Construction Economics – Cost Comparison

1.0Executive Summary.

1.1As requested I have produced a project cost plan for the above stated project. I have based the cost plan on the various elemental sections of the project.

1.2I used a previous project, and uplifted all the rates to suit the specifics of this project using the Building Cost Information Service (BCIS).

1.3The cost plan is project specific, and the m² rates produced have been manipulated accordingly to suit the specifics of the project.

2.0Introduction.

2.1The cost plan is broken into eight main elemental sections which are listed below:

* Substructure.* Superstructure.* Internal Finishes.* Fittings.* Services.* External Works.* Contingencies.

2.2Some of these main sections then have more specific elements incorporated as you can see from the cost plan. Superstructure for example contains frame, upper floors, stairs etc.

2.3For each of these sections I have calculated a m² rate, and then multiplied this by the relevant m² quantity to calculate a total for that element. This is mainly the Gross Floor Area (GFA) however in some cases a different quantity is required as a result of the element. For example stair cases are calculated in number.

2.4I have built in the OHP at ten per cent however with the current economic climate this is most likely to be reduced. I would recommend you try, and use the current economic climate to try, and reduce the costs for this project.

3.0 Evaluation of costings for project.

4.1 To produce this cost plan, and due to the lack of information in some areas I have made various assumptions. These are detailed below:

* There are no elaborate or expensive designs.* The project is of a basic simple shapes such as square or rectangular. * I have assumed the location of the proposed project is either East Anglia or the Southwest as these are the locations that reflect the BCIS location factor given. * The project will begin in the first quarter of 2010.

* I have priced for a precast staircase as this would be a more suitable choice for this project. This is because there is 5no. and a precast staircase would be much less labour intensive, and consequently cheaper.

4.2 The project’s cost plan has been built up using a previous project very similar to this one; the details of this project are attached in appendix 5.1.

4.3 The rates obtained from this project have then been uplifted, and manipulated to take into account the current day market prices, and conditions, and the location of the proposed project against the comparison project. The BCIS details / figures used to calculate these rates are attached in appendix 5.2, and 5.3.

4.4 To elaborate further the costs of the previous project are based on 2006 prices and the economic climate then. However the prices and current economic climate of today are a lot different. Consequently an adjustment needs to be made. This is calculated using the Tender Price Indexes (TPI) from the BCIS attached in appendix 5.3.

4.5 Furthermore the comparative and proposed projects have been built in different locations. The location of a project will affect the costs of a project. For example labour rates will be cheaper in certain areas, and if the project is in a remote area there will be additional costs to get materials to the project.

4.6 Using the rates from the previous project, and uplifting these rates as just detailed I was able to achieve a m² for the various elementsof this project as shown on the project cost plan.

4.7 However because the projects were not exactly like for like some of the other rates had to be further manipulated, or rates even created, to ensure that the rates were project specific. These areas are listed below:

* Substructure.* Upper Floors.* Roof.* Stairs.* External Walls.* Sanitary Appliances.

3.8The exact calculation for these rates can be complex when looking at them for the first time, and you did not request to see them in this submission. To run through the calculations, and all the backup material for this submission in detail I would suggest setting a up a meeting so I can explain fully.

4.0Conclusion.

4.1In conclusion the project cost plan that I have produced will give a good indication to the costs for this project.

4.2The rates, and costs I have calculated have been done with the specifics of the project in mind, and have been manipulated accordingly.

4.3However the costs are not firm, and are by no means definitive. To achieve a higher level of cost certainty the various works will have to be sent to tender, bid analysis completed etc.

4.4From these initial calculations a base mark is created in terms of costs, these costs can now be compared against to try, an achieve the desired project at the desired cost.

5.0Appendices.

5.1BCIS print out of comparison project used.

5.2BCIS location factor indexes used to uplift the rates / costs from the comparison project to the proposed project.

5.3BCIS tender price index which is used to uplift the rates from past prices to current day, and even future prices (these are forecasted).

6.0 References.

6.1Ashworth, Alan, and Hogg Keith, Willis’s Practice and Procedure for the Quantity Surveyor, 12th Edition, Blackwell Publishing Ltd, 2007.

6.2Langdon Davis (ed), Spons architects, and builder’s price book 2009, Taylor & Francis, 2009.

6.3Kirkham, Richard, Cost Planning of Buildings, 8th Edition, Blackwell Publishing, 2007.

6.4Millington, A.F., An Introduction to Property Valuation, 5th Edition, Bell and Bain Ltd, 2006.

6.5www.bcis.co.uk – accessed 26th October 2009.

NB:There has been no direct referencing in the text as this assignment was conducted as a professional report.