Presented to the San Francisco chapter of the Construction Specification Institute

1. Project and Cost Management
A Quantity Surveying Approach
Carin Rautenbach – Vice President
John Merkler AIA – Executive Services Manager

2. Introduction
Atkinsorganization
Atkins
Transport Design & Engineering Management & Equity
Solutions Project Services Investments
Rail H&T Faithful & Management Investments/
Water & Metronet
Environment Gould Consultancy
(World)
Engineering Asset
Solutions Management
Lambert
Smith
Design Solutions Hanscomb Project Hampton
Faithful Development
Design & Programme &
Management Gould
(USA)

3. Introduction
COMPANY HISTORY UNITED STATES WORDWIDE
 Atkins est. in 1938  A global company . . .  Presence in more than 60
Locally based countries and 190 offices
 Hanscomb est. in 1946 worldwide
26 offices - Major Cities in
 Faithful&Gould est. in the USA  2,150 independent,
1947, acquired by Atkins professional consultants
1996  420 Independent,
Worldwide
professional consultants
 Atkins HF&G merged in in the United States
June 2002
Core business PROJECT and COST MANAGEMENT
World’s leading cost consultant with over 55 years experience

4. Ability to Influence Project Cost & Schedule

5. What is Quantity Surveying?
Quantity Surveying is in reality, a way of looking at a project
through a Cost Management model that is quite specific

6. Chain of Services
Typical range of services
Contract & Bid Analysis
Work Scope & Award
Planning Management
Customer Products
Pre-qualification
Needs that meet
& Inquiry
Customers’
Management
Needs

7. Chain of Services
Our range of services
Program and Contract & Bid Analysis Change
Feasibility
Procurement Work Scope and Award and Trend
Analysis
Strategy Planning Management Management
Customer’s Risk Engineering Pre-qualification Cost and Final Accounts
Needs Management Management and Inquiry Project and Asset
Management Management Listings

8. Elements of Quantity Surveying
• Alignment & Essentials of Cost Management
• Understanding Costs
• Standard Formats
• Identifying Cost Drivers
• How to Manage Costs
– It all starts with a good budget
– Integrated cost management approach
– Careful use of historical information
– Intelligent Value analysis/engineering
– Sensitivity to life cycle costs & sustainability
– Design/Pricing Contingency
• Helpful Hints
• Industry Trends
• Recent Examples – UC Irvine; D/B Hospital

9. Essentials of Cost Management
Cost Management isAligning:
• Scope - Measurable and quantifiable aspects
of the facility
• Expectations - Quality and performance
expectations of the client
• Budget - The cost of the facility
and Maintaining Alignment over Time

10. Alignment
Scope
Ongoing
Effort
Expectations Budget
Projects need to start right to finish right

11. Defining Scope, Expectations and Budget
SCOPE EXPECTATIONS BUDGET
Program Aesthetics Initial Costs
- Functional Space Program - Form & Massing - Site Acquisition
- Blocking &Stacking - Image - Fees
- Public Space - Community Requirements - Construction
- Efficiency - Design Issues - Inflation and Market Conditions
- Contingencies
Geometric Drivers Quality - Other Costs
- Wall Area Ratio - Systems
- Degree of Articulation - Materials FutureOne-Time Costs
- Workmanship - Replacements
Volume Drivers - Alterations
- Clear Ceiling Height Project Delivery - Salvage
- Plenum Height - Phasing & Scheduling - Other ne-Time Costs
O
- Interstitial Needs - Continued Occupancy
- Atria - Delivery System Facility Annual Costs
- Light Shelves - Operations
Systems Performance - Maintenance
Facility Parameters - Functional Space Elements - Financing
- HVAC SF/Ton - Building Management - Taxes
- Watts/SF - Maintainability - Insurance
- Plumbing Fixtures - Energy Consumption - Security
- Ductwork Poundage - Sustainability - Other Annual Costs
- Steel Pounds/SF
- Etc. Facility Performance Functional Use Costs
- Live Loads - Staffing
- Expandability - Materials
- Flexibility - Denial of Use
- Security & Safety - Other Functional Use Costs
- Access & Egress
- Adjacencies
- Natural Light
External Requirements
- Codes
- Standards & Criteria

12. Understanding Costs

13. Definition of Cost
Site Costs Hard Costs Soft Costs
Land Building Interiors Development Costs
 Design fees
 Land Cost  Foundations  Tenant Work
Commission &  Management fees
 Structure  Artwork
Fees TOTAL
 Legal fees
 Enclosure  Furniture, Fixtures
 Title Insurance + + + = CAPITAL
& Equipment  Taxes & Levies COSTS
 Interior Finishes
 Transfer Taxes
 Telephone & Data  Insurance
 Conveying
 Surveys Communications
 Owner’s
 HVAC & System
 Demolition administration
Plumbing
 Sitework  Leasing commissions
 Electrical
 Interim finance
 Moving Costs

14. Medical Center- Project Costs
(Hard Cost)

15. Breakdown of Construction Costs
Total
Hard Costs
Prime
Contractor /
CM Mark-up
General
Conditions
Sub-Contractor
Mark-up
General
Conditions
Materials Installation
Purchase Cost Taxes Labor Equipment
Premiums Operations Equipment
Shipping & Fringes
Cost Rental
Handling
Taxes /
Insurance
Base
Wages

16. Standard Formats

17. Estimating Formats
• Standardized Format
– Consistency
– Data Base
– Checklist
• Classifications
– Masterformat
– UNIFORMAT
– Contract Packages
– Activities
– Plan /Program areas

