information as relates to their area of design
the client body is a Public Authority or the like and associated costs.
where standard analyses are always required, con-
sideration of this matter should be given in the Note: See the Practice Pamphlets entitled "Tender
construction of the Bills of Quantities.) Action" (Section 5 and 6) and "Cost Analysis", for a
fuller description of the procedures applicable at this
6.2.3 From other sources: -- stage.

ilECTION 7 - SOURCES OF COST INFORMATION


7.1 Objectives (iv) Blue and buff books (Building Materials Market
To ensure that all costs used are up to date and accu- Research).
rate. (v) Building.
(vi) Cost Data Rle for the Building Industry. (BWS
Ltd.)
7.2 Sources
(vii) In-house priced Bills of Quantities.
7.2.1 Cost analysis:
(viii) Specialist suppliers quotations
(i) Building Cost Information Service (BCIS).
(ii) Chartered Quantity Surveyor, Architects Journal, 7.2.3 Published indices
Building. (i) BCIS Tender Indices and Cost Studies on Reg-
(ill) In-house cost analyses of previous projects. ional Variations.
(il) DoE (Housing and Construction Statistics).
7.2.2 Price information handbooks:
(i) Spon's - Building/Mechanical and Electrical! (iii) NEDO.
Landscaping Price Books. (iv) Architects Journal.
(il) Laxton's Price Book. (v) Building.
(ili) Griffith's Price Book. (vi) ClBS Journal.

J 11
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i
(vii) Building Services Research and Infonnation (g) High levels of inflation demand constant checking
Association (BSRIA) Statistics Bulletin. of rates and prices.
(h) Assumption that cost infonnation in cost analysiS is
7.3 Dangers tendered price infonnation, when a significant
amount could be in prime cost or provisional
The following items should be taken into account when sumS.
using any of the above infonnation.
0) Initial quotations from specialist suppliers etc. are
(a) Differential rates of inflation on various aspects/ likely to be low.
elements of the building.
(k) Building regulations can be statutorily amended,
(b) Acute shortages in specific trades at different times. e.g. energy conservation measures have increased
(c) Regional variations. the 'U' value requirements for roofs and walls.
Care must therefore be taken to ensure that the
(d) Market conditions of analyses. analysis used is consistent with current building
standards.
(e) Careful consideration of external published infor
mation. (I) Rnn priced or fluctuating contracts.
(f) Consideration of tender period and its relationship (m) Special planning conditions applying either to the
to the tender period of the analysts. analysed or to the current project

SECTION 8 - FORMAT OF BUDGET AND COST PLANS


,1 Objective sions and exclusions, together with the total prog
(
8.1.1 To communicate clearly to the client, architect ramme to which the budget relates and the standards
which have been used in its calculation. They are client
and consultants the basis of the budget and cost plans. orientated. Provision is made for the chartered quantity
surveyor to suggest alternatives which the client may
8.2 Format wish to consider. If life cycle costs are to be prepared,
the client should be given this infonnation and page 11
The presentation of infonnation to the client and design is a simple guide to this. A copy of infonnation sent to
team should be of a high standard. The budget and the client should nonnally be sent to the architect. In
cost plans are the res.ult of the application of a high level addition the architect should receive the infonnation
of professional skill, and the fonnat of documents contained on pages 5 to 10 when the cost plan is pre
should reflect the importance that the profession pared. These are architect orientated. They should
attaches to this service. clearly set out the main parameters affecting the cost
targets.
The example of fonnat included in this pamphlet is
intended as a guide to good practice showing the main The precise level of detail to be included in these
areas of infonnation that may require coverage. The documents should relate to the size and complexity of
first 4 pages of the example are intended as a guide as projects. Simple projects may require less infonnation
to what can be provided to a client to ensure that there than shown in the example, complex projects signifi
is clear statement of the budget or cost limit, its inclu cantly more.

12
CONSTRUCTION BUDGET AND PROGRAMME
CLIENT

PROJECT

Budget serial number: ..................................... .

COSTS (for basis see sheet .......... )

Price base date: ..................................... 19 .. .

