Construction Planning & Management (CE-503 (B)) - Unit 5 Short Notes

1.0 FUNDAMENTALS OF ESTIMATION & COSTING

1.1 Purpose and Importance of Estimation in Quantity Surveying

• Purpose: To determine the probable cost of a project before construction begins. It is the foundation for financial planning, budgeting, and securing funds.

• Importance:

  • Decision Making: Helps in deciding project feasibility, choosing alternatives, and finalizing designs.

  • Budget Control: Provides a benchmark for controlling expenditure during execution.

  • Tender & Contract: Forms the basis for inviting tenders and entering into contracts.

  • Resource Planning: Aids in planning for materials, labour, and equipment.

1.2 Principles of Units for Various Items of Work

Standard units ensure uniformity and comparability.

• Length: metre (m)

• Area: square metre (m²)

• Volume: cubic metre (m³)

• Number: each (no.), pairs, etc.

• Weight: kilogram (kg), tonne (t)

• Length for Linear Items: metre (m) – e.g., piping, wiring.

• Area for Surface Items: m² – e.g., plastering, painting, flooring.

• Volume for Volumetric Items: m³ – e.g., earthwork, concrete, brickwork.

• Conversion: 1 cum = 1000 litres; 1 sqm = 10.76 sq ft; 1 cum = 35.315 cu ft.

1.3 Types of Estimates

1.4 Difference Between

[!TIP] Exam Focus: Distinguishing Revised vs. Supplementary is a very high-frequency question. Revised is for changes in original scope, Supplementary is for additional work.

2.0 PREPARATION OF ESTIMATES

2.1 Data Required for Preparation of Detailed Estimate

• Detailed working drawings (plan, elevation, sections).

• Specifications for all items of work (material quality, workmanship).

• Standard Schedule of Rates (SSR/CSOR) for rates.

• Information on site conditions, accessibility, water, power.

• Information on local availability of materials and labour rates.

2.2 Procedure for Preparation of Detailed Estimate (Step-by-Step)

1. Study Drawings & Specs: Understand the project fully.

2. Take-off Quantities: Measure items from drawings using standard methods (e.g., long wall-short wall).

3. Abstract Sheet Preparation: Enter item-wise quantities in a tabular form.

4. Rate Analysis: Determine unit rates for each item (from schedule or own analysis).

5. Calculate Amount: Multiply quantity by rate for each item.

6. Add Ancillary Costs: Include water supply, electrification, contingencies, etc. as % of structured cost.

7. Add Contractor's Profit & Taxes.

8. Prepare Summary: Total all amounts to get the project cost.

2.3 Factors to be Considered During Preparation

• Accuracy of Measurements: Avoid errors in dimensions.

• Specification Adherence: Rates must match specified material/grade.

• Wastage & Overheads: Include in rates (not separately in estimate).

• Site Conditions: Difficult terrain may increase cost.

• Phasing & Logistics: Storage, access, sequencing.

• Legal & Statutory Requirements: Bylaws, permits.

2.4 Preparation of Approximate/Rough Estimate

Example: Plinth Area Method

Given: Plinth Area = 500 m²/floor, No. of storeys = G+2 (3 floors), Plinth Area Rate = Rs. 3500/m².

Total Plinth Area = 500 m² × 3 = 1500 m².

Structured Cost = 1500 m² × Rs. 3500/m² = Rs. 52,50,000.

Example: Cubic Content Method (from past paper)

Given: Plinth Area = 500 m²/floor, Height/storey = 3.5 m, No. of storeys = G+2 (3 floors), Cubic Rate = Rs. 1000/m³.

Total Cubic Content = Plinth Area × Total Height = 500 m² × (3.5 m × 3) = 500 × 10.5 = 5250 m³.

Structured Cost = 5250 m³ × Rs. 1000/m³ = Rs. 52,50,000.

Inclusion of Ancillary Costs (as % of Structured Cost):

• Water Supply & Sanitary: 8%

• Electrification: 6%

• Fluctuation of Rates: 5%

• Contractor's Profit: 10%

• Petty Supervision & Contingencies: 3% Total Ancillary % = 32% Total Project Cost = Structured Cost × (1 + 0.32) = Rs. 52,50,000 × 1.32 = Rs. 69,30,000.