18. MasterFormat Divisions
DIVISION 1 General Requirements
2 Sitework
3 Concrete
4 Masonry
5 Metals
6 Wood and Plastics
7 Thermal and Moisture Protection
8 Doors and Windows
9 Finishes
10 Specialties
11 Equipment
12 Furnishings
13 Special Construction
14 Conveying Systems
15 Mechanical
16 Electrical

19. Example - Exterior Wall System Detail
03450 - Plant-Precast Architectural Concrete
04230 - Concrete Masonry Units
07210 - Building Insulation
Three sections from three separate Divisions
are required

20. UNIFORMAT Elements
• A10 Foundations
• A20 Basement Construction • E10 Equipment
• E20 Furnishings
• B10 Superstructure • F10 Special Construction
• B20 Exterior Closure • F20 Selective Building
• B30 Roofing • G10 Site Preparation
• C10 Interior Construction • G20 Site Improvements
• C20 Staircases
• G30 Site Mechanical Utilities
• C30 Interior Finishes
• D10 Conveying Systems
• G40 Site Electrical Utilities
• D20 Plumbing
• G50 Other Site Construction
• D30 HVAC
• D40 Fire Protection
• D50 Electrical

21. Where the Dollar Goes
UNIFORMAT II Apartment Office
Element Building Building
(level 2) 15 st – 15st – 140,000SF
162,000SF (shell & core)
A.10 Foundations $ 0.98 $ 1.52
A.20 Basement Construction -- --
B.10 Superstructure 11.41 15.38
B.20 Exterior Closure 8.53 11.77
B.30 Roofing 0.24 0.35
C.10 Interior Construction 13.16 2.74
C.20 Staircases 1.15 1.54
C.30 Interior Finishes 9.74 9.35
D.10 Conveying 5.31 6.14
D.20 Plumbing 8.30 1.48
D.30 HVAC 9.63 11.82
D.40 Fire Protection 1.95 2.81
D.50 Electrical 6.23 8.80
F.10 Special Construction 1.33 --
Z. General Conditions 11.70 11.06
( Sitework Excluded) $ 89.67/SF $ 84.76/SF

22. UNIFORMAT II and MasterFormat
Shell & Substructure
07 Thermal & moisture protect
MASTERFORMAT Categories
13 Special construction
14 Conveying systems
01 General conditions
08 Doors & windows
06 Wood-plastic
12 Furnishings
15 Mechanical
10 Specialties
11 Equipment
02 Site work
16 Electrical
03 Concrete
04 Masonry
09 Finishes
05 Metals
UNIFORMAT II Categories
Level 1 Level 2 Level 3
A 10 Foundations A 1010 Standard Foundations
SUBSTRUCTURE
A 1020 Other Foundations
A 1030 Slab on Grade
A
A 20 Basement Construction 2010 Basement Excavation
A
A 2020 Basement Walls
B 10 Superstructure B 1010 Floor Construction
B 1020 Roof Construction
SHELL
B 20 Exterior Enclosure B 2010 Exterior Walls
B
B 2020 Exterior Windows
B 2030 Exterior Doors
B 30 Roofing B 3010 Roof Coverings
B 3020 Roof Openings

23. Hospitality Estimate- Uniformat

24. Hospitality Estimate- Masterformat

25. Identifying Cost Drivers

26. Factors Driving Building Costs
• Key Issues
– The Pareto Principle – “The few affect the many”
– Overlaps between disciplines
– Timing and opportunity
• Driving Factors
– Geographical and Site
– Design – Shape, size, height & efficiency
– Qualitative
– Legal and Administrative
– Market and External Economic
– Unknowns – Contingency, escalation & risk

27. PARETO’S LAW OF DISTRIBUTION
100
90
PERCENTAGE OF COST
80
70
60
Best Value Focus
50
40
30
20
10
0
0 20 40 60 80 100
PERCENTAGE Of TOTAL FACILITY COMPONENTS

28. Focus on Interdisciplinary Areas
Electrical Civil & structural
Architectural
Mechanical
Owner’s requirements

29. Relationship of Time and Change
Ability to Cost of
High
make changes making changes
Degree of
Change
Best Opportunity
for Improvement
Low
Planning Design Construction
Time

30. Building Efficiency Example
GFA Cost per SF Net Rentable Net Rentable
Floor Area Ratio Floor Area
Office Building A140,000 sf 85.00 80% 112,000 sf
Office Building B140,000 sf 85.00 85% 119,000 sf
What is the cost per SF of rentable area?
A = $106.25
B = $100.00

31. Relationship Between Quality & Cost
HIGH
Bankrupt Zone
TOTAL LIFE CYCLE COST
COST QUALITY LIMITS
FUTURE COSTS
MAX
INITIAL COSTS
MIN
LOW VC Tile Zone
LOW MIN MAX HIGH
QUALITY

32. Effect of Competition on Prices
1.25
1.15
Bid
1.05
Factor
0.95
0.85
0 2 4 6 8 10 12 14 16 18 20
Number of Bids
Source: Area Cost Factor Study, U.S. Army Corps of Engineers

33. Market Conditions
Comparison Between Bid Results and Fair Market Value Predatory
Range +/-
40 10-20%
above or
30
below FMV
20
10 Reasonable
Supply &
0 Demand Range
+/- 7%
-10
-20
-30
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
YEAR

34. Contingencies and Escalation
• Contingencies are real costs - just not identified…. yet
• Contingency is risk dependent
• Contingency is dependent on development of design
• Where possible allocate contingency where costs will
occur
• Clarify contingency/allowance for changes with all
parties
• Be sure that the owner is carrying a project
contingency
• Escalation will happen - Plan for it
• Be careful that multiple contractors are not
overlapping

35. Design/Pricing Contingency
Why do we need a design/pricing contingency?
• At early stages (schematics), many decisions have yet
to be made
• Specification yet to be defined
• Building code changes/interpretations
• Consultants who come in later (MEP) tend to add
requirement.
• Owners requirements may change/develop.
• Market conditions – shortage of competition.
• Existing buildings – examination and testing
incomplete.
• Definition of bid packaging/phasing.
• Front end requirements ( liquidated damages).

