Quantity Surveying & Costing (Lab) (CE-505) - Unit 4 Short Notes

4.1 Advanced Measurement & Pricing for Complex Elements

4.1.1 Measurement of Complex Building Components

• Curtain Walling & Façades: Measured in m² of overall wall area. Includes glazing, framing, fixings, and weatherproofing. Separate items for special glass (e.g., double/triple, low-E, laminated) and bespoke panels.

• Specialized Roofing:

  • Green Roofs: Measured in m² of planted area. Layers include waterproofing, root barrier, drainage, filter fabric, growing medium, and plants.

  • Tensile Fabric: Measured in m² of fabric area. Includes membrane, cables, masts, foundations, and hardware.

• MEP Services (Mechanical, Electrical, Plumbing):

  • Ductwork: Measured in m² of surface area (for fabrication) or m of length (for installation). Classified by size, material (GI, aluminum), and insulation.

  • Piping: Measured in m of length. Includes pipes, fittings, valves, supports, insulation, and testing.

  • Wiring: Measured in m of length for circuits. Includes conduits, cables, boxes, and devices (switches, sockets).

  • Equipment: Measured as "item" (e.g., AHU, pump, panel). Includes supply, installation, testing, and commissioning.

• Internal Fit-out & Partitions: Measured in m² for partitions (by type: stud, glass, solid). Includes all components: framing, panels, doors, finishes, and skirting.

4.1.2 Advanced Pricing Strategies

• Bespoke/Custom Elements: Priced via detailed unit rate analysis. Requires breakdown of:

  • Labour: Hours × rate (skilled/unskilled).

  • Plant: Hire cost + operator.

  • Materials: Net cost + wastage + delivery.

  • Overheads & Profit: Applied as % of direct costs.

• Provisional Sums & Prime Cost Items:

  • Provisional Sum: Estimated cost for defined scope of work not fully detailed at tender stage. Tenderers add % for overheads/profit.

  • Prime Cost (PC) Sum: Estimated cost for supply only of specific items (e.g., sanitary ware, kitchen units). Tenderer adds for fixing, wastage, and profit.

• Dayworks Rates: Used for unforeseen work where measurement is impractical. Rate = (Labour cost + Plant cost + Materials cost) × (1 + Overheads % + Profit %).

  [!TIP] Exam Focus: Be prepared to calculate a dayworks rate from given labour, plant, and material costs, and to distinguish when provisional sums vs. dayworks are appropriate.

4.2 Cost Planning, Control, and Value Management

4.2.1 Elemental Cost Planning & Cost Models

• Elemental Cost Plan: Breaks total project cost into standard functional elements (e.g., substructure, superstructure, finishes, services). Format often follows BCIS (Building Cost Information Service) elemental classification.

• Cost Modeling: Creating a mathematical relationship between cost and key project variables (e.g., cost/m², cost/bedroom). Used for early-stage budgeting and benchmarking against similar buildings.

• Benchmarking: Comparing project cost data ( elemental rates, cost/m²) against industry averages (from BCIS, RICS, or internal databases) to assess reasonableness.

4.2.2 Cost Control & Variance Analysis

• Monitoring: Regular comparison of actual cost (from invoices, valuations) against budgeted cost (cost plan/estimate).

• Forecasting Final Account:

  • Estimate at Completion (EAC) = Actual Cost to Date + Estimated Cost to Complete.

  • S-Curve Analysis: Graph plotting cumulative cost (or value) against time. Shows project spend profile and helps identify deviations from planned cash flow.

• Variance Analysis (CRITICAL FORMULAS):

  • Cost Variance (CV): CV = Earned Value (EV) - Actual Cost (AC)

    • CV > 0: Under budget (favourable)

    • CV < 0: Over budget (unfavourable)

  • Schedule Variance (SV): SV = Earned Value (EV) - Planned Value (PV)

    • SV > 0: Ahead of schedule

    • SV < 0: Behind schedule

  • Earned Value (EV): Budgeted cost for work actually performed.

  • Planned Value (PV): Budgeted cost for work planned to be completed by a date.

  • Actual Cost (AC): Actual cost incurred for work performed.

4.2.3 Value Management (VM) vs. Value Engineering (VE)

[!TIP] Exam Focus: Know the difference between VM (strategic, client-focused) and VE (tactical, function-focused). Be able to interpret CV and SV from a given scenario.

