1. COST PLANNING AND ESTIMATION
Daniel Ng

2. 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

3. 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

4. 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. 5.1 Pre-Contract Cost Control – Recap
Cost Planning
Cost Planning Techniques
Single rate Methods
Multiple-rate Methods

6. 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.

7. 5.3 The Process

8. 5.4 Cost Planning Stages

9. 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

10. 5.4 Cost Planning Stages

11. 5.5 Cost Control during Design and Construction
RIBA Plan of Work 2013

12. 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.

13. 5.7 Types of Estimating Cost Control
Approximate Estimate
Cost Planning
Life Cycle Costing (Cost-in-use)

14. 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

15. 5.7 Types of Estimating Cost Control
Life Cycle Costing (Cost-in-use)
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