36. How to Manage Costs
• It all starts with a good budget
• Integrated cost management approach
• Careful use of historical information
• Intelligent Value analysis/engineering
• Sensitivity to life cycle costs &
sustainability

37. It All Starts with a Good Budget
•A Good Budget Should:
• Reflect scope
• Reflect quality/performance
expectations
• Reflect owners value objectives
• Be achievable and accepted
• Be defensible
• Contain “bridge” to ongoing cost
control
• Be based on techniques and data
available
• Contain adequate reserves
•Avoid
• Socially acceptable budgets
• Playing it safe

38. Facility Cost Plan Summary
Project Description: Federal Level Office Building Bid Date: 12/02
Project Type: Office Construction time(Months): 36
Gross Building Area:(GSF) 425,000 Market Conditions: good
UNIFORMAT TOTAL COST PER % OF ELEMENTAL ANALYSIS
UNIFORMAT SYSTEM / ELEMENT DESCRIPTION
BUILDING:
REFERENCE COST
b
GSF
b / GSF
BUILDING
b / 27
MEASURE UNIT VALUE
c
COST/UNIT
b/c
Cost per 1
2
Foundations
Standard Foundations
(A10)
(A1010)
3,824,493
75,507
9.00
0.18
5.5%
0.1%
Ground Floor Area SF
Ground Floor Area SF
108,975
108,975
35.10
0.69
UNIFORMAT
Gross Area
3
4
Other Foundations
Slab on Grade
(A1020)
(A1030)
2,144,701
1,604,285
5.05
3.77
3.1%
2.3%
Ground Floor Area SF
Ground Floor Area SF
108,975
108,975
19.68
14.72 Cost per
5 Basement Construction (A20) - - 0.0% Ground Floor Area SF 108,975 -
6 Substructure - Sub-Total (A) 3,824,493 9.00 5.5% Ground Floor Area SF 108,975 35.10 System Unit
7 Superstructure (B10) 9,664,210 22.74 13.9% Gross Bldg. Area EA 425,000 22.74
8 Exterior Enclosure (B20) 17,374,453 40.88 25.0% Gross Enclosure Area EA 188,000 92.42
9 Roofing (B30) 1,058,767 2.49 1.5% Roof Surface Area SF 138,059 7.67
10 Shell - Sub-Total (B) 28,097,431 66.11 40.5% Gross Bldg. Area SF 425,000 66.11
11 Interior Construction (C10) 3,665,491 8.62 5.3% Gross Bldg. Area SF 425,000 8.62
12 Stairs (C20) 320,250 0.75 0.5% Gross Bldg. Area SF 425,000 0.75
13 Interior Finishes (C30) 4,197,176 9.88 6.0% Gross Bldg. Area SF 425,000 9.88
14 Interiors - Sub-Total (C) 8,182,917 19.25 11.8% Gross Bldg. Area SF 425,000 19.25
15 Conveying Systems (D10) 1,445,000 3.40 2.1% Total No. of Stops EA 48 30,104
16 Plumbing (D20) 1,481,286 3.49 2.1% No. of Fixtures EA - -
17 HVAC (D30) 9,876,438 23.24 14.2% Tons (or MBH) EA 2,100 4,703
18 Fire Protection (D40) 989,900 2.33 1.4% Protected Area SF 425,000 2.33
19 Electrical (D50) 9,890,639 23.27 14.3% Gross Bldg. Area SF 425,000 23.27
20 Electrical Service & Distribution (D5010) 2,949,820 6.94 4.3% Connected KW KW 8,000 369
21 Lighting & Branch Wiring (D5020) 3,857,838 9.08 5.6% Gross Bldg. Area SF 425,000 9.08
22 Communications & Security (D5030) 2,171,737 5.11 3.1% Gross Bldg. Area SF 425,000 5.11
23 Other Electrical Systems (D5040) 911,244 2.14 1.3% Gross Bldg. Area SF 425,000 2.14
24 Services - Sub-Total (D) 23,683,263 55.73 34.1% Gross Bldg. Area SF 425,000 55.73
25 Equip. & Furnishings - Sub-Total (E) 1,667,099 3.92 2.4% Gross Bldg. Area SF 425,000 3.92
26 Spec. Construct. & Demo - Sub-Total (F) 3,932,792 9.25 5.7% Gross Bldg. Area SF 425,000 9.25
27 TOTAL BUILDING $ 69,387,994 $ 163.27 100.0% Occupants EA 1,800 $ 38,549
28 SITEWORK & UTILITIES:
29 Site Preparation (G10) 2,105,133 4.95 3.0% Gross Site Area SF 522,720 4.03
30 Site Improvements (G20) 3,812,500 8.97 5.5% Gross Site Area SF 522,720 7.29
31 Site Mechanical Utilities (G30) 473,000 1.11 0.7% Gross Site Area SF 522,720 0.90
32 Site Electrical Utilities (G40) 539,635 1.27 0.8% Gross Site Area SF 522,720 1.03
33 Other Site Construction (G50) 4,714,207 11.09 6.8% Gross Site Area SF 522,720 9.02
34 TOTAL SITEWORK & UTILITIES: (G) 11,644,476 27.40 16.8% Gross Site Area SF 522,720 22.28
35 General Conditions, Overhead & Profit @ 16.3% 13,232,602 31.14 19.1%
36 TOTAL FACILITY COST - CURRENT $ 94,265,072 $ 221.80 135.9% Occupants EA 1,800 $ 52,369
37 Contingencies (Pricing, Phasing, Constr.) 18.0% 16,933,778 39.84 24.4%
38 Escalation 10.3% 11,447,176 26.93 14.0%
Key 39
40 TOTAL FACILITY COST - PROJECTED $ 122,646,026 $ 288.58 174.2% Occupants EA 1,800 $ 68,137
Parameter Key Parameters:
1 Gross Bldg. Area
Measure
SF
Value
425,000
Area Analysis: Area (SF)
Tracking 2 Ground Floor Area
3 Gross Enclosure Area
SF
SF
108,975
188,000
Basement
Ground Floor 108,975
4 Percent Fenestration % 36% Upper Floors 312,025
5 Roof Surface Area SF 138,059 Penthouses 4,000
6 Total No.of Conveying Stops STOPS 48 Other Areas -
7 Tons Cooling (or MBH Htg) TONS 2,100
8 No. of Plumbing Fixtures EA Gross Floor Area 425,000
9 Fire Protected Area SF 425,000
10 Connected KW KW 8,000
11 Occupants EA 1,800
12 Floor to Floor Height (Avg.) LF 13

