Cost Management

Are you regularly involved in construction projects where having an accurate idea of costs is important? Most people in the construction industry and design professions would say yes, particularly if public funds are being used where there are specific funding limits.

For many design professionals, the pressure to deliver a project “within the budget” clouds objective decision making particularly during planning and design stage. Sometimes there is a stated assumption of “we can’t afford that” or a fear of “what happens if we come in over budget?” The way to confront these concerns head-on is with accurate cost information at each stage of the project.

During primary budgeting, the basic scope of the project needs to be defined, with as much detail as may be reasonable to help avoid overlooking critical components that need to be accounted for. For example, saying there is a need for higher class office space can produce a reasonable range of budget numbers, but if the need for a large, the temperature-controlled computer center is needed within that office space, and is not accounted for in budgeting, then there is a disconnect between program needs and budget. Similarly, indicating a need for storage space can be fairly straight forward unless the hazard level is overlooked and does not account for special types of construction or mechanical/ electrical requirements.

Cost planning is a statement of the proposed expenditure for each section of a building related to a standard or quality.

Cost Planning

The design has progressed now and information available such as:-

1. Design team appointed including cost advisor
2. Drawings - Site plan, floor plans, sections through the building and Elevations 
3. Outline spec from client
4. Detailed spec from architect
5. Engineers/services engineers specification
6. Ground reports
7. Planning submitted
8. Surveys carried out

The cost limit is established and split into cost targets. These targets are checked as the design

Figure - 01

Target Cost for Lump Sum Cost

Figure-02

The philosophy of cost planning can be divided into two main ideological groups;

1. Costing a Design
2. Designing to the Cost 

Costing a Design

Refers to methods of estimation that can arrive at a cost for a given (predetermined) design. Formal drawings need to be in existence for this process to function.

Designing to a cost

Guiding the development of a scheme so that it not only sets a budget amount but ensures the project does not exceed but provides the client with the greatest value for money possible.

Basic competences are;

1. Understand the impact of early strategic decisions on project life cycle costs
2. Recognize the importance of sustainability through a wider understanding of how buildings perform in use
3. Harness benefits of interdisciplinary collaborative working with other professionals within the teams
4. Engage with the design team
5. Develop effective risk management strategies

Measurement for Cost Plan

Unit quantity and rate to tie up and Look at the units in the cost plan;

GF slab rn², Pile caps-Nr, Ground beams-m, Piling-m
Frame tonnage plus fittings & secondary steelwork
Doors-Nr 
Windows-m² or Nr
Upper floors- m²
Roof-m² and Eaves, Verges, Ridges-m
External walls-m² for different spec with deductions for openings
Internal walls-m² with deductions for openings (optional)
Finishes-m²
Skirting, WW boards-m
Fittings-NrMechanical & Electrical m² of GIA or a particular area

Builder’s work in connection % (BWIC)
External works m² for the area of hard standings and landscaping and m for curbs etc..
Drainage and Incoming services Item
Preliminaries - %, cost/week, cost/month
Contingencies - %

Checking the Quantities

Check GIA against floor and ceiling finishes

Check ground floor area against GF GIA

Check upper floors against UF GIA

Roof area to building footprint or ground floor

Wall finishes are Ix ext wall areas + 2x internal walls and partitions

Where you have used GIA you have incorporated correct

Completing the rates

Use past BOQ with similar nature construction

Rebase the costs using indices for time and location/ Rebase them argument basis.

Ensure the rate reflects the unit of measurement

Check your inputting is a correct example; decimal point in the right place

Check formulas correct

Services and provisional sums

Some costs are cost/m2 of GIA some are cost/m2 of a specific area

Enter currency and unit to each item

Lump sums should be included as an Item

Line through all sums when entered into cost plan

Cross checking the cost plan to specification

     All spec items are included somewhere in the detailed cost - IF NOT either add in or exclude

     Check that all the relevant sections of the cost plan are completed

These are the area must include in the Front Sheet;

Title of the project, date report Number

Parties

Procurement route and program

Schedule of areas (GIA)/exclusions

Site area

Ratio of building footprint to the site area

Cost summary

Review example cost plan

Aim of Reports

To record the benchmarking process that you have carried out on your cost plan

To note the checks you have carried out and what changes you made as a result

You are accountable to the client!

Worth 40% of the assignment one mark

Content of Report

Summary of headline details of the cost Plan

Benchmarking of the cost/m2 against two or three other SFCA or cost Models

Identify the main cost areas through pie diagrams etc and compare to the above

Look at % totals

Pareto rule!!

