Cost Planning of Buildings, 7th Edition

by Douglas J. Ferry; Peter S. Brandon (University of Salford); Jonathan D. Ferry

• ISBN13: 9780632042517
• ISBN10: 0632042516
• Edition: 7th
• Format: Paperback
• Copyright: 1999-09-01
• Publisher: Wiley

Summary

This textbook provides the wider understanding of the construction process and techniques which is required by today's cost planners in their ever important role as the client's financial manager. The book has been revised to reflect the move from the public to the private sector and the greater incidence of alteration and refurbishment work. The text has been rewritten in a more modern, user-friendly format.

Author Biography

Douglas J. Ferry Ph.D., FRICS was formerly Dean of Architecture and Building, New South Wales Institute of Technology, and Research Manager with CIRIA.

Table of Contents

Preface	xi
Introduction	1	(2)
Introduction	3	(6)
Need for cost estimating	3	(1)
Price-in-advance system	4	(1)
Origin of the quantity surveyor	4	(1)
Cost estimating prior to tender	5	(1)
Single price rate estimating	5	(1)
Advent of cost planning	6	(2)
Summing-up	8	(1)
Further reading	8	(1)
The Impact of Information Technology	9	(17)
History of IT concepts related to cost planning	12	(1)
Research into IT	13	(1)
Four key applications	14	(11)
Summing-up	25	(1)
A Three-Stage Cost Planning Strategy	26	(5)
Scope of cost planning and control	26	(2)
The role of the cost planner	28	(1)
Office organisation	29	(1)
Summing-up	30	(1)
STAGE 1 THE BRIEF AND THE BUDGET	31	(58)
Developers' Motivations and Needs	33	(8)
Developers and development	33	(3)
Cost-benefit analysis (CBA)	36	(1)
The client's needs	37	(3)
Summing-up	40	(1)
Money, Time and Investment	41	(7)
Present and future values	41	(1)
Construction costs in relation to time	42	(1)
Financing charges	42	(1)
Methodology	43	(1)
Calculations	43	(4)
Summing-up	47	(1)
Developer's Cash Flow	48	(8)
Timing of payments and receipts	48	(1)
Discounted cash flow (DCF)	48	(1)
Criterion rate of return method used for comparison purposes	49	(1)
A simple worked example	50	(1)
A further example	50	(2)
Care required with DCF techniques	52	(3)
Summing-up	55	(1)
Whole-Life Costs	56	(16)
Basis for whole-life costing	56	(1)
A simple illustration	56	(1)
Components of whole-life costs	57	(1)
A worked example	57	(3)
Inflation	60	(1)
Disadvantages of whole-life costs assessment	61	(2)
Practical use of whole-life costing techniques	63	(1)
Important uses for whole-life costing	64	(1)
Reasons for accepting higher capital costs	64	(1)
Whole-life costs of mechanical and electrical (M&E) installations	65	(2)
Whole-life costs of the total project	67	(1)
Information on maintenance costs	67	(1)
Simulated and estimated costs	68	(1)
Taxation and grants	69	(1)
Sensitivity analysis	69	(1)
Summing-up	70	(1)
Further reading	71	(1)
The Client's Budget	72	(12)
Total cost	72	(1)
Building cost	72	(1)
Land values and development	73	(1)
Role of the valuer	74	(1)
Development value	74	(1)
Effect of building cost on land value	75	(1)
Social considerations of land use	75	(1)
Effect of land values on cost planning techniques	76	(1)
Grants, subsidies and taxation concessions	77	(1)
Land costs and social development	78	(1)
Calculating building costs	79	(2)
Cost of financing the project	81	(1)
Where the money comes from	81	(2)
Budgeting for refurbishment work	83	(1)
Budgeting for new-build projects on very restricted urban sites	83	(1)
Summing-up	83	(1)
Further reading	83	(1)
Some Budgetary Examples	84	(5)
Budget examples	84	(2)
Sensitivity analysis	86	(1)
Need for caution	87	(2)
STAGE 2 DESIGNING TO THE BUDGET	89	(148)
Design Method and Cost Advice	91	(18)
The building design process	91	(1)
The design team	92	(1)
The RIBA Plan of Work	93	(1)
Comparison of design method and scientific method	94	(1)
A conceptual design model	95	(2)
Design techniques	97	(7)
Generally	104	(1)
Recognition of design methods in cost information systems	105	(3)
Computer usage	108	(1)
Summing-up	108	(1)
Further reading	108	(1)
Introduction to Cost Modelling	109	(11)
Prototypes	109	(1)
Other types of model	110	(1)
Objectives of modelling	110	(1)
Traditional cost models	111	(1)
Horses-for-courses	112	(1)
The pyramid	112	(1)
Single price rate methods	112	(4)
Elements	116	(1)
Features	116	(1)
Standard Method of Measurement items -- the BQ as a cost model	117	(1)
Operations and resources	117	(1)
Spatial costing	118	(1)
Computer developments	118	(1)
Summing-up	119	(1)
Further reading	119	(1)
Design-based Building Cost Models	120	(29)
Definition	120	(1)
The bill of quantities	121	(1)
Elemental cost analysis	122	(16)
Design cost parameters	138	(1)
Building shape	139	(4)
Height	143	(2)
Optimum envelope area	145	(1)
Further cost modelling techniques	146	(1)
Classification of models	147	(1)
Summing-up	147	(1)
Further reading	148	(1)
Cost Data	149	(27)
Introduction	149	(1)
Problems with computer models	149	(1)
Types and origins of cost data	150	(2)
How reliable is cost data?	152	(1)
Occupation costs	153	(1)
Problems with site feedback	154	(1)
Problems with analysis of BQs	155	(1)
Variation in pricing methods	155	(2)