39. Integrated Cost Management Process
Cost Plan Revised Cost Plan Revised Cost Plan
by Discipline by Discipline by Discipline
Architectural Architectural Architectural
Market Market
Cost Parameter Assessment, Cost Parameter Assessment, Cost Parameter
Targets Targets Contingencies & Risks Targets Targets Contingencies & Risks Targets Targets
Structural Structural Structural
Constructibility, Historical
Cost Parameter Massing, Quality & Historical
Historical Cost Parameter Phasing & Quality & Benchmarks Cost Parameter
Targets Targets Aesthetics & Performance Benchmarks Targets Targets Targets Targets
Scope Expectations Benchmarks Scheduling Performance
Image
Mechanical Mechanical Mechanical
Cost Parameter Cost Parameter Cost Parameter
Targets Targets Targets Targets Targets Targets
Cost Milestone Revised Milestone Revised
Ongoing Advice
Analysis& Cost Model Electrical Ongoing Advice Cost CostModel Electrical Cost CostModel Electrical
Alignment Estimate Estimate
Cost Parameter Cost Parameter Cost Parameter
Targets Targets Targets Targets Targets Targets
Equipment/Special Equipment/Special Equipment/Special
Criteria & Site & Phasing & Life Cycle Materials & Life Cycle
Standards Configuration Cost Parameter Schedule Performance & Cost Parameter
Systems Performance & Cost Parameter
Targets Targets Sustainability Targets Targets Sustainability Targets Targets
Site Site Site
Cost Parameter Cost Parameter Cost Parameter
Alternates Targets Targets Concepts Systems
Targets Targets Targets Targets
Value Value Value
Planning Engineering Engineering
Delivery System
Components
Approaches Alternates
Project
History
Concept Development & Schematic Design Development & Construction
Planning and Programming Design Documents

40. Summary of Estimating Methods
(1) Single Unit Rate
(2) Parametric/Cost Modeling
(3) System Elemental Cost Analysis
(4) Quantity Survey
Application of Cost Estimating Techniques
Pre-Design Schematic Design Development Construction Documents Pre-Bid
SUR
Parametric
System
Quantity Survey

