1.

0 Introduction to Elemental Cost Analysis

Elemental Cost Analysis is prepared by designers and clients for the use of future project
so that they can make comparisons between two or more buildings. Purpose of the cost analysis is
to provide data, which ensure comparisons can be occur between costs to achieve various building
functions in the project with those of achieving equivalent functions in other projects. It is an
analysis of building costs in terms of its elements. Purpose of an element for cost analysis is defined
as a major physical part of a building that meets a specific function or function regardless of design,
specification or construction. However, list of elements is a compromise between this definition
and what is considered practical.

Cost analysis allows for a range of detailed stages which related to the design process;
broad costs for types of building is required in the early stages and gradually more detailed is
required when the design is developed. The elemental cost is related to the square meter of gross
interior area of the floor as well as to the parameters that are better known by the elemental
function, which is the quantity of the unit element.

1
2.0 When to Use Elemental Method?

This type of budget is suitable to use in comparing the design alternatives which generated
by architects. It is important that client has a budget and wants to choose the most economical
design that will not stretch the initial budget. If you need budget for financial or presentation
purposes, for example presenting your building plans to the potential investor, financier or sponsor,
the elemental estimate is the best estimate that will attract the financier, as it shows the cost of
building elements in detail.

Quantity surveyors can check the costs during the designing stage before prepare Bill of
Quantities with an elemental cost plan. If a customer has a certain budget in mind, the architect's
specification needs to be adjusted to fulfill the budget of client.In planning stage, many
adjustments will be required by architect and quantity surveyor. For architects, this involves a lot
of redrawing and for quantity surveyors; this involves adjusting the cost items within the budget.

2
3.0 Advantages and Disadvantages of Elemental Method of Estimating

Elemental cost analysis is to analyze the costs associated with elements, in the construction
industry of a building or any kind of construction that we can divide into several elements, and the
price that is associated with the element called as elemental cost. Examples of elemental costs are
material cost, labor cost and subcontractor overhead and profits. However, there are some
advantages and disadvantages of elemental cost analysis.

Advantage of elemental cost analysis is it is easy to understand. It makes sense to the people
that involved in the project as it demonstrates cost breakdown by building elements. Besides that,
elements that take the most cost can be identified easily and can be adjusted as needed. Elemental
cost analysis is also good for cost planning. For example, architect is advised to keep the budget
of client in mind when designing or optionally, client can choose an affordable design between
alternatives designed by architect and priced by quantity surveyor. Moreover, advantage of
elemental cost analysis is quantity surveyor can review the elemental costs through all design
stages, which making them more reliable estimate than superficial area methods. In addition, this
estimate is much more closer to the tender value than the superficial area method since all major
elements of the building are analyzed, and linked to the BOQ items. Planning an adjustment by
architect and re-pricing by quantity surveyor during the design stage eliminates many pre-tender
and post-tender BOQ amendments.

Disadvantage of elemental cost analysis is plan adjustments and constant cost checking in
the early stages takes a lot of time especially for engineers and quantity surveyors. Architect and
quantity surveyor involved in the early stages need to be well versed with the cost implications of
design specifications for examples building materials, construction technology, plan shape and so
on. Besides that, more work is needed in adjusting Item Elemental Rate Build Up for BOQ linking.

3
4.0 Comparison between Elemental Cost Analysis and Cost Benefit Analysis

Among of many types of cost analysis, some comparison between Elemental Cost Analysis
and Cost Benefit Analysis has been chose.

Elemental cost analysis is prepare by designers and clients for the use of future projects so
that they can make comparisons of costs between two or more buildings while cost benefit analysis
estimates and sum up the equivalent money value of the benefits and costs to the project
community to determine whether it is worth or not. Example of the projects of elemental cost
analysis is for building projects whether it is residential, commercial or industrial while examples
of cost benefit analysis projects are dams and highways or can be training programs and healthcare
systems.

Besides that, elemental cost analysis is easy to understand especially for people that
involved in the project as it demonstrates cost breakdown by building elements while cost benefit
analysis is easy to understand through benefits outweigh costs, which all involved will understand
the monetary nature and ongoing situation of the project. In addition, cost benefit analysis can be
used in various scenarios, locations and more.

Elements that take the most cost can be identified easily and can be adjusted as needed in
elemental cost analysis while amount of subjectivity for intangible costs and benefits are increased
when they had been identified, quantified, and estimated.