4.3 Life Cycle Costing (LCC) & Whole Life Costing (WLC)

4.3.1 Concepts & Importance

• Capital Cost (CC): Initial construction cost.

• Operational Cost (OC): Recurring costs during building life: energy, water, maintenance, cleaning, repairs, management.

• Life Cycle Cost (LCC): LCC = Capital Cost + ∑ (Present Value of all Future Operational Costs)

• Whole Life Cost (WLC): Broader than LCC; may include land acquisition, disposal costs, and non-monetary factors (e.g., environmental impact).

• Rationale: A higher capital cost option may have lower operational costs, leading to lower total LCC over the building's life.

4.3.2 LCC Analysis Procedure & Key Formulas

1. Identify Alternatives: Different designs, materials, or systems.

2. Estimate Costs: Capital cost and all relevant recurring/non-recurring operational costs for each alternative over the study period (e.g., 30 years).

3. Discount Future Costs to Present Value (PV): Using a discount rate (reflects time value of money, risk, inflation).

   • Present Value (PV) of a future cost: PV = Future Cost / (1 + i)^n

     • i = discount rate per period

     • n = number of periods

4. Sum all Present Values: LCC = CC + PV(OC1) + PV(OC2) + ...

5. Compare LCCs: The alternative with the lowest LCC is the most economical over the study period.

6. Annual Equivalent Cost (AEC): Converts LCC into an equal annual cost for easier comparison.

   AEC = LCC × [ i(1+i)^n / ((1+i)^n - 1) ]

   Where i = discount rate, n = study period in years.

[!TIP] Exam Focus: Be proficient in numerical problems. Given cash flows and a discount rate, calculate PV of each cost, sum to get LCC, and/or convert to AEC. Always state your study period and discount rate assumption.

4.4 Risk, Contingency, and Inflation in Costing

4.4.1 Risk Identification & Analysis

• Sources: Design changes, ground conditions, labour/material shortages, weather, client changes, regulatory changes.

• Qualitative Analysis: Risk matrix (Probability × Impact) to rank risks as High/Medium/Low.

• Quantitative Analysis:

  • Expected Monetary Value (EMV): EMV = Probability of Risk Occurrence × Financial Impact if it Occurs

  • Contingency Calculation (Simplified): Sum of EMVs for all identified risks.

4.4.2 Contingency Allowances

• Design Contingency (Estimating Contingency): Included in the base estimate (typically 5-10%) to cover incomplete design and pricing inaccuracies.

• Project Contingency (Management Reserve): Separate sum for unforeseen risks not in the base estimate. Managed by the client/project manager.

• Calculation Methods:

  1. Percentage of Cost: Simple, but arbitrary.

  2. Risk-Based (EMV Sum): More defensible. Sum of EMVs from risk register.

  3. Monte Carlo Simulation: Computer-based, runs thousands of project cost scenarios using probability distributions for individual cost items to predict a probability distribution of total project cost.

4.4.3 Handling Inflation & Fluctuations

• Price Adjustment (Fluctuation) Clauses: Adjust the contract sum based on changes in published indices (e.g., Retail Price Index - RPI, Consumer Price Index - CPI, or specific material/labour indices).

• Formula (Common Format): Adjustment = (Current Index - Base Index) / Base Index × (Proportion of Contract Sum)

  • Proportion is the % of the contract sum deemed to be subject to fluctuation (e.g., 20% for labour, 30% for materials).

• Purpose: Protects both client and contractor from unforeseen inflation during the contract period.

[!TIP] Exam Focus: Calculate EMV for given risks. Distinguish between design and project contingency. Apply a simple price adjustment formula to a contract sum.

4.5 Sustainability, Green Building, and Cost Implications

4.5.1 Costing for Sustainable Design

• Initial Cost Premium: Extra capital cost for sustainable features (e.g., high-performance glazing, solar panels, rainwater harvesting, sustainable materials).

• Long-Term Payback: Lower operational costs (energy, water, maintenance) over the building's life. Justified via LCC analysis.

• Certification Costs (LEED, BREEAM, GRIHA): Include fees for assessors, documentation, and potential premium for certified materials/products.

• Measurement & Pricing: Must identify and price specific sustainable items separately (e.g., recycled content insulation, low-VOC paints, photovoltaic systems).

4.5.2 Life Cycle Assessment (LCA) & Cost

• LCA: Quantifies environmental impacts (carbon footprint, energy use, water use) over a product's or building's life.