41. Cost Management Tracking Example
PROJECT COST COMPARISON SUMMARY
PROJECT: MODERNIZATION OF USCS/ICC/CW BUILDINGS COMPLEX PROJECT NO: IDC28143/IDC28144/IDC28145 SHEET NO: 1A of 3
LOCATION: WASHINGTON, D.C. COST MANAGER: HANSCOMB INC.
A/E ESTIMATE
Original PDS Adjusted PDS Concept Concept Tentative (Rev.)Tentative (Rev.) 5%
7
Construction Cost (ECCA) Option "A" Option "A" Pre-VE After VE Pre VE After VE Intermediate Final
(Level 2) Date: Jan.1992 Date: 12/6/94 Date: 07/10/95 Date: 10/10/95 Date: 11/14/95 Date: 11/28/95 Date: 12/18/95 Date:5/9/96
01 FOUNDATIONS $0 $0 $0 $0 $0 $0 $0
02 SUBSTRUCTURE $5,000 $0 $0 $0 $0 $0 $0
03 SUPERSTRUCTURE $385,000 $310,105 $307,585 $844,847 $844,847 $1,349,596 $1,585,575
04 EXTERIOR CLOSURE $3,029,927 $4,715,882 $4,610,867 $6,680,867 $6,974,868 $5,618,130 $6,105,491
05 ROOFING $2,937,360 $4,330,642 $4,330,642 $3,530,665 $3,530,665 $1,748,414 $1,654,206
06 INTERIOR CONSTRUCTION $36,603,983 $18,051,709 $15,079,374 $21,301,147 $21,103,312 $24,972,056 $27,880,252
07 CONVEYING SYSTEMS $2,097,500 $1,389,000 $1,321,791 $1,708,610 $1,708,610 $1,773,203 $1,862,732
08 MECHANICAL $27,926,204 $28,706,881 $27,213,152 $21,973,075 $21,994,952 $24,526,254 $23,523,509
09 ELECTRICAL $17,566,534 $24,187,059 $22,691,650 $21,106,943 $21,606,943 $20,298,145 $21,178,345
10 GENERAL CONDITIONS AND PROFIT $15,591,418 $15,321,706 $14,225,258 $15,986,755 $16,016,755 $15,802,655 $17,077,336
11 EQUIPMENT $548,800 $814,013 $814,013 $995,113 $995,113 $1,496,265 $1,434,306
12 SITEWORK $6,042,481 $13,255,375 $12,182,236 $15,279,927 $16,142,148 $8,281,772 $8,114,647
SUBTOTAL $112,734,207 $111,082,372 $102,776,568 $109,407,949 $110,918,213 $105,866,490 $110,416,399
DESIGN CONTINGENCY Incl. in 01-12 $11,108,237 $10,277,657 $10,940,795 $11,091,821 $7,939,987 $0
SUBTOTAL $112,734,207 $122,190,609 $113,054,225 $120,348,744 $122,010,034 $113,806,477 $110,416,399
ESCALATION : $26,632,920 $10,031,849 $9,281,752
TO START OF CC# 1 - 9/96 $206,739 $206,739 $180,888 $105,399
TO START OF CC# 2 - 2/97 $2,080,767 $2,561,242 $1,779,027 $1,020,008
TO START OF CC# 3 - 12/97 $4,459,648 $5,489,433 $3,860,835 $2,749,961
SUBTOTAL (ECCA) - CC # 1, 2 and 3 $139,367,127 $130,588,000 $132,222,458 $122,335,977 $127,095,898 $130,267,448 $119,627,227 $114,291,767
(including reimbursable items)
CONSTRUCTION CONTINGENCY @ 7% $6,799,995 $9,141,000 $9,255,572 $8,563,518 $8,896,713 $9,118,721 $8,373,906 $8,000,424
ESTIMATED CONSTRUCTION COST (ECC) $146,167,122 $139,729,000 $141,478,030 $130,899,495 $135,992,611 $139,386,170 $128,001,133 $122,292,191
Cost per SM $1,253.16 $1,159.46 $1,204.57 $1,234.63 $1,133.79 $1,083.22
Gross Floor Area (M2) 112,897 112,897 112,897 112,897 112,897 112,897
CONSTRUCTION CONTRACT No. 1 (ECC) $7,907,207 $7,955,000 $9,362,167 $9,362,167 $10,119,187 $7,890,514
CONSTRUCTION CONTRACT No. 2 (ECC) $53,613,049 $55,208,000 $50,209,613 $51,295,552 $47,334,557 $51,156,045
CONSTRUCTION CONTRACT No. 3 (ECC) + SITE $84,646,866 $76,566,000 $76,420,830 $78,728,451 $70,547,388 $63,245,632