2.5 Bill of Quantities (BOQ) and Abstract Sheet

• BOQ: A list of all items of work (with descriptions, units, quantities, rates) required for construction. It forms the tender document.

• Abstract Sheet: A summary sheet derived from the detailed measurement book. It groups similar items, shows total quantities, unit rates, and total amounts. It is the financial heart of the detailed estimate.

[!TIP] Exam Focus: Be prepared to prepare a rough estimate using Plinth Area or Cubic Content method and add ancillary costs – a repeated numerical.

3.0 QUANTITY TAKE-OFF METHODS & TECHNIQUES

3.1 For Buildings: Long Wall and Short Wall Method

• Theory: For a room/building with parallel walls, the long wall length decreases, and short wall length increases as we go from foundation to superstructure.

• Formulas:

  • Long Wall Length (at a level) = (Centre to Centre length of room) + (½ × Thickness of wall on both sides)

  • Short Wall Length (at a level) = (Centre to Centre length of room) – (½ × Thickness of wall on both sides)

• Procedure:

  1. Find centre line lengths from plan.

  2. Calculate long/short wall lengths for each level (foundation, plinth, superstructure).

  3. Multiply by respective breadth (thickness) and height to get volume.

• Numerical Example (Simplified):

  Room size (c/c): 5m × 4m, Wall thickness: 0.3m.

  • Foundation (1st footing): Long wall = 5 + 0.3 = 5.3m; Short wall = 4 - 0.3 = 3.7m.

  • Plinth (above footing): Long wall = 5 + 0.15 = 5.15m; Short wall = 4 - 0.15 = 3.85m.

  • Superstructure: Long wall = 5.15m; Short wall = 3.85m.

  • Volume of brickwork (plinth level):

    Long walls: 2 × 5.15m × 0.3m × Plinth Height

    Short walls: 2 × 3.85m × 0.3m × Plinth Height

3.1.2 Centre Line Method (Brief)

• Total centre line length of all walls is multiplied by breadth and height.

• Suitable for: Rectangular buildings without cross walls.

• Adjustment: For junctions of cross walls, subtract ½ breadth for each junction.

3.1.3 Deduction Rules in Masonry and Plastering

• For Openings (Doors, Windows, Vents):

  • Masonry: Full deduction of volume of opening.

  • Plastering/Painting: Deduct only once for area of opening (no deduction for sides of opening).

• For Lintels/Beams: Deduct volume of lintel/beam from masonry above it.

• For Pilasters/Buttresses: Add extra length/area as they are projections.

• For R.C.C. Work: Deduct full volume of R.C.C. members from masonry.

3.2 For Earthwork (Roads, Embankments)

3.2.1 Mid-Sectional Area Method

• Volume = Area of mid-section × Distance between sections.

• Area of mid-section (Aₘ) = (B + md) × d, where B = formation width, m = side slope (horizontal:vertical), d = mean depth.

• Best for: Uniform cross-section over short lengths.

3.2.2 Mean Sectional Area Method

• Volume = \frac{(A₁ + A₂)}{2} × L, where A₁, A₂ = cross-sectional areas at two chainages, L = distance between them.

• More accurate for varying ground levels.

3.2.3 Calculation of Volume (Trapezoidal/Pyramidoidal Formula)

• Trapezoidal Formula (for prismoidal shape):

$$V = \frac{L}{6} \left( A_1 + 4A_m + A_2 \right)$$

where Aₘ = area of mid-section.

• Pyramidoidal Formula (for wedge/triangular shape):

$$V = \frac{L}{6} \left( A_1 + A_2 \right)$$

• General Rule: Use Prismoidal Formula for accuracy when area changes linearly.

[!TIP] Exam Focus: Earthwork volume calculation using Mean Sectional Area or Prismoidal Formula is a guaranteed numerical. Always draw cross-sections, calculate areas correctly (including side slopes), then apply formula.

3.3 For Specific Construction Items

• 3.3.1 Earthwork in Excavation for Foundations: Measure net volume (length × breadth × depth) from drawing levels. Include offset for working space if needed.

• 3.3.2 Lime Concrete in Foundation: Volume = area of foundation bed × thickness.

• 3.3.3 Brickwork: Calculate volume separately for foundation, plinth, superstructure. Use long wall-short wall method. Note mortar ratio (1:4, 1:6) affects rate, not quantity.

