cost planning - project kaleidoscope (pkal)pkal.org/documents/drury-cpmi.pdf · monitor and control...
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Cost Planning
Project KaleidoscopeDrury University 2003
Larry Gleason CPMI
Planning &PreliminaryBudgeting
Design &Construction
PostConstruction
Pre-Design &Programming
Cost Management Cycle
Planning Pre-Design Design Construction
Timing of Decisions
Balancing Interests
PROGRAMPROGRAMPROGRAMPROGRAMADVOCATESADVOCATESADVOCATESADVOCATES
BUDGETBUDGETBUDGETBUDGETADVOCATESADVOCATESADVOCATESADVOCATES
DESIGNDESIGNDESIGNDESIGNADVOCATESADVOCATESADVOCATESADVOCATES
SCUP Survey Results
Key Issues/Concernsn Lack of reliable datan Lack of standardized formats for budget estimatesn Confusion regarding description, identification
and calculation of hard and soft costsn Lack of understanding as to how to effectively
monitor and control budgets
Benefits of Cost Planning
nGreater satisfaction with end resultsnBetter value for moneynImproved building quality and performancenBudget and value accountabilitynImproved relationships between all project
participantsnDesign problems identified and solved earliernEarly identification of high-cost elements
Factors in Successful Cost PlanningnConfirm that all project team members are
speaking, and understand, a common language
nManage expectations. Acknowledge change is inevitable and establish contingencies and escalation in cost planning
Factors in Successful Cost PlanningnEstablish and document a solid base of
prioritized needsnStudy as many feasible site and building
alternatives as possiblenEstablish well defined, manageable project
schedulesnInsure the budget has the confidence and
acceptance of all project team members
The Tower of Babble
Reaching common ground for communicating cost data
nConfirm that all project team members are speaking, and understand, a common language
nFailure in cost management is often a failure in communication rather than a failure in application
The Tower of Babble
Reaching common ground for communicating cost data
n Life Cycle Cost v. Non-Building Cost v. Building Cost
n Estimating v. Cost Managementn Types and Levels of Estimatesn Project Budget Chart of Accountsn Contingencies and Escalation
Life Cycle Cost v. Non-Building Cost v. Building Cost
OperationMaintenance
ReplacementsSite Development Alterations Administration
Architectural Financing FinancingBuilding Systems Taxes Legal
SurveysNon-Building Costs Land Purchase
FeesStructural Building Costs Furniture & Equip.
Building Systems ContingenciesEtc .
MechanicalBuilding Systems Life Cycle Costs Non-Building Costs
ElectricalBuilding Systems
Building Costs
The Tower of Babble
Reaching common ground for communicating cost data
n Life Cycle Cost v. Non-Building Cost v. Building Cost
n Estimating v. Cost Managementn Types and Levels of Estimatesn Project Budget Chart of Accountsn Contingencies and Escalation
The Tower of Babble
Reaching common ground for communicating cost data
n Life Cycle Cost v. Non-Building Cost v. Building Cost
n Estimating v. Cost Managementn Types and Levels of Estimatesn Project Budget Chart of Accountsn Contingencies and Escalation
Types and Levels of Estimates
nOrder of Magnitude (“Ballpark”) EstimatesnCost Plan EstimatesnPreliminary EstimatesnInterim Detailed EstimatesnFinal Detailed Estimates
Types and Levels of Estimates
nOrder of Magnitude (“Ballpark”) Estimates– Based on Planning/Programming criteria.
Measurement of occupancy content or gross floor areas. Priced with unit or square foot costs based on historical data
– Expected level of accuracy in a range of ± 20 -25%
Types and Levels of Estimates
nCost Plan Estimates– Based on Planning/Programming criteria.