Variation in BQ rates for different jobs	157	(1)
Research into variability	158	(1)
The contractor's bid	159	(4)
The structuring of cost data	163	(1)
An integrated system of groupings?	164	(1)
Sources of data	164	(2)
Published cost data	166	(9)
Future development	175	(1)
Summing-up	175	(1)
Cost Indices	176	(21)
The cost index	176	(1)
Use of index numbers	176	(2)
Approaches to constructing an index	178	(1)
The factor cost index	179	(4)
The tender-based index	183	(2)
Published forms	185	(6)
Comparison of index performance	191	(2)
Problems in constructing and using cost indices	193	(2)
Which type of index to use	195	(1)
Summing-up	196	(1)
Cost Planning the Brief	197	(16)
The brief	197	(1)
An iterative process	197	(1)
Preliminary estimate based on floor area	198	(3)
An example of a preliminary estimate	201	(7)
An example using BCIS data	208	(1)
Cost reductions	208	(3)
Data sources	211	(1)
Mode of working	211	(1)
Summing-up	212	(1)
Cost Planning at Scheme Development Stage	213	(24)
Elemental estimates	213	(2)
A typical elemental rate calculation	215	(1)
Examination of alternatives	216	(2)
Need for care	218	(1)
The cost plan	218	(2)
Specification information in the cost plan	220	(1)
Elemental cost studies	221	(1)
Foundations	222	(1)
Frame	222	(1)
Staircases	223	(1)
Upper floors	224	(1)
Roofs	224	(1)
Rooflights	225	(1)
External walls	225	(1)
Internal walls and partitions	225	(1)
Windows	226	(1)
Doors	227	(1)
Floor, wall and ceiling finishes and decorations	227	(1)
Engineering services	227	(1)
Joinery fittings	227	(1)
Cost studies generally	227	(1)
Preparation of the cost plan	228	(7)
Presentation of the cost plan	235	(1)
Summing-up	235	(2)
STAGE 3 CONTROLLING THE COST	237	(96)
Building Resources and Costs	239	(27)
The construction industry	239	(1)
Nature of the construction industry	240	(1)
Problems of changes in demand	240	(1)
Costs and prices	241	(1)
The contractor's own costs	242	(3)
Two typical examples	245	(1)
Cash flow and the building contractor	246	(13)
Allocation of resource costs to building work	259	(1)
System building, prefabrication and cost	259	(1)
Economic problems of prefabrication	260	(1)
Traditional factors in favour of site production	261	(1)
Other economic problems which have come to light with experience of prefabrication	261	(2)
Suitable and unsuitable fields for prefabrication	263	(1)
A piece of false reasoning	263	(1)
A cool look	263	(1)
Summing-up	264	(1)
Further reading	265	(1)
Resource-based Cost Models	266	(15)
Effect of job organisation on costs	266	(1)
A well managed construction project	266	(1)
Traditional vs resource-based methods of cost planning	266	(1)
Value added tax (VAT)	267	(1)
Resource-based cost models	267	(3)
Resource programming techniques	270	(1)
The bar chart (or Gantt chart)	270	(2)
The network diagram	272	(3)
Resource smoothing	275	(1)
Resource-based techniques in relation to design cost planning	275	(2)
Obtaining resource cost data for building work	277	(1)
Identification of differing variable costs	278	(1)
Costing by `operations'	278	(1)
Use of resource-based cost information for design cost planning	279	(1)
Summing-up	280	(1)
Further reading	280	(1)
Cost Control at Production Drawing Stage	281	(12)
Cost checks on working drawings	281	(1)
Carrying out the cost check	282	(2)
Use of an integrated computer package at production drawing stage	284	(1)
Use of resource-based techniques at production drawing stage	285	(1)
Cost reconciliation	285	(5)
Completion of working drawings and contract documentation	290	(1)
A critical assessment of elemental cost planning procedures	290	(2)
Summing-up	292	(1)
Methods of Procurement	293	(13)
Meeting the client's needs	293	(1)
Standard Forms of Building Contract	293	(1)
The Construction Act 1996	294	(1)
Basic forms of building contract	294	(1)
Building contracts in detail	295	(6)
Managed projects	301	(4)
Summing-up	305	(1)
Further reading	305	(1)
Real-time Cost Control	306	(21)
Why `real-time'?	306	(2)
The problem of information	308	(1)
Real-time cost control of lump sum contracts based on BQs	309	(5)
Real-time cost control of negotiated contracts	314	(1)
Real-time cost control of cost reimbursement contracts	315	(3)
Real-time cost control of management contracts	318	(1)
A spreadsheet cost report on a management contract	318	(2)
Control of cash flow	320	(2)
Cash flow control of major development schemes	322	(1)
Control of short-term cash flow	323	(1)
Payment delays on profit projects will be to the client's advantage	324	(1)
Cost control on a resource basis	324	(2)
Summing-up	326	(1)
Cost Planning and Control of Refurbishment and Repair Work	327	(6)
Lump sum competitive tenders inappropriate	327	(1)
Elemental cost planning inappropriate	328	(1)
Conflict of objectives	328	(1)
Uncertainty	328	(1)
Safety	329	(1)
Occupation and/or relocation costs	329	(1)
The need for a liaison manager	330	(1)
Costs excluding occupation	331	(1)
Summing-up	332	(1)
Further reading	332	(1)
Appendix A List of Elements from Standard Form of Cost Analysis	333	(16)
Appendix B Discounting and Interest Formulae and Tables	349	(24)
Index	373