Figure-03

Summary of Report

Explain if rates, location, specification etc caused variances

Explain if your costs were re-adjusted after this exercise

'Why' is important and 'how'

Justify your costs

Look at floor/wall ratios

Look at site coverage

Planning Remember!

Compare like with like

Same time?

Same area?

Same specification?

Site specifics?

Procurement method?

Same size?

Cost Planning we have to consider!

Have all the residual risks been quantified and included

Have the costs been allocated effectively between the various elements of the cost plan

Do the elemental cost estimates reflect good value rather than cheap price?

Has a cost check been carried out?

Visual Presentation - Pie chart

Figure-04

Figure-05

Visual Presentation - Bar chart

Figure-06

Figure-07

What is the Quantity Surveyor (QS) ?

The Quantity Surveyor, also known as a Construction Economist, or Cost Manager, is one of a team of professional advisers to the construction industry. As advisers, they estimate and monitoring construction costs, from the feasibility stage of a project through to the completion of the construction period. After construction they may be involved with tax depreciation schedules, replacement cost estimation for insurance purposes and, if necessary, mediation and arbitration.

Quantity Surveyors work narrowly with Architects, Financiers, Engineers, Contractors, Suppliers, Project Owners, Accountants, Insurance Underwriters, Solicitors and Courts and with all levels of Government authorities.

Quantity Surveyors get their name from the Bill of Quantities, a document which itemizes the quantities of materials and labour in a construction project. This is measured from design drawings, to be used by the contractors for tendering and for progress payments, for variations and changes and ultimately for statistics, taxation, and valuation.

At the feasibility stage, quantity surveyors use their knowledge of construction methods and costs to advise the owner on the most economical way of achieving their requirements. Quantity Surveyors may use techniques such as cost planning, estimating, cost analysis, cost-in-use studies, and value management to establish a project budget.

During design, the Quantity Surveyor ensures that the design remains on budget through cost management. Essential additions are offset by identified other savings. On completion of design and drawings, the Quantity Surveyor may prepare a Bill of Quantities, which is issued with the specification, for use by contractors in submitting tenders. The contractor's quantity surveyors/estimators generally prepare tenders and may price alternatives for consideration.

During construction, the quantity surveyors are called on to fairly value progress payments at regular intervals. They will also value changes to design or quantities which may arise by reference to appropriate Bill of quantity rates. The contractors, Quantity Surveyor / Contract The administrator will have prepared claims for progress payments and additional work.

When construction is complete the quantity surveyor can produce depreciation schedules of the various project components and advise on realistic insurance replacement costs. In the case of construction disputes, the quantity surveyor is often called on as an expert witness, and some Quantity Surveyors act as Arbitrators. Both the contractors and owners Quantity Surveyors will be involved in this.

In addition to new projects, Quantity Surveyors also use their skills in the refurbishment of old buildings, alterations to existing buildings and insurance replacement estimates. In public authorities they maintain cost statistics on a state or nation-wide basis, and there are opportunities for academic careers in the building disciplines.

Quantity Surveyors must have orderly and analytical minds and be prepared to work to very rigid time schedules. As decisions involving large sums of money are often made using information produced by them they must be accurate in all aspects of their work.

Quantity Surveyors work in the private sector with consulting firms, in the public sector mainly with the State Government Departments / Authorities, and increasingly with Building Contractors, Financiers, Property Developers, Project Managers, and Universities.

Structural Steel Building Construction

Up to the beginning of Second World War the majority of tall buildings were constructed with structural steel frames. The shortage of steel that followed the Second World War encouraged the usage of reinforced concrete frames for buildings up to about 1980. Since 1980, usage of structural steel frames has increased as the prices were competitive.  There have been many technological advances in steel products and materials in recent years. The significant improvements in engineering and design techniques have led to the development of structural systems that are compatible with more conventional construction materials. Designers and architects today will combine a steel building system with glass, wood, and masonry facades. This adds an aesthetic component while preserving the true characteristics of a sturdy steel building system.

Advantages of steel construction

Ø  Highest strength to weight ratio in any building construction material. For the same span and load, a steel beam requires less depth than a concrete beam, which can be helpful when constrained by vertical clearance requirements.

Ø  Steel is environmental friendly material. Steel is recyclable, using old cars, buildings, bridges, steel cans, etc. Steel is the world’s most versatile material to recycle. steel framing results in a reduction in construction waste that would normally end up in a land fill.