Measurement of shell/functional areas or the development of cost models. Priced with unit or square foot costs, based on historical data, in Elemental format
– Expected level of accuracy in a range of ± 15 -20%
Sources for cost data
n Cost information from within the institutionn Costs from similar institutionsn Independent cost information servicesn Price books and manualsn Newsletters and magazinesn Published indicesn Consultants, Contractors, Suppliers /
Manufacturers
The Tower of Babble
Reaching common ground for communicating cost data
n Life Cycle Cost v. Non-Building Cost v. Building Cost
n Estimating v. Cost Managementn Types and Levels of Estimatesn Project Budget Chart of Accountsn Contingencies and Escalation
Project Budget Chart of Accounts
n Land/Building Preparation (Non-Building Cost except as noted)
– Acquisition Cost– Land Surveys– Hazardous Materials Surveys– Geotechnical Investigations– Environmental Impact– Historic Preservation– Demolition (Building Cost)– Clearing and Grubbing (Building Cost)
Project Budget Chart of Accounts
n Administration (Non-Building Cost)– Appraisal Fees– Internal Staff Costs– Advertising– Printing– Legal Fees– Building Permits– Builders Risk Insurance– Finance Costs– Construction Contingency– Ground Breaking
Project Budget Chart of Accountsn Professional Consulting Services (Non-Building Cost except as
noted)– Architectural/Engineering Fees and Reimbursables– Preconstruction CM Fees and Reimbursables– Programming Fees– Special Inspections– Soil and Material Testing (Building Cost)
Project Budget Chart of Accountsn Construction (Building Cost)
– Sitework– Foundations– Floor System– Columns– Roof System– Exterior Wall– Exterior Glazing– Interior Wall– Doors– Specialties– Equipment– Conveying Systems
– Plumbing– Fire Protection– Heating, Ventilating & Air
Conditioning– Electrical– General Conditions, Overhead
and Profit– Management Fees– Design Contingency– Escalation
Project Budget Chart of Accounts
n Occupancy Costs (Non-Building Cost)– Movable Fixtures, Furnishings and
Equipment– Artwork– Relocation– Cabling not included in Electrical– Occupancy Permit– Open House/Dedication
The Tower of Babble
Reaching common ground for communicating cost data
n Life Cycle Cost v. Non-Building Cost v. Building Cost
n Estimating v. Cost Managementn Types and Levels of Estimatesn Project Budget Chart of Accountsn Contingencies and Escalation
Contingencies and Escalation
Sample Contingencies
1 8 %Design Contingency 1 3 %
8 % 3 %Construction Contingency
Design Contract Concept Schematic Development Documents Construction
Predesign: Charting the Course
nStudy as many feasible site and building alternatives as possible
nEstablish well defined, manageable project schedules
nEstablish and document a solid base of prioritized needs
nInsure the budget has the confidence and acceptance of all project team members
Predesign: Charting the Course
nToo high a budget will kill a project now -too low a budget will kill it later
Predesign: Charting the Course
nPredesign process and productnOperational planning in PredesignnArchitectural/Engineering ProgramnPlanning alternatives - Predesign or Design?nRisk factors: Schedule and timing, planning
without design, market factors
Predesign process and product
n Predesign is highly focused project planning intended to improve the outcome of design and construction
n Predesign follows strategic and operational planning by users and precedes design
n The result of predesign is a “Program” that also may include conceptual planning alternatives
n Predesign can typically be accomplished for 0.5% or less of the design and construction cost
Predesign process and product
A/E Program
nProblem seeking, not problem solvingnAn organized process identifying prioritized
space and quality needsnDifferent levels of detail depending on how
the information is to be usednThe foundation upon which concepts and
analysis are based
A/E Program
Steps in systematic facilities programmingn Orientationn Initial Data Collection and Analysis n Space Standardsn Building Design Criterian Preliminary Evaluation/Reconciliationn Adjacency Requirementsn Final Summaries and Documentation
Predesign: Charting the Course
nPredesign process and productnOperational planning in PredesignnArchitectural/Engineering ProgramnPlanning alternatives - Predesign or
Design?nRisk factors: Schedule and timing, planning
without design, market factors
Predesign: Charting the Course
nPredesign process and productnOperational planning in PredesignnArchitectural/Engineering ProgramnPlanning alternatives - Predesign or Design?nRisk factors: Schedule and timing, planning
without design, market factors
Planning &PreliminaryBudgeting
Design &Construction
PostConstruction
Pre-Design &Programming
Cost Management Cycle
Design & Construction: Staying the Course
nEstablish clear responsibilities among the owner, users and designers and require that adherence to program and budget be a team effort
nUse quality control of contract documents and management of change during construction
Design & Construction: Staying the Coursen Design within program boundariesn Cost control procedures and decisionsn Interim detailed estimatesn Cost checking and feedback - value managementn Quality control proceduresn Design schedule impact on cost managementn Construction delivery methodsn Construction economicsn Cost Management during Construction