New building work:

Site works:

Alterations:

"y\,~,,~ AT TENDER

costs payable to
construction period

,NC:'TI>ITrTllf"lN COSTS AT COMPLETION

~~3IOI"ALFEES OF ALL
T ,,"J'T''' including expenses

VALUE ADDED TAX- On construction , .............. %

On fees ..... , ..... , .. , .. , .... %

TOTAL BUDGET OF CONSTRUCTION


WORK AND FEES ====
Exclusions from budget

............................................................................................................... .

13
TIME

Preliminary/Final Programme (weeks)

as Budget Cost Alternative 1 Alternative 2


Client decision to accept budget and proceed o o o
Rnal brief and scheme design approved .......... .
Receipt of first tenders
Formation of contract
Construction commencement .................. .
Client occupation: phase
: phase
: phase
: phase
Total Cost Variation (including fees)

Contractor and/or Construction implications of programme

The alternative time scales shown make the

Alternative 1

Alternative 2 ()

CASH FLOW-

Quarterly from acceptance and authority to proceed (including fees)

1Q 2Q 3Q 4Q 5Q 6Q 7Q 8Q 9Q 10Q llQ 12Q Balance Total

As Budget Cost
Alternative 1
Alternative 2
NOTE: All figures in thousands
Construction commencement quarter indicated by 'C'
Occupation quarter indicated by '0'
Balance shown normally payable during first year of occupation

14
BASIS OF BUDGET
Areas

Area m 2 Min. floor to Max. floor


Schedule of Accommodation ceiling ht- m(ft) Comment
(sq. ft.) kN/m'

TOTAL FLOOR AREA


Quality Standards
External elevations:

Internal finishes:

Heating & ventilation:

,t
,
j
.
(]

,,I Lighting:

Site works:

--j

Other (specify):

Exclusions from budget:

15
Alternative Standards

Cost
Alternatives Comment
Extra/Saving

Budget prepared by: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __

Signature: Date:
Hrm:

16
TECHNICAL QUANTITY AND QUALITY PARAMETERS

(Budget serial no. . ..................... )

BUILDING
Block: ..........................................

Quantity
Gross floor area: ......................... m2
Maximum square index: ........................ (Perimeter on plan ... . . ..................... m)

No. of storeys: ............................ Floor to ceiling heights: lowest m


............ m
.............. m
Floor/roof zone:
Calculated external wall/floor ratio: ............ .

Proportion of glazed external wall area: ............. 0/0


Density of vertical division: .............................. .
measured over door openings: ............................. .
Calculated partitionlfloor ratio: ............ .
of partitions and internal walls

lifts: ............. No. Type:


Stairs: number of flights: ............. No.

Structural
Ground bearing pressure: ........... .
Ground water level: .................... .
Floor loadings - Ground: .......... . . .. .kN/m' (maximum live)
Intermediate: .... . . ......... .kN/m' (maximum live)
Highest: ...... . . ....... .kN/m' (maximum live)

Roof loading:

Environmental
Fabric 'U' values: Roof: .............. ...W/m'oC
............. .W/m'oC
............... .. .W/m'oC
Air change rates
(Specify spaces and mmum temperatures)

Heating load: ................... klW ( ........... W 1m')


Hot water load: .................. klW
Conld ...

17
TECHNICAL QUANTITY AND QUALITY PARAMETERS (Contd.)

Ughting levels
(Specify spaces, lux level and load in W/m')

Total lighting load: ............... klW ( ........... W/m')


'Total powerload: ................ klW ( ........... W/m')
Special areas with higher than average service or other costs (specify)

Other:

External Works

Site area: .................... hectares

Road area: .................. m' Number of spaces: ....................... No.

Area: ................................... m 2

Pedestrian paved areas: ......... .

.. ,undary walls or fencing:

Other:

(If quantities calculated state drawing number(s) etc: ...... , ................................... .

...................................................................................................)