42. Historical Cost Model Database
BUILDING COST SUMMARY - ALL PROJECTS (Adjusted to April 2001)
Project Description: Elementary Schools Bid Date 11/96 8/95 10/93 1/97 9/94 Adjusted Adjusted
Project Type: School Constr Time 14 15 14 14 16 Average Average
Market good good excellent good good of All of All
UNIFORMAT Example 1 Adjusted Example 2 Adjusted Example 3 Adjusted Example 4 Adjusted Example 5 Adjusted
SYSTEM / ELEMENT DESCRIPTION REFERENCE TOTAL COST $/sf by: TOTAL COST $/sf by: TOTAL COST $/sf by: TOTAL COST $/sf by: TOTAL COST $/sf by: ($/SF) ($/Parameter)
BUILDING: b 1.14 b 1.18 b 1.32 b 1.13 b 1.21
1 Foundations (A10) 506,192 7.47 485,255 6.83 397,823 7.80 561,768 8.13 385,840 7.01 7.45 Ground Floor Area 74,780 SF 7.45
2 Standard Foundations (A1010) 302,142 4.46 277,228 3.90 219,741 4.31 348,071 5.04 230,305 4.18 4.38 Ground Floor Area 74,780 SF 4.38
3 Other Foundations (A1020) - - - - - - - - - - - Ground Floor Area 74,780 SF -
4 Slab on Grade (A1030) 204,050 3.01 208,027 2.93 178,081 3.49 213,698 3.09 155,535 2.82 3.07 Ground Floor Area 74,780 SF 3.07
5 Basement Construction (A20) - - - - - - - - - - - Ground Floor Area 74,780 SF -
6 Substructure - Sub-Total (A) 506,192 7.47 485,255 6.83 397,823 7.80 561,768 8.13 385,840 7.01 7.45 Ground Floor Area 74,780 SF 7.45
7 Superstructure (B10) 400,900 5.92 408,714 5.75 291,566 5.72 461,841 6.69 305,582 5.55 5.92 Gross Bldg. Area 74,780 SF 5.92
8 Exterior Enclosure (B20) 537,917 7.94 504,529 7.10 391,216 7.67 563,351 8.16 360,819 6.55 7.48 Gross Enclosure Area 30,646 SF 18.25
9 Roofing (B30) 273,275 4.03 278,601 3.92 198,747 3.90 329,125 4.77 208,301 3.78 4.08 Roof Surface Area 77,492 SF 3.94
10 Shell - Sub-Total (B) 1,212,092 17.89 1,191,845 16.78 881,529 17.28 1,354,317 19.61 874,703 15.88 17.49 Gross Bldg. Area 74,780 SF 17.49
11 Interior Construction (C10) 560,523 8.27 571,448 8.04 346,508 6.79 587,025 8.50 405,890 7.37 7.80 Gross Bldg. Area 74,780 SF 7.80
12 Stairs (C20) - - - - - - - - - - - Gross Bldg. Area 74,780 SF -
13 Interior Finishes (C30) 394,833 5.83 483,034 6.80 258,438 5.07 413,501 5.99 361,149 6.56 6.05 Gross Bldg. Area 74,780 SF 6.05
14 Interiors - Sub-Total (C) 955,356 14.10 1,054,482 14.84 604,946 11.86 1,000,526 14.49 767,040 13.93 13.84 Gross Bldg. Area 74,780 SF 13.84
15 Conveying Systems (D10) 7,288 0.11 7,430 0.10 5,300 0.10 7,633 0.11 5,555 0.10 0.11 Total No. of Stops 1 EA 7,901
16 Plumbing (D20) 447,800 6.61 456,528 6.43 325,675 6.38 468,973 6.79 341,331 6.20 6.48 No. of Fixtures 144 EA 3,365
17 HVAC (D30) 1,049,400 15.49 1,283,824 18.07 763,206 14.96 1,099,017 15.91 799,895 14.53 15.79 Tons (or MBH) 208 EA 5,689
18 Fire Protection (D40) 151,800 2.24 154,759 2.18 110,401 2.16 158,977 2.30 115,708 2.10 2.20 Protected Area 74,780 SF 2.20
19 Electrical (D50) 859,866 12.69 859,866 12.10 859,866 16.86 859,866 12.45 859,866 15.62 13.94 Gross Bldg. Area 74,780 SF 13.94
20 Electrical Service & Distribution (D5010) 182,120 2.69 185,670 2.61 132,452 2.60 190,731 2.76 138,819 2.52 2.64 Connected KW 660 KW 299
21 Lighting & Branch Wiring (D5020) 286,132 4.22 291,709 4.11 208,098 4.08 344,610 4.99 218,101 3.96 4.27 Gross Bldg. Area 74,780 SF 4.27
22 Communications & Security (D5030) 205,778 3.04 209,789 2.95 149,658 2.93 269,384 3.90 156,852 2.85 3.13 Gross Bldg. Area 74,780 SF 3.13
23 Other Electrical Systems (D5040) 185,836 2.74 189,458 2.67 135,155 2.65 194,623 2.82 141,652 2.57 2.69 Gross Bldg. Area 74,780 SF 2.69
24 Services - Sub-Total (D) 2,516,154 37.14 2,762,407 38.89 2,064,449 40.47 2,594,466 37.57 2,122,355 38.54 38.52 Gross Bldg. Area 74,780 SF 38.52
25 Equip. & Furnishings - Sub-Total (E) 211,210 3.12 215,327 3.03 153,609 3.01 221,196 3.20 193,191 3.51 3.17 Gross Bldg. Area 74,780 SF 3.17
26 Spec. Construct. & Demo - Sub-Total (F) 28,500 0.42 29,055 0.41 20,727 0.41 29,848 0.43 21,724 0.39 0.41 Gross Bldg. Area 74,780 SF 0.41
27 TOTAL BUILDING $ 5,429,504 80.14 $ 5,738,371 80.78 $ 4,123,083 80.83 $ 5,762,121 83.44 $ 4,364,853 79.27 80.89 Accomodation Units 700 EA $ 8,675
28 SITEWORK & UTILITIES: - - - - - - -
29 Site Preparation (G10) 467,598 6.90 657,181 9.25 375,979 7.37 482,827 6.99 527,489 9.58 8.02 Gross Site Area 620,000 SF 0.96
30 Site Improvements (G20) 85,122 1.26 99,695 1.40 88,977 1.74 87,894 1.27 71,129 1.29 1.39 Gross Site Area 620,000 SF 0.17
31 Site Mechanical Utilities (G30) 301,500 4.45 353,117 4.97 242,426 4.75 311,319 4.51 214,147 3.89 4.51 Gross Site Area 620,000 SF 0.55
32 Site Electrical Utilities (G40) - - - - - - - - - - - Gross Site Area 620,000 SF -
33 Other Site Construction (G50) - - - - - - - - - - - Gross Site Area 620,000 SF -
34 TOTAL SITEWORK & UTILITIES: (G) 854,220 12.61 1,109,993 15.63 707,382 13.87 882,041 12.77 812,765 14.76 13.93 Gross Site Area 620,000 SF 1.68
35 General Conditions, Overhead & Profit @ 5.1% 322,647 4.76 351,639 4.95 248,027 4.86 341,154 4.94 265,852 4.83 4.87 -
36 TOTAL FACILITY COST - CURRENT $ 6,606,371 97.51 $ 7,200,003 101.36 $ 5,078,492 99.56 $ 6,985,316 101.15 $ 5,443,470 98.86 99.69 Accomodation Units 700 EA $ 10,692
37 Contingency @ - - - - - - - - - - - -
38 Escalation @ - - - - - - - - - - - -
39 - - - - - - -
40 TOTAL FACILITY COST - PROJECTED $ 6,606,371 97.51 $ 7,200,003 101.36 $ 5,078,492 99.56 $ 6,985,316 101.15 $ 5,443,470 98.86 99.69 Accomodation Units 700 EA $ 10,692
41 TOTAL FACILITY COST/SF - PROJECTED $ 85.57 97.51 $ 85.71 101.36 $ 75.24 99.56 $ 89.21 101.15 $ 81.37 98.86 99.69 -
Parameters: Measure Value Value Value Value Value Value
1 Gross Bldg. Area SF 77,200 84,000 67,500 78,300 66,900 74,780
2 Ground Floor Area SF 77,200 84,000 67,500 78,300 66,900 74,780
3 Gross Enclosure Area SF 31,000 33,731 28,000 32,500 28,000 30,646
4 Percent Fenestration % 12% 12% 15% 12% 15% 13%
5 Roof Surface Area SF 80,000 87,047 69,948 81,140 69,326 77,492
6 Total No.of Conveying Stops STOPS 1 1 1 1 1 1
7 Tons Cooling (or MBH Htg) TONS 200 240 200 200 200 208
8 No. of PlumbingFixtures EA 150 160 130 150 130 144
9 Fire Protected Area SF 77,200 84,000 67,500 78,300 66,900 74,780
10 Connected KW KW 650 750 600 700 600 660
11 Accomodation Units EA 750 800 600 750 600 700
12 Floor to Floor Height (Avg.) LF 12 12 12 12 12 12
13 Gross Site Area SF 600,000 750,000 580,000 600,000 570,000 620,000
14 Gross Bldg. Area per Accomod Unit SF/EA 103 105 113 104 112 107