4
5.0 The application of Elemental Cost Analysis

Before we begin with the elemental cost analysis, we need to identify a few area which are
the circulation area, usable area, and ancillary area. Circulation parts is the sum of all areas on all
floors of a building included within the outside faces of its exterior walls, including floor
penetration areas, however insignificant, for circulation and shaft areas that connect one floor to
another. Usable area stands for Net internal area (NIA) or usable floor area, UFA. The NIA is the
Gross Internal Area, GIA, less the floor areas taken up by lobbies, enclosed machinery rooms on
the roof, stairs and escalators, mechanical and electrical services, lifts, columns, toilet area, ducts,
and risers. Ancillary includes sheds, garages, gates, fences, walls or other means of enclosure.

The application of Elemental Cost Analysis divided into 3 forms, where form 1 contains
the information of the total project and information on the analyzed building, form 2 is the
summary of the element cost, and form 3 will be the brief specification of the elements of the
building. Few basic principles needed to be applied while preparing the cost analysis of the
building.

Firstly, the building which is within the project shall be analyzed separately. As an
example, if there are four buildings in the project, the buildings shall be analyzed separately.
Secondly, the prepared information will facilitate the preparation of estimates based on the
abbreviated measurement. This shall consist of drawings with provided specifications of the
element. Analysis shall be in stages, where each stage consist of adequate details such as total
detailed cost for every stage. The mentioned cost shall be equal with the cost of the relevant group.
Lastly, preliminaries shall be dealt with as a separate item.

In this assignment, we carried out a study on a project which is based in Malaysia, a

community mall, Gamuda Walk Kota Kemuning. The gross floor area of this building is
6096.70𝑚2 . The mall is divided into few parts, the circulation area with the size approximately
3036.73𝑚2 , usable area 2002.37𝑚2, internal divisions, 920.90𝑚2 and ancillary 136.70𝑚2 .
Below shows floor plan of the building from ground floor to upper roof plan.

5
Figure 1 Ground floor plan

Figure 2 Level 1 floor plan

6
Figure 3 Level 2 floor plan

Figure 4 Level 3 floor plan

7
Figure 4 Level 5-7 floor plan

Figure 5 Lower roof plan

8
6.0 Form 1 – Information of the total project and analysed building

As mentioned earlier, form 1 contains the information of the total project and analysed
building. This form is divided into 2 sections, where the first section provides overall information
on the project including its location, the client, and the type of contract. Second section prsent the
information and analysis of a single building. Each separate building will be having a different
analysis. The purpose of this form is to present in detail for the reader on the project background
information and the condition of its price level. This is to enable the user to nmake a necessary
ammendment or adjustment of price according to the project’s location, market condition, the type
of contract, the size of the contract and the project specifications.

The figure below shows the form 1 filled in for the mall. This community mall is under
code 3 which is the code for administrative building, according to the building type and code. The
construction class for this building is A–10- 41964 , where class A is reinforced concrete framed
construction, 10 levels and gross floor area of 42964𝑚2 . This project is a proposed 10-storey
multi-purpose building with 2 floors for basement parking, commercial area from ground floor to
2nd floor and office area starting from 3rd floor to 5th floor. This project tender was published on
the 3rd January 2013. This tender is an open tender and comes with bill of quantities. From the
figure below, it is stated that the client set the contract period to 20 months.

No cost fluctuation are mentioned in this form, somehow the cost such as provisional cost,
prime cost sum, preliminaries cost, contingencies cost and contract sum are included. Prime cost
is an allowance calculated by the consultant for any materials that will be provided by the sub-
contractor. Provisional sum is also an allowance estimated by the cost consultant for any specific
element of the works that are not defined with adequate information for the tenderers. Preliminary
cost will be the expenses that will incurred during the construction period, which does not include
any cost such as overheads, labors or any related cost. Contingency cost refers to the cost that may
be occur based on the previous project which is almost the similar with the upcoming project. The
contract sum is the agreed price by the contractor once they entered the contract. Usually, contract
cost will be investigated carefully to prevent errors once both parties accepted the contract.

9
 Figure 6 Project and contract information

Apart from that, form 1 indicates the type or design of the building, the distribution of
space for accommodation of the building. Each gross floor area needs to be shown separately as
the building itself accommodates more than one function. As shown earlier, drawing of the
building were included. In case no drawing of the building is included, we can propose a thumbnail
sketch. As an example, by assuming the building itself in oval shape, with different
accommodation, 2 basement parking, 3 floors for commercial area, and 3 floors for office.