18
SPECIFICATION Block: .. , ........... ~., ........ . ................
Specification included in +or -
Alternatives
Elements budget/cost

Substructure

External walls
and windows

Roofs

Upper floors/
stairs/lifts

Internal vertical
division

Internal finishes

Fittings etc.

Contd ...

19
SPECIFICATION (contd.)

Elements
Specification included in Cost + or-
budget/cost plan Alternatives
Hot and cold
water selVices/
sanitary fittings/
internal drainage

. Heating and
ventilation

lighting and
power {

Other selVices

Road and
vehicle parks

Paved areas
and landscape

Drainage

20
@@
COST TARGETS

.Block: ...................................... . Price base: ................. 19 ... .

Target cost Cost per


Elements Parameter Rate m'
q

COST TARGETS

Block: ...................................... . Price base: ................. 19 ... .

Target cost per


Elements Parameter Rate m'

22
~
Cost types: ReD = redecoration S = servicing
LIFE CYCLE COSTS
C = cleaning E = energy
Building or Block: R = repairs
Regular costs Replacement costs Present value of
Annual
~TYpe (state approx. (state approx. costs at ... % over II Alternative Present
costs period year) maximum of specifications value
,,\\\nJ. \," \11 L ....... years

Roofs

External walls

Windows

External doors

Roars

Walls

Ceilings

Ughting

Ufts/escalators

Landscape

TOTALS

""w
APPENDIX
,
Square index
This index is simply a way of describing the degree to which
the perimeter length of an actual building exceeds that of a
building of the same area which is a perfect square. Any
single storey building can be described, as also can multi
storey buildings, with a constant shape at each floor.
Formula s =--.E.-4a where P = Perimeter length
V4a on plan
a = Area on plan
(not the gross floor area
in multi storey buildings)
s = Square index.

Density of vertical division


This density provides a coarse measure of the amount of
partitioning, loadbearing walls etc. that a building contains.
As the formula includes the perimeter of the building, it
. takes into account the contribution to the enclosure of
spaces that this makes.
Formula d = (liz Ip) + L where p = sum of the perimeter lengths
A of a building measured (
at each Boor.
L = total length of partitions etc.
measured over doors.
A = gross floor area.
d = density of vertical division.

24
Example of quantity generation for a hypothetical building
Assumptions
From brief, gross floor area (A): = 1350m' (including circulation)
Site area dictates a two storey solution (n) = 2 storeys
Average floor to ceiling height: 2.7m
Assumed floor/roof zone: 600mm
_1 Square index (s): 1.4
Density of vertical division (d): .3
Area of ground floor (a) =675m'

Calculation of Quantities

Element Formulae Calculation Parameter

S ubstructure .A. 1350 = 675m'


n 2

'Upper floors n-1 r)-


n
area?f stair
openmgs
[2-1) (~)] - 40 - 635m'

Roof Ji + .3(4sVa) 1350 + .3(4 X 1.4 V675) = 718m'


n (.3 is assumed wall width) 2

Extemal walls n(4sVa) 2(4 x 1.4 V675) (2,7 +.6) = 960m'


(incl. windows & X (Floor ceiling ht +
e xtemal doors) zone)
J (see note.)

Intemal dA - nl4svAl (.3 x 1350) - 2(4 x 1.4V6'75)


v ertical 2 2
di"vision x Floor to ceiling x 2.7 = 7oom'
height
1((
1 '

G ross floor 1350m'


area

The quantities calculated in this, or similar ways, can then be used with selected Element Unit Rates to calculate budgets and
cost plans for projects in the earliest stages of design, or for checking the approximate cost difference of altemative design
solutions.
N.B. A percentage can be used to split 'wall' from 'window'.