43. Hospital Cost Model
Based on Historical Data from Other Hospitals
• Compare/benchmark other hospitals
• Adjust for OSHPD V non-OSHPD criteria
• Adjust for location
• Adjust for central plant V no central plant
• Adjust for size factor
• Adjust for phasing/links
• Adjust for time/escalation
• Adjust for unique costs
• Adjust for shelled space
• Adjust for medical equipment with hard cost

44. Sensitivity to Life Cycle Impact
Transportation Construction 18%
2% Other Support Costs 5%
1% School Allotment
1% Textbooks
Furnishings / Fitout 4%
Benefits / Overhead Fees 1%
14% Other Project Costs 1%
ConstructionContingency 1%
Major Capital Replacements
5%
Maintenance 3%
Support Staffing
11%
Energy 2%
Educational Staffing 31%

45. Life Cycle Costing Example
Life Cycle Cost Analysis Alternative 1 Alternative 2 Alternative 3 Alternative 4
General Purpose Worksheet Individual Rooftop Central Plant with
Units 4 - Pipe Fan Coil Units
Study Title: HVAC System Analysis Estimated Present Estimated Present Estimated Present Estimated Present
Discount Rate : 8% Date: 12/17/97 Costs Worth Costs Worth Costs Worth Costs Worth
Life Cycle (Yrs.) 30
Initial/Collateral Costs
INITIAL / COLLATERAL COSTS
A. Equipment 1,212,354 1,212,354 2,803,000 2,803,000
B. Screening 55,501 55,501 40,000 40,000
C. Plant Space 128,000 128,000
D.
E.
F.
G.
Total Initial/Collateral Costs $1,267,855 $1,267,855 $2,971,000 $2,971,000
Difference ($1,703,145)
Replacement/Salvage PW
REPLACEMENT / SALVAGE
(Single Expenditures) Year Facto r
A. Rooftop Units (70%) 8 0.540 770,000 416,007
B. Rooftop Units (70%) 16 0.292 770,000 224,756
COSTS
C. Rooftop Units (70%) 24 0.158 770,000 121,428
D. Fan Coils(100%) 15 0.315 408,888 128,899
E. Central Plant Equipment 20 0.215 600,000 128,729
F.
G.
Total Replacement/Salvage Costs $762,191 $257,627
Annual Costs Differential PW
Escal. Rate Facto r
ANNUAL COSTS
A. Maintenance - Rooftops 1% 12.496 75,360 941,693
B. Maintenance - Fan Coils 1% 12.496 37,680 470,847
C. Maintenance - Central Plant & Distrib. 1% 12.496 28,800 359,883
D. Energy 3% 15.631 468,000 7,315,296 192,000 3,001,147
E.
F.
G.
Total Annual Costs $543,360 $8,256,989 $258,480 $3,831,876
Total Life Cycle Costs (Present Worth) $10,287,035 $7,060,504
LIFE CYCLE
COSTS
Life Cycle Cost PW Difference $3,226,531
Discounted Payback (Alt. 2,3,4 vs. Alt. 1) 3.9
Total Life Cycle Costs - Annualized Per Year: $913,771 Per Year: $627,166 Per Year: Per Year:

46. LEED Checklist Excerpted from
LEED Green Building Rating System™

47. Industry Trends
• Variety of delivery systems
• New risk sharing approaches
• Increasing interest in sustainability/green
• Increase in security measures
• Protectionist legislation to protect certain
industries (steel, concrete, lumber)
• Demand for speed
• Outsourcing of management skills
• Local Factors

48. Industry Trends (cont.)
• Sector Corrections –
• Volume up
Medical, schools, housing
• Volume down
Office, hi-tech, most other sectors
• Materials/Union Wages
• Union wage rates are increasing 3-4% per annum.
• Materials are pretty erratic with some exceptions.
• Awareness of bidding climate

49. Helpful Cost Management Hints
• The budget must be aligned
• Apportion budgets by discipline …and manage
them
• Manage scope
• Manage quality and performance
• Define and adhere to key parameter measures
• “Buy in” to all estimates – share responsibility
• If necessary, get a second opinion
• Use value engineering/value analysis
• Be willing to learn lessons and share results