10
 The below figure shows the accommodation and design features of the community mall.
As stated in the form, this building is in oval shape multi-purpose commercial building with 10-
storey tall, comprising of 3-storeys of commercial area, 7-storeys office and 2-storeys of basement
car park. The gross floor area for each accommodation were calculated separately. Internal division
is the area which are occupied by partitions, columns, internal structures or party walls.

Figure 7 Design and shape information

11
7.0 Form 2 – Systematic breakdown

After each information in form 1 are done, form 2 will be containing a systematic
breakdown of the cost of elements of a building. In this form, there are about 20 elements and each
element are classified under 7 group of elements, which means five building groups and one for
each group of element of external work and preliminary work. This form provides information on
the total cost of elements, cost per meter square, element for unit quantity, element unit rate, ratio
of element per gross floor area and more in order to prepare a realistic estimation for cost plan of
the project. This form is also can be used as comparisons in order to determine the estimated cost
does not exceed the budget.

Figure 8 Summary of element cost

12
 The above figure shows the summary of the element cost of the project. Each element are
grouped under different group. As an example, finishes comprises of internal finishes, external
finishes and other type of finishes. Total cost of element shall be in “RM” where it represents the
total cost of elements according to the list and contents of elements in the manual. Let say the cost
does not related to any element, we can put “-“. The cost per meter square is calculated by dividing
the total cost element with gross floor area. As an example, the total cost element of internal wall
finishes is divided with the total gross floor area to get the cost of the finishes per meter square.

Element unit quantity in the above table comprises all areas which are the net areas, such
as area for external wall which omits the window and door area. The quantity is measured in
volume, calculated by multiplying the net area with the height of the air conditioned area, in cubic
meter. In each columns, the element unit in quantity will be different. As an example, for
reinforcement, it is shall be in kg and formwork shall be in meter square. The figure below shows
the equation for each preliminaries. In addition to that, any external works such as site works,
drainage, external service and more has no element unit quantity.

Figure 9 Calculation

13
8.0 Form 3 – Brief specification

Form 3 provides brief information on the project specifications based on each element
stated. Not only that, it describes briefly on the different components in each elements comprising
the types and quality of material used. Form 3 illustrate the building standards including its quality
as this information is crucial in cost comparison. Referring to the figure below, elements of the
building are classified into separate groups. Each elements has their own specifications which are
according to the provided bill of quantities. As mentioned earlier, each specifications gave a clearer
vision of the building which resulted in cost comparison.

Figure 10 Brief specification

14
9.0 Conclusion

Element Cost Analysis (ECA) is relevant to used. Cost analysis is prepared by reviewing
the project information that has been planned or constructed where quantity bills have been priced.
Therefore, cost analysis is prepared based on data received from successful tenders. It is not based
on the actual sum of projects and the price quoted in the Final Account. It is possible for some of
the parties to think that it is better to analyze the actual cost as compared to the predicted costs in
the tender.

15
 References

Candy. (n.d.). Elemental Cost Analysis User Manual.

http://ccshosts.com/version2/manuals/Elemental%20Cost%20Analysis%20User%20Manual.pdf.

Methods, A. o. (n.d.). Elemental Method of Estimating – Advantages and Disadvantages

[Building Construction] . Retrieved from Building Cost Estimating, Quantity Surveying, Plan
Takeoff and Measurement of Construction Work : http://estimationqs.com/elemental-method-of-
estimating-advantages-and-disadvantages-building-construction/

O'Farrell, R. (n.d.). Advantages & Disadvantages of Cost Benefit Analysis. Retrieved from
Chron: http://smallbusiness.chron.com/advantages-disadvantages-cost-benefit-analysis-
10676.html

Pang, K. (2017, July 1). Elemental Cost Analysis. Retrieved from Slide Share:
https://www.slideshare.net/KaiYun96/eca-workshop-presentation

Understanding of Element Analysis Cost Construction Essay. (n.d.). Retrieved from

Hstreasures: https://hstreasures.com/understanding-of-elemental-cost-analysis-construction-
essay-4109/

wendyteosy. (2016, December 3). Elemental Cost Analysis. Retrieved from Slide Share:
https://www.slideshare.net/wendyteosy/eca-presentation-69784909

Wilson, A. (2016, July 7). Elemental Cost Analysis. Retrieved from Slide Share:
https://www.slideshare.net/arthurwilson18/elemental-cost-analysis-63811299

16
Appendix

Appendix I

Appendix II

17