25
BffiLlOGRAPHY
Books Building economics: appraisal and control of building design
cost and efficiency. Seeley, I. H. Macmillan, 1972_ 5_00
Estimating and cost control
Nisbet, Batsford 1961. Cost planning and building economics. Cartlidge, D. P_
Hutchinson, 1973_ 2.50
Pre-contract practice for architects and quantity surveyors_
5th ed. (metric) RJBA Handbook of architectural practice and management.
Aqua Group. Crosby Lockwood Staples 1974 2.50
Building cost control techniques and economics. ArticJes/Papers
Bathurst, P_ E. and Butler, D. A. Heinemann 1973 5.75 Cost estimating service combines two broad data bases.
Brager, E. Architectural Record (4) April 1979, 73-75 (2)
National standard control procedures for house construction (Abstract 24971)
costs.
Eire: An Foras Forbartha, 1979, 2.00 A framework for cost exploration and strategic cost planning
in design.
Estimating in building and civil engineering. Proceeding of Brandon, P. Chartered Surveyor Building and Quantity
conferences held on 20 September 1973 and 22 and 23 Surveying Quarterly 5 (4) Summer 1978, 60-63.
March 1974 at Loughborough University.
Department of Civil Engineering ed. by R. McCaffer. Costs and standards for new public sector building_
Northwood Publications 1975 2.50 Budd, R. Housing Review 25 (2) March/April 1976, 33-37
(5) (Abstract 20362)_
. Estimating for building and civil engineering works 6th ed.
Geddes, S. Newnes-Butterworths 1976 13.00 Cost planning the design process.
Smith, G. Chartered Quantity Surveyor 3(1) August 1980,
Cost control in building design: a programmed text 13-16_
~,eat Britain Ministry of Public Building and Works:
uie Directorate of Building Management The construction control estimate.
HMSO 1968 1.50 Cowley, J_ Chartered Quantity Surveyor 2(4) November
1979, 78-82 (5) (Abstract 25666).
Cost control manual
National Public Works Conference 1977. Initial cost estimating: cost of warehouses.
Davis Belfield and Everest. Architects' Journal 165(22) 1
An introduction to cost planning June 1977,1037-1042 (6) (Abstract 21934).
IDCS 1976 4_00
Initial cost estimating: cost of factories.
Building economics and cost planning. Davis Belfield and Everest. Architects' Journal 166 (37)14
Browning, Batsford 1961. Sept 1977, 509-516 (8) (Abstract 22413).
Cost Planning of buildings Initial cost estimating: the cost of housing.
Ferry, D. J. and Brandon, P. Granada 1981 6.95 Davis Belfield and Everest. Architects' Journal 167 (68 Feb-
Aspects of the economics of construction ruary 1978, 265-274 (10' (Abstract 23028).
Turin, D. A. Godwin, 1975 6.50 Initial cost estimating: the cost of flats and maisonettes.
Estimating for residential construction. Davis Belfield and Everest, Architects' Journal 167 (22) 31
Van Orman, H. Van Nostrand Reinhold, 1978 8.90 May 1978,1059-1071 (13) (Abstract 23386).
Initial cost estimating: shops.
Engineering services cost planning and control policy state-
Davis Belfield and Everest, Architects' Journal 168 15
ment. November 1978, 945-956 (12) (Abstract 24145). .
;; 1963
Initial cost estimating: offices.
RICS Nottingham Conference No.3 Project cost control. A.
Davis Belfield and Everest, Architects' Journal 170 (28) 11
C. Southwell, FIDCS. Running costs of buildings - the sig-
July 1979, 81-94 (7) (Abstract 25251).
nificance of running costs in the cost planning and design of
buildings. 1967 (out of print). Control of costs allowances for uncertainty.
Duff, A. R. Building Technology and Management 14(7)
Building and public works administration estimating and July/August 1976, 19, 45.
costing. Geddes, S.
Newnes, Butterworths. 1967. 6th edition. 3.50 A new look at estimating the cost of repetitive work.
Duff, R. Building 236 (7084 20 Apru1979, 56-58 (3) (Abs-
Purchasing in the construction industry. tract 24805)_
Dand, R. and Farmer, D. Gower P_ 1970. 4.25
Initial cost estimating: hotels.
Estimating building construction: quantity surveying. Farrington, N. and De Vaal, D. Architects' Journal 169 (12)
Hornung, W. J. Prentice Hall, 1970_ 5.50 21 March 1979, 601-609 (9) (Abstract 24709).
4 Building cost forecasting: selected papers on a systematic Cost planning.
1 approach to forecasting building costs. George, W_ H. Building Economist (Journal of the
Southwell, J. IDCS. 1971 3.00 Australian Institute of QS) 12 (3) December 1973, 148-158
(11) (Abstract 16927).
Cost study, pre-tender stages of the building process. Quality and total cost in building and service design - a case
Building Bulletin 4. HMSO, 1972 study.
Cost-in-use: a guide to data and techniques. Hoskins, B. J. and Read, J. Building Services Engineer 45
HMSO, 1972. 0.90 (6) September 1977, 93-103 (11) (Abstract 22411).