• 3.3.4 Damp Proof Course (DPC): Measured in square metres (m²). Deduct openings. Thickness (usually 2.5 cm) is considered in rate analysis, not quantity.

• 3.3.5 Plastering: Measured in m². Deduct openings (doors, windows) once. No deduction for reveals/jambs. Ceiling plastering measured separately.

3.4 Material Statement Preparation

3.4.1 For R.C.C. Work (M20 Grade 1:2:4)

• Step 1: Total volume of concrete (say, 25 m³).

• Step 2: Total dry volume of ingredients = 25 m³ × 1.54 (wastage factor) = 38.5 m³.

• Step 3: Sum of ratio = 1+2+4 = 7.

• Step 4: Quantity of Cement = \frac{1}{7} × 38.5 = 5.5 m³.

  • No. of cement bags = \frac{5.5 × 1440}{50} = 158.4 bags (approx 159 bags).

• Step 5: Quantity of Sand = \frac{2}{7} × 38.5 = 11 m³.

• Step 6: Quantity of Aggregate = \frac{4}{7} × 38.5 = 22 m³.

• Material Statement Table:

  | Material | Ratio | Volume (m³) | Bags/Units | | :--- | :--- | :--- | :--- | | Cement | 1 | 5.5 | 159 bags | | Sand | 2 | 11.0 | - | | Aggregate | 4 | 22.0 | - |

3.4.2 General Principles: Identify total volume of concrete/mortar, apply mix ratio, convert to weight/numbers using densities (Cement=1440 kg/m³, 1 bag=50 kg).

[!TIP] Exam Focus: Material statement for RCC (e.g., M20 1:2:4) is a very common 7-mark question. Remember the 1.54 factor for dry volume and conversion to bags.

4.0 RATE ANALYSIS & COST COMPONENTS

4.1 Definition and Objective of Rate Analysis

• Definition: The process of determining the rate per unit of an item of work by breaking down its cost components.

• Objective: To arrive at a realistic, economic, and fair unit rate for billing and payment. It helps in cost control and preparing detailed estimates.

4.2 Factors Affecting Rate Analysis

4.3 Preparation of Rate Analysis for a Specific Item (e.g., Lime Concrete 1:2:6)

1. Material Quantities: For 1 m³ of lime concrete (1:2:6).

   • Dry volume = 1 m³ × 1.54 = 1.54 m³.

   • Lime = \frac{1}{1+2+6} × 1.54 = 0.154 m³ (or bags if bagged).

   • Surkhi/Brick Aggregate = \frac{2}{9} × 1.54 = 0.342 m³.

   • Brick Ballast 40mm = \frac{6}{9} × 1.54 = 1.027 m³.

2. Cost of Materials: Calculate cost for each material at site.

3. Cost of Labour: Mason, helper, etc. for 1 m³.

4. Cost of Equipment: Mixer, compactor, etc.

5. Sum of (2+3+4) = Direct Cost.

6. Add Overhead Charges (e.g., 5% of Direct Cost).

7. Add Contractor's Profit (e.g., 10% of (Direct Cost + Overhead)).

8. Total Rate per m³ = Direct Cost + Overhead + Profit.

4.4 Concept of Task Work (Definition & Factors)

• Definition: The amount of work (output) a skilled worker can complete in a standard day (8 hours) under normal conditions.

• Factors Affecting Task Work:

  • Skill and efficiency of labour.

  • Type and quality of materials.

  • Type of equipment/tools used.

  • Work environment (weather, site conditions).

  • Supervision and method of work.

  • Specifications and finish required.

4.5 Cost Percentages in Building Construction (Typical Distribution)

[!TIP] Exam Focus: Cost percentages for key stages (structure, WS&S, electrification) are frequently asked. Remember structure is the major chunk (~65%).

5.0 VALUATION PRINCIPLES & METHODS

5.1 Purpose and Functions of Valuation / Role of a Valuer

• Purpose: To determine the market value or worth of a property at a given time.

• Functions of Valuer: Inspect property, collect data, apply valuation methods, prepare report, give expert evidence.

• Uses: Sale/purchase, mortgage, insurance, taxation, rent fixation, dispute resolution, accounting (depreciation).

5.2 Key Concepts

5.3 Methods of Valuation

1. Direct Comparison Method (Sales Comparison): Compare with recent sales of similar properties. Adjust for differences. Most common for residential plots.

