1/9/2021

2 Cost Modelling
Introduction
 Definition
The symbolic representation of a system, expressing the content in
terms of the factors which influence its cost.
BNV6100 Cost Management - 2
 Model attempts to represent the significant cost items of a cash
flow, building/ component in a form which will allow analysis &
1 prediction of cost to be undertaken.
Mr. S.Kalananthan BSc (Hons) QS&CM, MBA in PM,PMI

Lecturer | CM - Module leader

3 Cost Modelling 4 Method of estimating

Traditional techniques
Estimating

Multi-rate methods/ later

Single rate methods
stage estimating

Budget setting techniques Budget distribution techniques

Unit method Approximate estimating
Cube method Elemental estimating
Storey enclosure unit method
Superficial area method

1

5 Unit method (cost per functional unit )
Estimate = Std. Units of accommodation x Cost / Unit
 Schools, universities, colleges – per student.
 Hotels, hospitals – per bed.
 Offices – per workstation.
 Restaurants, cafeterias – per seat.
 Car parks – per car space.
7 Unit method Cont.….
 Adjustments are made for
 Site conditions
 Specification changes
 Market conditions
 Regional changes
 Inflation
 Used mainly for budgetary purposes
1/9/2021
6 Unit method Cont.….
 Unit rate is obtained from fairly recently completed
buildings of same type, size and construction
 Building Cost Information Service (BCIS) and published
sources of building cost information
 Used at very early stages where the building’s client
requires a preliminary estimate based on little information
 Can be used when purpose or function of building is
known
 No drawings or specifications
8 Cube method (cost per cubic meter)
 Estimation = Volume x Unit cost (Cost /m3)
= External plan area x Height x Unit cost (Cost/m3)
 Uses the volume of the building and restricted to initial stage of
the design
 Calculation of volume is subject to rules of measurement
 Measured from external faces of external walls
 The height is measured from the top of the foundations to half-
way up the slope of a pitched roof; or in the case of a flat roof, to
0.61 m above the level of the roof
 Special items should be excluded and added to calculated overall
cost
2
 1/9/2021

9 Storey enclosure method - Rules for calculation
are as follows
Floor areas are measured from the internal face of external
walls and are subject to the following weightings:
Basement x 3.00
Ground floor x 2.00
First floor x 2.15 and thereafter add 0.15 for each successive
floor
 Roof area are measured to the extremities of the eaves and
are measured as the area on plan whether they are pitched
or flat and applied weighting factor of 1.00 to the roof area
10 Storey enclosure method - Rules for
calculation cont.…
 External wall areas are measured on the external face of the
wall and are subject to the following weightings:
 Basement wall area x 2 (basement floor to ground floor
level)
 Above ground wall area x 1 (ground floor to ceiling of
top floor with no deduction for openings)

11 Storey enclosure method 12 Why did the Storey enclosure technique fall into
disuse?
 Very little application in practice and involves greater  Far more calculation than either the superficial or cube
calculations method
 Takes into account of differences in – plan shape, total floor
 No rates for this method are published
area, vertical position of the floors, overall height, storey height,
extra costs of providing usable floor areas below ground, etc..  Cost planner would need to spend considerable time in
 Less helpful when considering client and architects
calculating suitable rates from past projects
requirements  Does not relate client requirements to the actual design
 Difficult to assess the effect of changes to spec  It was superseded by the elemental method
 It uses weightings to various cost elements
 Cost of external work etc… can be added

3
 1/9/2021

13 Superficial method (cost per square metre)
Estimate = Area of each of the floor x Cost per m2
 Measured to internal face of external walls
 Measured over stair wells, internal partitions, columns and
the like
 Special item should be excluded & added to overall cost
calculated
14 Superficial method (cost per square metre)
 Most popular methods
 Commonly used during the early stages
 Can only be used when the floor area of the building can
be assessed or measured reasonably accurately from
drawings
 GFA of the building in square meters is multiplied by a
suitable rate per square meter

15 Superficial method - Measurement of the GFA 16 Cost Modelling

(RICS, 1969) should include:
Traditional techniques comparison – Single Rate
 All area occupied by partitions, columns, chimney breasts,
internal structural or party walls, stairwells, lift wells and the like  Cubic metre
 Lift, plant and tank rooms and the like above the main roof slab  Square metre
 Sloping surfaces such as staircases, galleries, tiered terraces  Storey enclosure
and the like should be measured flat on plan  Exercise 05
 Any spaces fulfilling the functional requirements of the building,
which are not enclosed spaces (e.g. open ground floors, open
covered ways and the like)
 Private balconies and private verandahs

4

17 Cost Modelling
Traditional techniques - Single Rate
 Single price methods do not take account of
 Change in specification
 Site/ location issues
 Change in plan shape/ storey height
 Only used for the very early budgets
19 Approximate quantities method
 Most reliable technique
 Not a single price estimating method
 Well-developed design and detailed specification
information for their accuracy and for this reason can only
be used in the detailed design
 Needed to measure reasonably accurate quantities for
an element, or a group of elements
1/9/2021
18 Preliminary estimating as budget distributing
techniques
 Elemental method
 Flexible and can be adapted to suit the level and complexity of
information available
 Earlier this method is used for gaining an accurate
assessment
 Earliest stage the project can be reasonably priced
 Initially using the group elements
 Translating this into the standard list of elements
 Continuous review of the elemental estimate as the design
progresses through the various stages
20 Approximate quantities method rule of
measurement
 Rule of measurement are simple as it involve grouping
together items relating to a sequence of operations and
relating them to a common unit of measurement
5
 1/9/2021