26
Assessing the economics of building: proceedings of sym Client time and cost control with network analysiS.
. posium Dublin 1921 June 1974. Kennedy, W. B. Anson, M and Myers, K A-
Intematio~a1 Council for Building Research Studies and Building Economist 9 (3) November 1970. pp 82
Documentation. Dublin: An Foras Forbatha, 1974. 92(11)(Abstract 12012).
Control is on the shop floor. Categories for information considered, 4 categories and
Jackson, T. Chartered Quantity Surveryor 1 (4) April 1979, non contract documents, 1 Cost analyses and cost planning.
107111 (5) (Abstract 24802). Building221 (6685) 2 July 1971 pp5761(5).
Cost planning and the future. Controlling the costs of engineering services in buildings.
January, M. Building Economist 16 (3) December 1977, Berryman, A- Chartered Surveyor 104 (2) August 1971 pp
142145 (4) (Abstract 23143). 8184 (4).
A cost model for reinforced concrete frame design: cost
comparison and decision making.
Moore, G. Chartered Quantity Surveyor 2 (3) October
1979,4044.
ACKNOWLEDGEMENTS
Cost control from inception to completion in public officers
committee: Value for money - the economics of land and The Quantity Surveyors Divisional Council of the Royal
building. Institution of Chartered Surveyors is greatly indebted to the
Nott, C. M. Rles 1971. follwing members of the Essex County Branch who Were
responsible for preparing the text of this Practice Pamphlet.
Construction finance and cost escalation.
Perry, J. G. ICE Proceedings 62 (1) November 1977, R H Ashbee FRIes MIOB
623642 (11) (Abstract 22727). N Clark FRICS AM.BlM
t t0. Project cost control by sensitivity analysis.
..':onstruction Surveyor 8 (27) JanuarylMarch 1978, 1415
C J E Dove FRIes
F A Shaw FRIes
QS Weekly 8 September 1977, 34 (2) (Abstract 22502). G AJSmith ARIes Dip(CE)
On the cost modeL
Reynolds, G. Building 235 (7059) 20 October 1978, 91:
(7060) 27 October 1978, 67 (2) (Abstract 23918).
Economy in building - the role of the chartered quantity
surveyor
P. W. Grafton RlCS 1965.
European practice in controlling construction costs.
Glendinning, N. J.Germany; Osborne, J. G. Netherlands;
Trouilloud, L France. Rles 1973.
Cost planning for control.
Sherran, R. Cost Engineer 16 (6) November 1977,47
Financial management in reaction to refurbishment con
tracts.
Smith, P. A in Managing the nation's land resources. Rles
1976.
!roject cost control
Southgate, A C. in The economic life of buildings. Rles.
Estimates of uncertainty.
Stacey, N. Building 237 (7110) 19 October 1979, 6364 (2)
(Abstract 25667).
Counting the cost.
Watson, B. Building Services 2 (2) February 1980, 4243
(2) (Abstract 26215).
The influences of tendering methods on engineering costs.
Watson, B. Chartered Quantity Surveyor 1 (5) May 1979,
149151 (3) (Abstract 24970).

Cost planning and cost control


Nisbet J. Architect's Joumal3rd, 10th and 24th November,
1965.

Building decisions and economic appraisal techniques in


practices.
Heming, M. C. Building 218 (6622) April 17, 1970 pp
7378 (5) (Abstract 10847).

27
" > '.'-' .' ,-".,