COST PLANNING AND ESTIMATION Daniel Ng Danielng.trentglobal@yahoo.com

Course outline Overview of Cost Planning Cost Planning Techniques Approximate Estimating Elemental Method Cost Planning at Various Stages of Design Resource Analysis Cash Flow Valuation Final Accounts

Teaching Scheme DATE CHAPTER 11 April 2016 1. Overview of Cost Planning 13 April 2016 2. Cost Planning Techniques 3. Approximate Estimating 18 April 2016 4. Elemental Method 20 April 2016 5. Cost Planning at Various Stages of Design 25 April 2016 6. Resource Analysis 27 April 2016 7. Cash Flow 8. Valuation 3 May 2016 9. Final Accounts 7 May 2016 Exam

5. Cost Planning at Various Stages of Design 5.1 Pre-Contract Cost Control – Recap 5.2 The Cost Plan 5.3 The Process 5.4 Cost Planning Stages 5.5 Cost Control during Design and Construction 5.6 Definition of Cost, Price and Value 5.7 Types of Estimating Cost Control

5.1 Pre-Contract Cost Control – Recap Cost Planning Cost Planning Techniques Single rate Methods Multiple-rate Methods

5.2 The Cost Plan To find out cost To keep within budget Close gap between budget estimate and Contractor’s tender Efficient design process Value for money Helping the client decide how it wants to allocate the budget to the various parts of the project.

5.3 The Process

5.4 Cost Planning Stages

5.4 Cost Planning Stages Set budget Cost model Draft cost plan Benchmark draft Value engineer Design team buy-in Report draft cost plan to client Client sign-off Publish cost plan Cost check design development against cost plan Confirm or revise cost plan

5.4 Cost Planning Stages

5.5 Cost Control during Design and Construction RIBA Plan of Work 2013

5.6 Definition of Cost, Price and Value Cost is an amount that has to be paid or given up in order to get something. E.g. Procurement cost, construction cost and life cycle cost. Price is the amount a seller willing to exchange the product for. Price = Cost + Profits Value is what the building is worth.

5.7 Types of Estimating Cost Control Approximate Estimate Cost Planning Life Cycle Costing (Cost-in-use)

5.7 Types of Estimating Cost Control Life Cycle Costing (Cost-in-use) Life cycle costing looks at the cost of a component, an elemental or a building, over the life of the facility and compares alternative solutions to find the best long-term value for the client. It considers: Capital or initial costs Running costs Maintenance costs Replacement costs Demolition or disposal costs

5.7 Types of Estimating Cost Control Life Cycle Costing (Cost-in-use) Image from: http://sekisui-gbp.com/technology/lifecyclecost/index.html