Dr Fiona Grant
Cost control during design and construction
DESIGN PROCESS TERMINOLOGY
Cost Control
(estimates can occur at any stage of this process)
Post-contract Cost
Control
Cost Planning Pre-contract Cost Control
Cost Limit
Cost Plan
Cost Analysis
cost checks
A
B
C
D
E
F
G
H
J
K
L
M
Inception
Feasibility
Outline
proposals
Scheme
design
Detail
design
Production
information
B of Q
Tender
Action
Project
Planning
Site
Operations
Completion
Feed
back
BRIEFING
SKETCH
PLANS
outline
design
plans
WORKING DRAWINGS
pilot detail
scheme
detais design
design
drawings
plans
production
information
drawings
SITE OPERATIONS
contract
drawings
record
drawings
2
Project Procurement
◦ The framework within which construction is brought
about, acquired or obtained.
(CIB W92 )
◦ Covers the entire process from project definition
through to construction, operation and recently of
increasing importance, the disposal of the
constructed facility
◦ Establishing a suitable framework to arrange and
organise the appropriate resources
3
Project Procurement

The procurement process for a project includes..
 Establishing
client needs, objectives, brief and
assessing and obtaining appropriate financial and
physical resources
 Determining
appropriate procurement path
 Identifying
and obtaining designers and
assessing & approving design
 Identifying
and obtaining construction production
organisations and approving & paying for actual
production of the facility
4
Procurement Routes/Systems

Traditional
Increasing

Traditional
accelerated/sequential
integration

Management contracting

Design & Build/Turnkey

Build-Operate & Transfer

Public Private
Partnerships/PFI
of
design
and
construction
5
Tendering

Open Tendering
Process
- produce tender documents
- advertise the project
- forward documents to prospective bidders
- receive tenders at due time and date
- evaluate the tenders
- Appoint contractor and sign contract
agreement
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Tendering

Open Tendering Advantages
Maximum competition
- Opportunity for all contractors
- Only firms interested in project will tender
- Allows smaller firms to expand
-
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Tendering

Selective Tendering
Process
- produce tender documents
- Select bidders from a shortlist
- forward documents to selected bidders
- receive tenders at due time and date
- evaluate the tenders
- Appoint contractor and sign contract
agreement
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Tendering

Selective Tendering Advantages
-
Suitable for specialist jobs
-
The procurement process may be faster
-
Only tried and tested contractors selected
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


Approximate Estimate
Cost Planning
Life Cycle Costing (Cost-in-use)
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
Approximate Estimate
◦ A preliminary estimate based on little/limited
information provided by the client.
◦ Based on single price rates




£/m3
£/m2
£/no of beds
£/no of pupils or students
◦ Usually refined as the design details unfold into
 Element unit quantities estimate
 Approximate quantities estimate
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Cost Planning
◦ Purpose/Function
 Assists the design team in controlling the cost of the design
 Spreading the cost between the elements of the building
 A tool for analysing and comparing tenders
◦ Main Elements (Group Elements)


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

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
Substructure
Superstructure
Internal/External Finishes
Fittings and furnishings
Services
External works
Preliminaries
Contingencies
Building
sub-total
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Life Cycle Costing (Cost-in-use)
◦ Technique for identifying the most efficient way of
achieving value for money in terms of expenditure
and revenue
◦ Takes into account





Running cost
Maintenance cost
Remodelling cost
Capital expenditure
Approximate life of the building
◦ Technique used
 Discounted cash flow techniques
 Annual equivalent
 Present value
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Definition of Cost, Price and Value

Cost
Procurement Cost





Cost of land
Consultants’ fees
Legal fees
Cost of finance
Cost of permits
Life cycle costs
Construction Cost
Contractor’s tender price
(contract sum)
Labour cost
Materials cost
Plant cost
Management cost
Builder’s finance cost
Profit and overheads
Price
Running Costs
Maintenance costs etc
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Cost, Price and Value
 Value
◦ What the building is worth
 Tangible commercial value
 as a tradable commodity
 adaptable for alternative uses
 Non-tangible value
 Meeting social needs, prestige
◦ Critical in determining whether a scheme/project is scaled
down or abandoned altogether.
◦ Value > Cost (for a project to be viable)
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