• Linking to Cost: The goal is to find the optimal point where environmental benefit (reduced LCA impact) is achieved at an acceptable cost increase or results in operational cost savings.

• Cost-Benefit Evaluation: Compare options using a matrix of Capital Cost vs. Operational Cost Savings vs. Environmental Impact Reduction.

[!TIP] Exam Focus: You may be asked to evaluate a sustainable option. Use LCC to show if the operational savings justify the capital premium. Mention non-monetary benefits (e.g., ESG, occupant health).

4.6 Final Account Preparation & Dispute Resolution

4.6.1 The Final Account Process

1. Compilation: Quantity Surveyor (for contractor) or Contract Administrator gathers all agreed variations, provisional sum finalizations, prime cost item adjustments, and retention money details.

2. Reconciliation: Compare final measured/valued work against the contract sum and all variation orders.

3. Settlement: Negotiate and agree the final sum with the client/engineer. Prepare the Final Account Statement showing:

   • Original Contract Sum

   • +/- Agreed Variations

   • +/- Adjustments to Provisional/PC Sums

   • +/- Retention Money Released

   • Final Certified Sum

4. Documentation: All supporting documents (variation registers, measurement sheets, agreements) are filed.

4.6.2 Claims and Disputes

• Types of Claims:

  • Extension of Time (EOT): Claim for additional time due to delays (client risk events).

  • Loss and Expense: Claim for financial loss (not just time) due to client-caused delays or disruptions.

• Substantiation: Claim must be supported by:

  • Cause: Link to a client risk event (e.g., variation, late instruction).

  • Effect: Proof of delay (programme analysis) or financial loss (cost records).

  • Quantum: Detailed calculation of costs (labour, plant, material, overheads) or extension period.

• Dispute Resolution (Hierarchy):

  1. Negotiation: Direct discussion between parties.

  2. Adjudication: Fast, interim binding decision (common in UK/Commonwealth contracts).

  3. Arbitration: Private, final and binding (like court but private).

  4. Litigation: Public court process, final and binding.

[!TIP] Exam Focus: Scenario-based questions. Given a delay event, identify if it's a client risk, and outline the steps to substantiate an EOT and/or loss & expense claim. Know the difference between EOT (time) and loss & expense (money).

4.7 Digital Tools & Software Applications in Costing (Lab Core)

4.7.1 Cost Database Management

• Sources: BCIS (UK), Spons (UK), RSMeans (USA), RICS data, or in-house historical data.

• Management: Updating for location factors (e.g., city vs. rural), time adjustments (inflation indices), and project-specific adjustments (size, complexity).

• Application: Provides benchmark elemental rates (e.g., £/m² for superstructure) for early cost planning and checking tender prices.

4.7.2 Building Information Modeling (BIM) for Costing (5D BIM)

• 5D BIM: Integration of 3D Model + Cost Data (4D is time/scheduling).

• Process:

  1. Model Authoring: Design in BIM software (e.g., Autodesk Revit).

  2. Model Validation: Check for clashes (using Navisworks) – clashes can cause cost implications (rework).

  3. Quantity Take-Off (QTO): Use BIM software or dedicated tools (CostX, Innovaya, Vico Office) to automatically extract quantities (e.g., length of wall, area of floor) from the model.

  4. Cost Linking: Link extracted quantities to a cost database/unit rates to generate an estimate.

• Advantages: Faster, more accurate QTO; instant update of cost when model changes; better visualization of cost distribution.

4.7.3 Specialized Cost Estimation Software

• Functions:

  • Item Library/Database: Pre-built assemblies and unit rates.

  • Take-off Tools: On-screen measurement from PDFs/Drawings (e.g., Bluebeam Revu), or direct from BIM models.

  • Assembly Building: Group items into logical assemblies (e.g., "external wall - brick/block/insulation/plaster").

  • Reporting: Generate detailed estimates, summaries, and comparison reports.

• Common Software: WinEst (Sierra), CostX (Exactal/Trimble), Bluebeam (for take-off), Vico Office (BIM 5D).

• Lab Focus: Creating a complete estimate from given drawings using software: setting up a project, taking off quantities, applying rates, and producing a final report with elemental summaries.

[!TIP] LAB EXAM FOCUS: Be able to perform a basic quantity take-off in software like CostX or Bluebeam from a simple drawing. Understand the workflow: Open drawing -> calibrate -> measure (length, area, count) -> assign item from cost book -> generate report. Know the key advantage of BIM-based costing: model change automatically updates quantities and cost.