2. Cost Method (Replacement/Reproduction):

   • Value = Present Cost of Construction (Replacement Cost) – Depreciation + Land Value.

   • Used for new/specialized buildings, insurance.

3. Income Capitalization Method:

   • Value = \frac{Net Annual Income}{Capitalization Rate (Yield)}.

   • Yield (Y) = \frac{Net Income}{Value} × 100%.

   • Years’ Purchase (Y.P.) = \frac{1}{Y} (see 5.5).

5.4 Sinking Fund

• Definition: A fund accumulated periodically (annually) to accumulate a lump sum equal to the original cost of the asset at the end of its useful life, for replacement.

• Importance: Ensures funds are available for future replacement without sudden financial burden.

• Determination:

  • Sinking Fund Coefficient (s):

$$s = \frac{i}{(1+i)^n - 1}$$

    where `i` = rate of interest (decimal), `n` = useful life (years).

*   **Annual Sinking Fund (A.S.F.)** = Original Cost × `s`.

*   **Example:** For a building costing Rs. 10,00,000, life 50 years, interest 5%:

$$s = \frac{0.05}{(1.05)^{50} - 1} = 0.00072$$

    A.S.F. = 10,00,000 × 0.00072 = Rs. 720/year.

5.5 Years’ Purchase (Y.P.)

• Concept: The present worth of a property that yields a net income of Re. 1 per year indefinitely, considering interest and sinking fund for replacement.

• Calculation (Considering Interest i and Sinking Fund s):

$$Y.P. = \frac{1}{i + s}$$

*   `i` = rate of interest on capital (e.g., 7% = 0.07).

*   `s` = sinking fund coefficient for asset life (from 5.4).

• Numerical (from past paper):

  • Future life n = 15 years, Interest i = 7% (0.07), Sinking Fund rate = 4% (0.04).

  • First, find s for 15 years at 4%:

$$s = \frac{0.04}{(1.04)^{15} - 1} = \frac{0.04}{1.8009 - 1} = \frac{0.04}{0.8009} = 0.0499$$

*   Then, 

$$Y.P. = \frac{1}{0.07 + 0.0499} = \frac{1}{0.1199} = 8.34$$

*   \boxed{Y.P. = 8.34}

5.6 Dual Rate of Interest (Concept & Application)

• Concept: In valuation of old properties, two different interest rates are considered:

  1. Higher rate (i) on the capital invested (for return on investment).

  2. Lower rate (s) for the sinking fund (for replacement).

• Application: Used in Years’ Purchase formula: Y.P. = 1/(i + s). Reflects that investor expects higher return on capital but sets aside a smaller sinking fund for an old asset with shorter remaining life.

5.7 Standard Rent Fixation of a Building (Methodology)

1. Find Present Value of Building (V_b): Using Cost Method (Replacement Cost – Depreciation).

2. Find Land Value (V_l): by comparison.

3. Total Property Value (V) = V_b + V_l.

4. Determine Years’ Purchase (Y.P.) based on:

   • Interest rate on capital (e.g., 6-8%).

   • Sinking fund rate for building life.

   • (Land has no sinking fund, so Y.P. for land = 1/i).

5. Annual Net Income Required = V × Y.P.

6. Gross Annual Rent = Net Income + Outgoings (taxes, repairs, insurance, management).

7. Standard Monthly Rent = Gross Annual Rent / 12.

[!TIP] Exam Focus: Years’ Purchase calculation with dual rates is a classic numerical. Memorize the formula Y.P. = 1/(i+s). Also, know the difference between scrap and salvage value.

6.0 ADMINISTRATIVE & CONTRACTUAL ASPECTS

6.1 Current Schedule of Rates (CSOR)

• Purpose & Importance: Standardized document issued by government/agencies (CPWD, PWD). Provides baseline rates for materials, labour, and equipment for estimating, billing, and contract agreements. Ensures uniformity and fairness.

• Components:

  • Material Rates: At source/despatch point + transportation to site.

  • Labour Rates: Basic wages + allowances + overheads.

  • Equipment Rates: Hire charges, operator, fuel.

  • Item Rates: Composite rates for common items (often derived from above).

• Use: Basis for preparing estimates, analyzing rates, and forming contract agreements. Revised periodically.

6.2 Work Charge Establishment (Definition & Components)

• Definition: Temporary, on-site facilities and staff required for project execution, whose cost is included in the project estimate.