Ø  Components can be used again and again.

Ø  Steel construction is a fast method of construction. Prefabricated - frames assemble quickly. Site work is less thus reducing labour cost and delay due to bad weather conditions. The in-factory manufacture of steel building systems reduces the need for skilled on-site construction labour otherwise required for conventional building systems

Ø  Steel buildings also have great ease of expansion. Steel building systems can be modified quickly and economically before, during, or after the building is completed. Steel buildings can also be designed so that future expansion of the building can be completed without disrupting daily work operations.

Ø  Steel construction of buildings with steel components is resistant
to termites and other destructive insects. Steel will not rot. Not vulnerable to any type of fungi, mole or any organism.

Ø  Dimensionally Stable in any Climate- does not expand or contract with moisture or temperature changes.

Ø  Non combustible to fire- does not burn and will not contribute fuel to the spread of fire.

Ø  Lightening resistant because steel framing provides multiple conductive paths directly to the ground.

Ø  Lower maintenance costs.

Disadvantages

Ø  Thermal Efficiency- One of the biggest disadvantages of steel is its thermo conductivity. Steel is over 400 times more conductive of heat than wood.

Ø  Steel is an expensive material (much more expensive than masonry or concrete)

Ø  Needs fire protection

Ø  Needs protection from corrosion

Properties of mild steel

Strength

Steel is strong in both in tension and compression with permitted working stresses of 165, 230 and 280 N/mm²   for grades 43, 50 and 55 respectively. The strength to weight ratio of mild steel is good so that mild steel is able to sustain heavy loads with comparatively small self weight.

Elasticity

Ability of a deformed structural member to return to its original shape and size when the forces causing the deformation are removed is called elasticity of that material. The ratio of stress to strain, which is known as young’s modulus (the modulus of elasticity), gives an indication of the resistance of the material to elastic deformation. If the modulus of elasticity is high the deformation under stress will be low. Steel has a high modulus of elasticity 200Kn/mm² and therefore a comparatively stiff material. Under a given load, deflection of steel will be low compared with other structural material.

Ductility

Ductility is the mechanical property used to describe the extent to which materials can be deformed plastically without fracture. Mild steel is a ductile material which is not brittle and can suffer strain beyond the elastic limit through what is known as plastic flow, which transfers stress to surrounding material. Because of the ductility of the steel the plastic method of analysis, which makes allowance for transfer of stress by plastic flow and so results in section less than would be determined by the elastic method of analysis which does not make allowance for the ductility of steel.

Resistance to corrosion

Corrosion of steel occurs as a chemical reaction between iron, water and oxygen to form hydrated iron oxide, commonly known as rust.  Because rust is open grained and porous a continuing reaction will cause progressive corrosion of steel. Pollutants in air accelerate corrosion as sulphur dioxides from industrial atmospheres and salt in marine atmospheres. The continuing process of corrosion may eventually, over the course of several years, affect the strength of steel. Mild steel should therefore be given protection against corrosion.

Fire Resistance

Although steel is non-combustible and does not contribute to fire it may loose strength when its temperature reaches a critical point in a fire in a building. A temperature of 550 C is generally accepted as the critical temperature for steel, which will generally be reached in the early stages of a fire. Therefore fire protection systems should be provided.                       

Steel structures

Steel frame buildings consist of a skeletal framework which carries all the loads to which the building is subjected. The sections through three common types of buildings as follows;

(1) single-storey truss and lattice roof building;

(2) single-storey portal frame building;

(3) medium-rise braced multi-storey building.

By using these three types structures, steel frame buildings such as factories, warehouses, offices, flats, schools, etc could be constructed.

The building frame is made up of separate elements-the beams, columns, trusses and bracing. These must be joined together and the building attached to the foundations.

Structural elements

As mentioned above, steel buildings are composed of distinct elements:

Ø  Beams and girders: - members carrying lateral loads in bending and shear;

Ø  Ties: - members carrying axial loads in tension;

Ø  Struts, columns or stanchions:-members carrying axial loads in compression. These members are often subjected to bending as well as compression;

Ø  Trusses and lattice girders: - framed members carrying lateral loads. These are composed of struts and ties;

Ø  Purloins: - beam members carrying roof sheeting;

Ø  Sheeting rails: - beam members supporting wall cladding;

Ø  Bracing: - diagonal struts and ties that, with columns and roof trusses; form vertical and horizontal trusses to resist wind loads and hence provided the stability of the building.