50. Understanding Costs
UC Irvine
Replacement Hospital Project – Recent Example

51. UCI Replacement Hospital
Change Order Review scope - ”…manage what?”

52. UCI Replacement Hospital
• Design/Build Hospital project
– Estimating & D/B oversight initial charge
• Charge from Campus for Cost
Management
– Real time review – but comprehensive
– Transparent process – OSHPD aware
– Organize Project Managers
– Integrate “field” & design
• Importance to Campus
– Audit trail
– Simple organization - One source of information
– Understanding of “where the money went”

53. UCI Replacement Hospital
• How UCI chose to Manage Cost –
Replacement Hospital
– I/M system integration – “Prolog” based
• HP Database + UCI Database = Collaboration
– PM meetings – monthly scope/OSHPD/field review
– Integrating “all” contracts – D/B + others + UCI provided
material
– Reporting - integrated
– Document Control – RFI/Bulletin/Ltr of Instruction/CO’s

54. Alignment
Scope
Ongoing
Effort
Expectations Budget
Projects need to start right to finish right

55. Project and Cost Management
A Quantity Surveying Approach
Carin Rautenbach – Vice President
John Merkler AIA – Executive Services Manager

56. Market Inflation Indices
(Based on a 100 Value
in 1977)
300.00
CPI Basic Means Index
250.00
200.00
150.00
100.00
50.00
1980
1988
1998
1977
1978
1979
1981
1982
1983
1984
1985
1986
1987
1989
1990
1991
1992
1993
1994
1995
1996
1997
1999
-

57. Index History
(Yearly Percent
Change)
16.00%
14.00%
12.00%
10.00% GDP CPI Basic Means Index
8.00%
6.00%
4.00%
3%
2.00%
0.00%
-2.00%
Recession Recession
-4.00%
1978
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1979
1999

58. Integrated Cost
Management Process
- Planning & Programming
Cost Plan
by Discipline
Architectural
Cost Parameter
Targets Targets
Structural
Cost Parameter
Historical
Targets Targets
Scope Expectations Benchmarks
Mechanical
Cost Parameter
Targets Targets
Cost
Analysis & Cost Model Electrical
Alignment Cost Parameter
Targets Targets
Equipment/Special
Criteria & Site &
Standards Configuration Cost Parameter
Targets Targets
Site
Cost Parameter
Alternates Targets Targets
Value
Planning
Delivery
Approaches
Planning and Programming

59. Facility Value Target
01
Foundations
02
Substructure
03
Superstructure
Sensible Trade-Offs
04
Exterior Closures
05
Roofing
06
Interior Construction
07
Conveying
08
Mechanical
09
Electrical
10
General Conditions
11
Sitework

60. Traditional Design-Bid-
Build Delivery

61. Traditional Design-Bid-Build Delivery
Fundamental Approach
• Prime contracts directly with owner
• A/E selected by qualifications or
qualifications/price.
• A/E prepares design to 100%.
• Open bidding to general contractors (may
be prequalified).
• Awarded of contract to lowest responsive
bidder

62. Construction Manager at
Risk Delivery

63. Construction Manager at
Risk Delivery
Approach
• CM (at risk) has direct contract with owner, as
does A/E.
• A/E selected by qualifications or
qualifications/price.
• CM (at risk) selected on qualifications or
qualifications and fee for general conditions and
profit.
• CM (at risk) responsible for work scheduling and
means/methods.

64. Construction Manager at
Risk Delivery
Variations
• CM (PM) can be retained in an agency
relationship to coordinate process.
• GMP can be followed with CM (at risk) open
bidding to subcontractors.
 Final price can “float” up to GMP.
 Or “shared savings” up to GMP with owner.
 Or a firm fixed price can be negotiated.

65. Design – Build Delivery

66. Advantage and
Disadvantages of Delivery
Systems
Traditional Design-Bid Build
ISSUES ADVANTAGES DISADVANTAGES
Cost and Budget “Best price” potential. Cost not finalized until
Management Perception of “best price”. bids.
Cost overruns after bid
require
expensive redesign.
Bidders may seek to “get
low”
by omitting work not
clearly
shown.
Schedule Impact Delivery schedule Construction difficult to
and Management stipulated in start
contract. before design is finished.
Extended/compressed
schedules may add cost

67. Advantage and
Disadvantages of Delivery
Systems
Construction Manager at Risk
ISSUES ADVANTAGES DISADVANTAGES
Cost and Budget Cost “guarantee” prior to After GMP, costs may
Management design completion. increase
Improved perception of due to detailing not
control. correctly
Cost saving incentives are • reflected in the GMP.
feasible. CM may “expand” budget
to
create opportunity for
future
savings”.
Schedule Impact Construction can start Schedule changes during
and Management before construction difficult to
design is complete. implement.
Cost of impact of
extended/compressed

68. Advantage and
Disadvantages of Delivery
Systems
Design-Build
ISSUES ADVANTAGES DISADVANTAGES
Cost and Budget Early cost guarantee. Fair price competition difficult
Management Price tends to match to
quality. verify.
Can obtain best price for Cost impact of risk issues
performance. may
not be evident in initial
pricing.
Owner overemphasis on
price
as a selection criterion may
force the design-builder to
compromise quality to reduce
price.
Schedule Impact Construction can start Schedule changes at any
and Management after point

69. Price Index / Cost
Index