Quantity Surveying & Cost Planning

© ValueMetric Consultants LLC (2016)
Ayman El-Ghazzawi
BSc MSc FRICS
American University in Cairo
Architectural Engineering Programme
11 October 2016

© ValueMetric Consultants LLC (2016) 2
Introduction – terminology
Benchmarking
Cost Planning
Building Economics
Conclusion
Q&A

 Cost is a significant, if not essential part of a project  decides if the
scheme is viable….. No Money  No Project
 QS is responsible for all matters financial and commercial on a
construction project
 Triangle of Duties on a Project:
COST
QUALITY TIME
Quantity
Surveyor
Project
Manager
Architect
(Designer)

US Approach to Cost Management UK Approach to Cost Management
Traditionally called a “Cost Estimator”
Previously called a Quantity Surveyor, now
more common to call Cost Manager
Approach is led by Programme Led by Design Stages (e.g. RIBA)
Use of cost-loaded programmes Use of Bills of Quantities to package works
Method of Measurement: CSI Masterformat Method of Measurement: POMI, NRM
Professional association: AACE Professional association: RICS
Combine Cost & Time  Project Controls Separate Cost & Time: QS and PM

Provides an early, approximate vision of construction costs
Helps in setting a project’s budget
Used to commercially manage the pre-contract design
Concept  Schematic  Detailed Design
Provides an early warning of scope creep, monitors changes
Can assist with setting sale prices
Informs the financial P&L of a developer company
Captures entire development costs  helps form package
BOQs

Term Definition
Cost actual price to be paid
Value
how much it is desired, price of what it’s
worth
Feasibility Estimate
Establishes the overall viability of the project,
return on investment
Order of Magnitude
Estimate
Reflects a particular design stage, e.g.
concept, schematic, detailed
Cost Plan
Reflects a particular design stage, e.g.
concept, schematic, detailed

Term Definition
Cost Model
Cost-led, does not reflect a particular design,
allows for varying elements
Cost Analysis
Estimates the cost of construction of
particular elements or portion of the works
Cost Report
Tracks the overall project costs monthly,
monitors commercial performance

9
Benchmarking and Order
of Cost Estimates (OCE)

Highest level of cost estimating, lowest accuracy
Usually based on functional units or built-up area
Examples of functional units:
› Hospitals EGP / bed
› Hotels EGP / key
› Schools EGP / student
› Residential EGP / m2 (or per habitable room)
› Office Buildings EGP / gross lettable area

OCE: Order of Cost Estimate – most preliminary cost plan
Must find out:
› Type of building to be built (e.g. hotel)
› Expected number of functional units (e.g. nr of keys)
› When it is expected to be built (e.g. two years from now)
› Outline specification level (e.g. high/med/low quality, 4*, 5*)
› Location where it is to be built

Source:
Spon’s Architects’and
Builders’ Price Book 2009

Begin with a high level benchmark estimate by function
Adjust your estimate by:
› Geographical variation
› Inflation indices
Multiply by number of functional units
Add contingency, VAT, etc.
Emphasise that Tolerance / accuracy is low
Use an estimating resource – your own project database or
price book

Source: Spon’s Architects’and Builders’ Price Book (2009)

A document that details costs, usually developed from a
preliminary benchmark estimate, based on elemental or
functional units that reflects the Design Team’s intentions
Follows the project’s design stages, e.g. RIBA Work Stages
Sets a plan to spend costs, helps with purchasing and cost
control
As cost plan develops, accuracy is improved:
LE/function  LE/m2  Detailed LE costs based on qtys

RIBA Work
Stage
Work Stage Description
A Appraisal / Feasibility
B Strategic Briefing
C Outline Proposals
D Detailed Proposals
E Final Proposals
F Production Information
G Tender Documentation
H Tender Action
J Mobilisation
K Construction  Practical Completion
L After Practical Completion

COST PLANNING STAGES
Concept
30%
Schematic
60%
Detailed
90%
COST PLAN
Confirm Budget, Cost
Limits
COST PLAN
Set Cost Targets on
Schematic
COST PLAN
Set Cost Targets on
Detailed
SET
BUDGET
Proceed
to Tender
BOQ
Remedial Action: Value
Engineering
Pro-activeChangeControl

Similar to OCE, but on an elemental level
Uses previous projects from a database, or pricing book
such as Spons
Adjust elements to suit the project being priced
› E.g. EGP/m2 will differ whether it is steel or concrete frame
Ensure it is a like-for-like benchmark comparison:
› Use same area types (BUA, NIA, etc.)
› Exclude sub-structure, earth work, external works
› Preliminaries (indirect costs), taxes and the like

OCE or preliminary cost plan ± 25% to 30% tolerance
› EGP / functional unit
Concept Cost Plan ± 15% to 25% tolerance
› EGP / m2, based on floor areas
Schematic Cost Plan ± 10% to 15% tolerance
› EGP / m2, based on floor areas, with some systems allowed for
based on evolving design (e.g. district cooling v split units)
Detailed Cost Plan ± 5% to 10% tolerance
› EGP / m2, based on quantities and unit rates

0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
EGP/m2
Electrical Engineering Works
Mechanical Engineering Works
Conveying Systems
Special Construction
Furnishings
Equipment
Specialties
Finishes
Doors and Windows
Thermal and Moisture Protection
Wood and Plastics
Metal Works
Masonry
Concrete Works
Site Construction
General Requirements



For the following two projects,
A and B, calculate:
1. Floor Area
2. Perimeter length
3. Wall Area
4. Wall-to-floor ratio

 Efficiency comes form plan shapes that are square (or circle)
 Consider whether it is better internal division (e.g. triangular plan)
 Less efficient shapes require more structure
 Consider a better enclosing wall to area ratio
 Core and circulation affected by choice of plan shape
 Short assessment

For the following three Plan Shapes A, B and C, calculate:
1. Floor Area 3. Wall Area
2. Perimeter length 4. Wall-to-floor ratio



 Tall structures are more costly – step
changes in height mean it is not a
uniform relationship of height to cost
 Storey heights can be cost sensitive
 VT costs to be considered
 More engineering costs for FP,
services performance
 Wider and more circulation space
needed
 Temporary works, lifting, etc. more
expensive
 Wind load will affect structural design

 Building arrangement affects the
cost of construction
 Consider:
› Sharing elements between buildings
› Cost and of constructing
› Ability to construct: Buildability
 For the four arrangements shown,
1. Which is most desirable?
2. Which is most efficient?
3. Which has least “buildability”?

Benchmarking is important to compare projects
› Expect differences and variation – explain them
› Separate abnormals (sub-structure, external works, infra, etc.)
Cost Plans are approximate, and not accurate by nature
Accuracy improves as design develops (± % tolerance
reduces)
Building shape, size and arrangement all affect costs 
understand how these affect your cost plan
Look at other efficiency parameters (net : gross area)

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