Joints connect members together such as the joints in trusses, joints between floor beams and columns or other floor beams. Bases transmit the loads from the columns to the foundations.

Single storey Steel lattice truss construction

Single bay steel frame construction is one of the most economical construction. The small section steel members of the truss can be cut and drilled with simple tools, assembled with bolted connections and speedily erected without the need of heavy lifting equipments. The considerable depth of the roof frames at mid spans provides sufficient strength in supporting loads.

Portal Frames

A portal frame is distinguished by the rigid connection of the rafters to the posts of the frame so that the moments are distributed through the rafter and posts. In designing portal frames plastic theory will be applied.

                                                                                                 In general, short span portal frames are fabricated off site as one frame and medium span portal frames can be fabricated in two halves for easy transporting and handling. These are assembled at site with bolted connection using high strength friction grip bolts.

The single-storey clear-span building is in constant demand for warehouses, factories and many other purposes. The clear internal appearance makes it much more appealing than a trussed roof building and it also requires less maintenance.

Structural Steel Frames – Multi-storey

               The conventional steel frame is constructed with hot rolled section beams and columns in the form of a skeleton design to support the whole of the imposed and dead loads of floors, external walling or cladding and wind pressure. The arrangement of the columns is determined by the floor plans, horizontal and vertical circulation spaces and the requirements for natural light to penetrate the interior of the building.

                                                                            The figure 3 shows the typical rectangular grid skeleton steel frame. In general, the most economic arrangement of columns is on a regular rectangular grid with columns spaced at 3 to 4 m apart, parallel to the span of floors which bear on flow beams spanning up to 7.5m with floors designed to span one way between main beams.

This arrangement provides the smallest economic thickness of floor slab and least depth of floor beams, and therefore least height of building for a given clear height at each floor level.

Figure04 is an illustration of a typical small skeleton steel frame designed to support one way span floor on main beams and beams to support solid walls at each floor level on the external faces of the building. This rectangular grid can be extended in both directions to provide the required floor area.

In this type of  construction,  all  live  and  dead  loads  are  carried by  the  structural-frame  skeleton.  For this reason, the exterior walls are non load bearing curtain walls. Roof and floor  loads  are  transmitted  to  beams  and  girders,  which are,  in  turn, supported  by  columns.  The horizontal members or beams that connect the exterior columns are called spandrel beams.  If  you  add  additional  rows  of columns and beams, there is no limitation to the area of floor  and  roof  that  can  be  supported  using skeleton construction.

Where it is inconvenient to have closely spaced internal columns, a larger rectangular or square grid is used as illustrated in Fig.7, where each bay is divided by secondary beams spaced at up to 4.5 m apart to carry one way span floor slabs with the main floor beams which are supported by columns in turn supporting the secondary beams. This arrangement allows for the least thickness of floor slab , that is the least weight of construction. However, with increase in span of main floor beams goes increase in their depth and for a given minimum clear floor height between floor and soffit of beam this larger grid frame makes for greater overall height of building than does a smaller column grid.

Wind Bracing

The connections of beams to columns in multi-storey skeleton steel frames do not generally provide a sufficiently rigid connection to resist the considerable lateral wind forces that tend to cause the frame to rack. The word rack is used to describe the tendency of a frame to be distorted by lateral forces that cause right angled connections to close up against the direction of the force in the same way that books on a shelf will tend to fall over if not firmly packed on place.

To resist racking caused by the very considerable wind forces acting on the faces of a multi-storey building it is necessary to include some system of  bracing between the members of the frame to maintain the right angled connection of members. The system of bracing used will depend on the rigidity of the connections, the exposure, height, shape and construction method of the building.

In the buildings where the access and service core is in the centre of the building and the plan is near square is commonly braced against lateral forces by connecting cross braces in the two sides of the steel frame around the centre core which are not required for access as illustrated in Figure 8. Wind loads are transferred to the braced centre core through solid concrete floors acting as plates or by bracing steel framed floors.

      With the access and service core on one face of the frame as illustrated in Figure 09, the wind bracing can be connected in two opposite sides of the service core frame, leaving the other two sides for access and natural lighting. Wind forces are transferred to the braced service core by horizontal bracing to one or more of the framed floors.

With the skeleton steel frame which is rectangular on plan and has main facades much wider than end walls, it is common to connect cross braces to the end wall frames as illustrated in figure 8 to resist the racking effect of the wind on the larger wall areas.

Barry (1996, pp40-45)