Professional Documents
Culture Documents
COST MANAGEMENT
COST PLANNING
What is Cost Planning?
Work involved in Controlling the Design of a
Building within the Set Parameters of Cost, Area
and Quality
Cost Planning is Proactive - Working with PM/DM
team during the Needs Study & Design Phases of
the Project. It Precedes the issue of that stage
document
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COST PLAN
What is a Cost Plan?
A written description of Cost broken in to
Elements, Levels & Areas, subject to constant
updating and reconciliation as the design evolves
Cost Plan is NOT an Estimate
Cost Plan facilitates Designing to a Cost
ESTIMATE
What is an Estimate?
A Cost applicable to a design at a Set Freeze
Point
Different levels of Estimate - Indicative, Budget,
Contract
Usually an Indicative Estimate forms the Initial
Cost Plan
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ESTIMATION
What is Estimation?
RELATIONSHIP OF COST
PLANNING TO ESTIMATING
The original Cost Plan can be extracted from an indicative
estimate for a set design at a particular point in time
The budget and contract estimates should be
confirmation of the Cost Planning that has taken place as
the design has progressed i.e. management cost checks
Cost Planning requires a working knowledge of all
disciplines, and the ability not to just cost what is on the
drawings - to allow for the real effects when working
documents are finalised - ability to see in the future
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CONTROL OF COST
The costs and profitability of the project are largely
determined at the design stage. As the project proceeds
further in to construction stage, risk of losses remain
present, but opportunities for cost reduction or profit
improvement diminish.
Cost Planning enables the PM to observe and control the
interaction of design and cost during the design process,
and maintain the overall scheme within the budget
limitations.
Cost Planning ensures a direct relationship between
initial and final project cost
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Inception/ Appraisal
Establishing the
need for the project
Identification of
Clients
requirements
Option Appraisal
Initial Costing
Feasibility/ Design
Brief
Appoint PM &
Design Team
CDM Co-ordinator
Surveys &
exploratory works
Development of
Strategic Brief
Feasibility Study
Outline Business
Case
Establish
Critical
timescales
Concept Design/
Outline Proposals
Develop Outline
proposals &
preliminary Design
Preparation of Initial
Cost Plan & master
programme
Risk Assessments
Assessment of
Procurement routes
Consultation
s&
Approvals
Detail
proposal/Design
Development
Detailed Design
Development
Planning
Permissions
Review programme,
risks & procurement
options
Consultations &
Approvals
Scheme is
Frozen
Final Proposal/
Technical Design
Development of
Final Proposal
Incorporation of
Specialist Reqmt, IT,
AV etc.
Review Procurement
Strategy, Cost Plan
& programme
Internal
Consultations i.e.
security, fire, IT
Sign-off proposal by
the Client
Production
Information
Preparation of
Detailed Coordinated drawings
Final Confirmation of
materials & finishes
Complete
Specifications,
components
drawings, BoQs
Building Warrant
Application
Review Procurement
Strategy, Cost Plan
& programme
Review of Green
Bldg
Tender
Documentation
Preparation of
Tender
Documentation
Complete Pre-tender
EH&S plan
Final Procurement
Strategy, Cost Plan
& programme
Tender Action
Identification of
potential contractor
Tender Report
Contractors
Interviews
Approval of Client to
appoint Contractor
Mobilisation
Building contractor
prepares to
commence on site
Main contractor
appoints subcontractors
Onsite
Construction Works
Monitoring of works
at site
Change Control
Management
Handover of the
project to the Clients
Occupation
Removals
Occupation
Utilization of the
building
Defects Liability
Period
Settlement of Final
Accounts
Post Contract
Review & Client
Feeback
Construction
Life Cycle
Fit-out &
Furnishings
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Indigenizing RIBA!
Stage
Project
Definition
Concept
Schematic
Indicative Cost
Plan
User Brief/
Vision
Document
Cost Plan
Budgetory
Schematic
Costing based on
Design
Elementary BoQ
Design
Tender BoQ
Development
Detailed
Designs
Client
Consultants
PLEASE NOTE:
Cost Planning is of greatest use in Design & Construction
projects. It is less relevant when we have limited control over
the design (i.e. construction management projects)
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PROJECT ENGINEERING
Design options evaluation - project engineering skills are
required - Why not try? Can it be built? Etc.
Various options should be compared to see which is the
OPTIMUM SOLUTION - this is not purely a ?? of price
It is important when considering different options to take
in to account other items that may be effected
All details should be queried where a complicated
solution has been proposed. These small details can cost
us a great deal when we get to actual construction on site.
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LEVEL OF DETAIL
Depends on information and time available
1. Project definition stage
2. Concept design stage
3. Schematic plan stage
4. Design Development
5. Final Design
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DESIGN DEVELOPMENT
What is available at this stage?
Alternative design options
Preliminary drawings
Preliminary specifications, finishes schedule, door
schedules etc.
Detailing
Costing Method?
Bulk quantity take-offs to compare design alternatives
Check all preliminary drawings conform to cost plan parameters
Check all detailing
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FINAL DESIGN
What is available at this stage?
All final AFC drawings, specifications etc.
Costing Method?
Examine to ensure that all corrections have been
incorporated and that there are no last minute
inclusions
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Important Factors
Formulation of Cost Plan based on design information level.
Identification of Cost Parameters and Elements.
Identification of Cost Heads for each Element.
Estimation of Cost Heads based on preliminary concept
drawings and established database of market prices.
Comparison of Alternative Designs on costs.
Identification and estimation of cost for ongoing design
changes.
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QUESTIONS
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