Cost Control Notes

HAM heavily based on price, new one is all kind of based on prices and contractor and it has more
points if its bigger????
Effect of procurement and tendering routes
2.3 Cost planning
2.3.1 sources of cost data
-office library
Ability to identify suitable sources of historical cost data, gather, update and adapt as necessary and
synthesise into models of future expenditure
Done with Lesley
2.3.2 cost forecasting
Costing before contracts are handed out
 Need estimate of costs prior to contract – to match client expectations and design principles
(.e. ensure design is not too expensive). Also to assist clients in establishing overall finance
for project in place in advance. Allows for amendments to design prior to contract pricing to
ensure project and budget match.
 Initial budgeting will be indicative – tenders for works may be higher or lower depending on
state of market and position of individual businesses need for work
 BICS Cost of Measurement tool. Online version on RICS website

BCIS Schedule of Rates
BCIS Schedule of Rates is an online tool that provides access to building pricing information
quickly and accurately. Save time & money by using our independent data source for cost
estimating. The service is an online version of the BCIS Price Books that is updated fortnightly &
provides a range of datasets including civils, small and large projects, alterations and
refurbishment, maintenance and dilapidations.
Quantity Surveyors – employed to provide costs for projects.
2.4 measurement
2.4.1 measurement principles
Arithmetical proficiency in dimension calculation
Ability to set out measurement calculations following professional conventions
Mathematical spreadsheet skills applied to cost planning and control
Northern method
In effect I think this section should summarise the above points. I.e. when providing a
budgeting assessment for a project it is essential that (i) they are calculated accurately
(numerical errors will lead to obvious budgeting errors.
Advantages of standardised basis for costing:
- ensures all tenderers provide cost estimates on a consistent basis – fair competition
- all parties can understand accurately what is required – minimise potential
misunderstandings – otherwise could cause significant problems during the implementation of
the contract (i.e. oh, we haven’t budgeted for that…).
2.5 Post contract cost control
2.5.1 objectives of post contract cost control
Upkeep and function cost?
Understanding of post contract cost monitor and control methods
Although contracts specify many aspects of build contract in detail other aspects are not
determined until contract is in progress (e.g. confirmation of internal fittings etc). Essential for
client that there is accurate control over costs during the contrat. On a similar basis some
contracts are defined by standards (e.g. internal doors to meet certain BS standard) –
therefore need to have control/checking procedures that contract standard/specifications are
being met.
Second reason is that for many contracts client requirements will change during the contract
and pre-contract period (but after contract is awarded). Two examples: commercial
development. Through early design stages and planning appn stage clients are actively
marketing units – so in a commercial retail/office development potential occupiers may be
identified who have variable space requirements leading to alterations in internal wall
positions and other alterations to design to accommodate new occupiers. Similar in
residential developments – as this proceeds (typically over 2-3 years) demand for different
types of accommodation may change – e.f. less demand for 2 bed flats and more for 3 bed.
This will lead to change in design and costs – but the contractor is already on site. Therefore
need cost control measures to ensure that a fair price is agreed to accommodate design
alterations.
Interim valuation
When a surveyor says a contractor will say that he says he’s done 6 windows, Jason says 6 windows
checks, that times labour, that’s 7k that will trigger a certificate for payment, that will tap point other
prev applied for purchase order – big pot of money he can dip into that every so often for materials
and wages
In my experience (e.g. our house extension) the responsibility for the interim valuation was
one of the architect’s jobs – they check that (i) work has been completed as per agreed stage
(ii) value claimed is consistent with the contract costs (iii) works undertaken meet contract
standards – i.e. are the doors hung straight, do they have appropriate quality hinges etc.
A program of works
Dudes worked 16 weeks, Jason gives them prelims for 16 weeks for site costa etc if project costs 24s
week then they don’t have that budget
If going badly managed, then the program of works will say what the contractor is behind on
Programme of works is very important for ensuring that different stages of works fit in. For
example: no point ordering (and paying for) wall cladding units to arrive on site before the
steel structure is constructed and the steel before the foundations are completed. If this is not
managed then (i) important materials are left of site (often there is no room for them to be
stores and they deteriorate if they are not protected from the weather). (ii) it also leads to a
loss of money for the client – spending £x million before you need to has a financial cost (e.g.
if money is borrowed at the interest rate etc).
The programme of works allows on to manage the building process so that the right goods
and trades (i.e. no good have electricians works when the shells of the buildings are not
complete) are on site at the right time. The classic tool for this is the GANTT chart which
allows the programming of works and shows the order in which tasks should be undertaken
and materials delivered to site.
The other key control role of the GANTT chart is it allows monitoring of the overall
development project – in the case above green is used to show what has been completed
and blue is what is outstanding.
Always holds back 5% - contingencies??
If he pays 10k hell keep 5% for mistakes, if achieved in time then they get that as a bonus
Not so much a bonus – they are actually due that money as part of the contract. However the
main reason is to act as an incentive that they actually complete the job! For example if a
contractor gets 75% of the way through building a house and gets paid 75% there is no
incentive for them to complete the job – especially f a more lucrative contract comes along.
For the developer or house owner you still cannot use a 75% complete house – it has limited
value so t is v important to tie the contractor into the completion of the project.
A second reason is that the contractor may go bust. In that situation although oanother
contractor may be brought in to complete the job it will cost more to get them up to speed or
correct the mistakes and damage caused by lack of progress with the first contractor. The
retention can help with this – a kind of insurance policy
2.5.2 client/employers QS post contract cost control
2.5.3 contractors QS post contract cost control
Can be interpreted from all three different perspectives
Ability to interpret information arising from site activities and contractual decisions to monitor and
control expenditure on construction work
RIBA plan of work
ACTIVITY: Adaption Approval - deducting unapproved costs from contractor for the client of a house
needing disabled access adaptions, also producing a letter to be sent to the client (had to be revised
as I hadn't deducted the appropriate expenditure) w Sean
ACTIVITY: Researching cost control principles - reading slides on building economics; RIBA;
procurement overview; cost planning; ISURV; and northern method
ACTIVITY: Northern method construction "take-off" sheet maths - very difficult
ACTIVITY: Discussing adaption approval payments. Looking at what hap pens if invoices re incorrect;
what works are deducted from the grants the council allows; how to write up funding/payment/costing
letters; direct to contractor funding vs through client and why this means different amounts of work for
the council; how to work out what the fees are people must pay
W Sean
Lesley kitchen 2 bailie Terrance dimension paper measurements
Cost spec Lambs Court

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HAM heavily based on price, new one is all kind of based on prices and contractor and it has more

points if its bigger????

Effect of procurement and tendering routes

2.3 Cost planning

2.3.1 sources of cost data

Done with Lesley

2.3.2 cost forecasting

Costing before contracts are handed out

 BICS Cost of Measurement tool. Online version on RICS website

Quantity Surveyors – employed to provide costs for projects.

2.4.1 measurement principles

Arithmetical proficiency in dimension calculation

Ability to set out measurement calculations following professional conventions

Mathematical spreadsheet skills applied to cost planning and control

2.5.1 objectives of post contract cost control

Upkeep and function cost?

Understanding of post contract cost monitor and control methods

Always holds back 5% - contingencies??

2.5.2 client/employers QS post contract cost control

2.5.3 contractors QS post contract cost control

Can be interpreted from all three different perspectives

RIBA plan of work

ACTIVITY: Northern method construction "take-off" sheet maths - very difficult

Lesley kitchen 2 bailie Terrance dimension paper measurements

Cost spec Lambs Court

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