21 Elemental method 22 Cost Modelling

 Developed method of storey enclosure method, which Traditional techniques – Multiple Rate
considers certain major elements separately Elemental cost
 Elemental Cost Analysis =
 Estimate in elemental form is prepared – overcome the total floor area

disadvantage of the preliminary estimating methods  Example for elements

 Form of construction, material & labour content, quality of the Substructure, Ground Floor & Finishes
element is compared with the element of analysed building External & internal walls & finishes
 Element rate is adjust for quality or quantity of alterations & Upper floors & Staircase & finishes & proportion of frame
multiplied by the element unit rate
Roof, finishes & proportions of frame
 Method of using element unit quantity & element unit rate is
easy to make adjustment M&E
 This method can be used at all stages of the design if there Siteworks
is sufficient information available

23 Cost Modelling 24 Cost Modelling

Standard Form of Cost Analysis - SFCA SFCA Parameters
 Industrial Norm  Principles of analysis
 Elements cost/m2 enable us to compare designs  Definition of terms
 Based on tendered information  The range of common elements, definition & content of each one.
 BOQ formats  Instruction on how to carryout the preparation of cost analysis

6
 1/9/2021

25 Cost Modelling 26 Cost Modelling

SFCA Advantages SFCA Disadvantages
 Removes inconsistency & misunderstanding  More time & effort in preparation
 Facilitated a standardized approach  Extensive cost data bases are required to ensure accuracy of cost
 National library of cost analysis  High levels of ability & expertise are required if elements are to be
 Administrated & managed by QS professional properly evaluated / adjusted
 Comparison between similar projects.

27 Cost Modelling 28 Cost Modelling

SFCA Important terms SFCA Important terms
Term Definition Term Definition
Element cost Cost/m2 of GIFA Elemental unit quantity
Elemental unit quantity Element quantity Frame Area of floors relating to frame
Unit cost Cost of element expressed in terms of Roof Area on plan of roof measured to external edges of
element unit quantity (unit rate) eaves excluding roof lights
Elemental ratio Proportion which the unit quantity of one Staircase Number of total vertical rise of staircase
element bears to that of another External walls Area of external walls excluding window & door
openings

7
 1/9/2021

29 Cost Modelling 30 Methods of Measurement - RICS

SFCA Sample
 Methods of Measurement published by the RICS
 Code of Measuring Practice – floor areas
 NRM1 – Estimating and Cost Planning
 NRM2 – Measurement of Building Works
 NRM3 – Whole Life Costs

31 Methods of Measurement - RICS 32 Code of Measuring Practice

Code of Measuring Practice
 Three types of floor areas
 Purpose
 GEFA – gross external floor areas
Provide accurate and consistent measurement of floor areas with the
 GIFA – gross internal floor areas
overriding intention to provide clarity and certainty’ s.
 NUA (NIA) – net useable areas

8
 1/9/2021

33 Code of Measuring Practice 34 Measurement for building elements

 GEFA
Gross external floor area measured to the external (outside) face of
the perimeter walls and across all walls and partitions at each floor
level
 GIFA
Gross internal floor area measured to the internal face of the
perimeter walls and across all walls and partitions at each floor level

35 Measurement for building elements 36 Measurement for building elements

9
 1/9/2021

37 Measurement for building elements 38 Code of Measuring Practice

 NIA
Net internal floor area measured to the useable floor area from the
internal face of the perimeter walls and between the walls and
partitions at each floor level

 Exercise 6.a
 Exercise 6.b

39 Code of Measuring Practice 40 Code of Measuring Practice

 Each core definition states what is included and excluded, its  First estimate will be based on
applications and notes. Area
 Code of Measuring Practice is an industry norm which should be used Quality
to ensure:
Function
 All cost advice reported based on same rules
 Any legal action for bad cost advice has at least some defence if  Remember the first estimate is often the figure that
adhered to the code clients remember most
 Reduces time wasted in clarification
 Reduces risks to the client

10
 1/9/2021

41 NRM 1 42 NRM 1
 NRM1 provides rules of measurement for ‘Order of Cost Estimates’  Four parts
and ‘Elemental Cost Plans’ (good practice)  Part 1 –places costs in context to RIBA Plan of Work and OGC
Gateway process
 Also includes‘ direction on how to describe and deal with costs and  Part 2 –describes purpose and content & how to prepare ‘an Order
allowances forming part of the cost of the building but not reflected in of Cost Estimate’ using floor area method
the measurable building work items.  Part 3 –describes the purpose & how to prepare ‘elemental cost
plans’
 Part 4 –tabulated rules of measurement for the preparation of
formal elemental cost plans
 Appendices A-I

43 Cost Modelling 44

SFCA vs NRM1
 The SFCA shares elemental definitions and data structure with the
NRM1, but they have different objectives:
 The SFCA provides rules for allocating cost to their functional
elements.
 NRM1 provide rules for measuring designed elements and
components.

11