• Components:

  • Site office, stores, staff quarters, labour camps.

  • Site water supply, electricity, sanitation.

  • Site vehicles, communication.

  • Field staff (engineer, supervisor, clerk).

  • Not included: Head office overheads (separate %).

6.3 Tender Notice – Essential Elements

• Name and address of employer/consultant.

• Brief description of work and location.

• Estimated cost/range.

• Time for completion.

• Earnest Money Deposit (EMD).

• Cost of tender documents.

• Eligibility criteria for contractors.

• Date, time, place of tender submission and opening.

• Security deposit details.

• Terms of payment.

6.4 Fluctuation of Rates in Contracts (Clauses & Mechanisms)

• Purpose: To protect contractor/client from sudden price changes in materials/labour during long-duration contracts.

• Mechanism (Price Variation Clause):

  • Base Date: Prices on date of tender submission are "base".

  • Indices: Use official price indices (e.g., Wholesale Price Index - WPI for materials, Consumer Price Index - CPI for labour).

  • Formula: Adjustable amount = (Current Index / Base Index – 1) × Base Cost × Weightage.

  • Weightage: Pre-determined % for materials, labour, fuel in the contract.

  • Ceiling: Often a maximum % (e.g., 10-15%) beyond which contractor bears risk.

7.0 SPECIALIZED ESTIMATION (APPLICATIONS)

7.1 Cost Estimates for Drainage and Electrification Works

• Methodology:

  1. Drainage: Estimate based on length of pipes (sewers, stormwater) + number of manholes/inspection chambers + earthwork for trenches. Rates per metre or per number.

  2. Electrification: Estimate based on length of conduiting/wiring (point-to-point) + number of points (switches, sockets, fixtures) + sub-distribution boards + main panel. Often uses percentage method (5-8% of building cost) for preliminary estimates.

• Percentage Method: For quick preliminary estimates, take a % (e.g., 6% for electrification) of the plinth area rate or structured cost.

7.2 Estimation for Culvert Construction (Different Methods & Techniques – Brief)

• Methods:

  • Detailed Item-wise Estimate: For major culverts (box, pipe, arch). Quantities for excavation, foundation, substructure (abutments, piers), superstructure (deck, wearing coat).

  • Approximate Estimate: For minor pipe culverts, use per metre length or per culvert rates based on standard designs.

  • Unit Rate Method: Rate per square metre of deck area or per cubic metre of concrete.

• Techniques: Similar to building estimates but focus on hydraulic structures. Key items: earthwork, concrete, reinforcement, masonry, scour protection.

7.3 Valuation of Special Structures (e.g., Marine/Port Structures – Contextual Link)

• Challenges: Limited comparable sales, specialized design, high capital cost, long life, income from dues (berthing, cargo).

• Approach:

  • Cost Method: Dominant. Calculate Replacement Cost New (RCN) of breakwaters, docks, jetties. Apply physical and functional depreciation (difficult, often low as structures are durable).

  • Income Method: If operational, capitalize net income from port operations (berth fees, cargo handling). Requires accurate financial data.

  • Direct Comparison: Rare, only if similar port sold recently.

8.0 SYNTHESIS & APPLICATION

8.1 Inter-relationship between Estimate, Rate Analysis, and Valuation

• Estimate uses Rate Analysis to determine item rates → gives Project Cost.

• Valuation (for existing property) may use Cost Method, which requires current replacement cost → derived from updated Rate Analysis.

• Thus, Rate Analysis is the common link: it feeds into both estimating new work and valuing existing assets.

8.2 Common Errors in Estimation and Their Avoidance

8.3 Role of Quantity Surveyor in Project Planning & Cost Management

• Pre-Construction: Prepare estimates, BOQ, cost plans, value engineering, tender documentation.

• During Construction: Cost control, variation assessment, progress billing, claim evaluation, cost reporting.

• Post-Construction: Final account settlement, depreciation studies, asset valuation.

• Overall: Cost consultant ensuring project delivered within budget, maximizing value for money.

[!TIP] Final Exam Strategy: For any 7-mark question, structure your answer: Definition → Explanation/Procedure → Example (if numerical) → Key Points. For differences, use a table. Always highlight standard units and common percentages (ancillary costs, overheads). Practice long wall-short wall and earthwork volume numericals thoroughly.