MARINE RESEARCH FACILITY,

LEITH DOCKS, EDINBURGH

Part 2
Building Economics

DESIGN PROJECT 2018 - 19

D30YE
BSc Quantity Surveying
Matriculation Number: H00222539

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Table of content:

Construction Market Report…………………………………………………………………….3-10

Early Cost Advice………………………………………………………………………………………11-28

(1) Order of Cost Estimate………………………………………………………………………..11-18
(2) Elemental Cost Plan…………………………………………………………………………….19-28

Risk Allowance……………………………………………………………………………………….29-30

Life Cycle Cost Analysis……………………………………………………………………………31-36

LCC analysis calculations……………………………………………………………………………….35

References…………………………………………………………………………………………………….37

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1. Construction Market Report
1.1 Introduction
The study of the construction market contains a comprehensive analysis of various sources of
information, including official statistics (ONS -office for national statistics, government
reports) and open data (press releases of companies, manufacturers' websites and industry
unions, companies interviews).
Basic components of the construction market report include statistics in: construction and
assembly activities (housing market, commercial real estate market), market of building
materials, structures and products.
Factors that have been considered analyzing the UK construction market:
 The outlook of the UK economy, government policy and funding priorities of various
public projects from the budget;
 The investment climate, the level of the UK economy (GDP, CPIH, TPI);
 Construction sector output;
 Labour market and material cost.
The report is based on the Office for National Statistics, BCIS data of the Year 2018 and
forecast of UK main consultant agencies (Arcadis, GARDINER & THEOBALD, AECOM).

1.2 The aim

The aim of this report is to assess construction market and UK economy in general in order to
provide advice to the client (Heriot Watt University) on feasibility of construction of the
Marine Research Facility project .

1.3 The outlook of the UK economy

As construction industry has a complex defragmented structure and is closely connected
with other sectors of the UK economy : retail sector, housing, transportation, education and
healthcare facilities. The outlook on the UK whole economy for the past year is essential to
make a relatively precise forecast of the construction market nearest future and provide
advice on the client’s business case.
Key indicators 2018:
UK GDP increased by 1,6% and its size amounted to 2936 billion US dollars. UK population is
66.57 million people. GDP per capita at purchasing power parity was $ 44,177 (nominal).
Global competitiveness index 2017-2018 according to WEF (World Economic Forum).

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The United Kingdom (UK) (8th) falls one spot. This drop does not yet reflect the outcome of
the Brexit negotiations, which is likely to further undermine the country’s competitiveness.
Currently the country performs very well on technological readiness and the sophistication of
its business sector (4th and 7th overall). Its macroeconomic environment remains challenging
(68th) and could become an important constraint in the future as the timeline for a reduction
of the fiscal deficit is repeatedly pushed back.
Picture 1 - UK global competitiveness index Source: The Global Competitiveness Report 2017–
2018.
Government policy and funding priorities of various public projects from the budget.
• R&D (research and development)
• The development of innovation in Great Britain is one of the main priorities of
economic policy according to the plans of which the country should preserve and
strengthen its leading position in the field of advanced technology.
• Education sector
• More than 9% of world volume of scientific works is published in the UK , the
citation index of their authors exceeds 12%. Every year 29% of companies master
the release of new products, 19% introduce new ones. 66% technological
processes are involved in innovation activities.
Source: Office for National Statistics

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 • Housing
• The overall target for housing supply is to reach 300,000 a year.
UK government Help to Buy scheme, extended Stamp Duty Tax Relief with Land
Value Uplift System for developers will continue to drive housing sector forward.
Housing supply has increased by 1.1 million since 2010. Further investment from
the government budget into housing sector have been announced.
Source: HM Treasury, Budget 2018 Housing Report.

1.4 The investment climate

UK Gross Domestic Product (GDP)

Picture 2 - UK GDP. Source: Office for National Statistics, GDP chain volume measures (CVM).
19 December 2018 release date.
In spite uncertainty with Brexit and the most pessimistic forecast of 0.6% UK GDP continue to
grow and remained at the point of 3.6 % in the 3rd quarter of 2018, which is 1.4 % higher than
the Consumer Prices Index including owner occupiers’ housing costs (CPIH). Economic
forecast growth for the Year 2019 according to HM Treasury is falling from 1.6 % in 2018
down to 1.5%.
UK Consumer Prices Index including owner occupiers’ housing costs (CPIH)

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Picture 3 – UK CPIH. Source: Office for National Statistics, CPIH chain volume measures (CVM).
19 December 2018 release date.
CPIH for the 2018 was 2.2%. Inflation rate can easily eat up supply chain profit , which is
currently 2% of contractors revenue. This is why extra caution should be taken entering into
contract with the main contractors and assessing the risks and responsibilities. According to
Construction Products Association the CPIH forecast for 2019, 2020 will decrease down to 2
%.
All -in Tender Price Index (TPI)

Picture 4 - All -in Tender Price Index. Source : Arcadis UK construction market review 2018.

COMPARISON OF PUBLISHED FORECASTS FOR TENDER PRICE CHANGE

G&T UK AVER. BCIS UK AVER. G&T LONDON AECOM LONDON ARCADIS LONDON
1Q TO 1Q JAN 18 1Q TO 1Q 4Q17 Mid range 4Q17
% CHANGE
1,00
2018 4,70 1,00 2,20 1,00
1,00
2019 0,60 0,50 1,90 3,00
1,50
2020 4,20 1,50 2,90 4,00
2,00
2021 4,30 2,00 N/A 4,00
Table 1 - COMPARISON OF PUBLISHED FORECASTS FOR TENDER PRICE CHANGE. Source:
GARDINER & THEOBALD tender price report 2018.
Tender price index remained flat in the 2018 at the average of 1%. UK main consultant
agencies: Arcadis, GARDINER & THEOBALD, AECOM predict TPI growth due to increased input
prices on materials and labour salary increase. The situation with Brexit and Carillion’s
liquidation brings risks of uncertainty into UK buildings economics. The wealth of UK
construction sector depends on the Government ability to exit the European union remaining

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trading connections as 50 % of UK GDP accounts to European market. Also, currency
exchange rate considering Brexit ‘’Central Scenario’’ should remain remains close to $1.40
and €1.14 for £1.
Source: Arcadis, GARDINER & THEOBALD 2018 reports.

1.5 Construction sector output in the Great Britain

Picture 5 – UK construction sector output Source: Construction Output and Employment -

Office for National Statistics.
The three-month on three-month series for all work was up 2.1% for November 2018; this
was driven by all new work, which increased by 3.4%, but was offset slightly by a decline in all
repair and maintenance, which fell by 0.4%.
The increase in the all new work three-month on three-month series was driven primarily by
private new housing and infrastructure which increased by 4.9% and 6.5% respectively.
Source: ONS Construction output in Great Britain 2018 report.

Picture 6 - Difference in three-month on three-month seasonally adjusted, chained volume

measure from the main construction sectors. Source: - ONS.

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Figure 3 shows the difference in the levels of output from the different construction sectors
for September to November 2018, as compared with June to August 2018.
Construction output in the most recent three-month period was buoyed by September 2018’s
strong performance and increased by £514 million period-on-period. This was driven largely
by private housing new work, which grew by £365 million, and infrastructure, which grew by
£215 million. Significant growth was also seen in non-housing repair and maintenance, which
increased by £192 million in the three-month on three-month series.
Source: ONS Construction output in Great Britain 2018 report.

1.6 Labour market and construction building materials

Picture 7 – UK unemployment rate. Source: Office for National Statistics Unemployment rate.
The unemployment rate in the UK was lower compare to the previous year and currently stays
at the 4,1 % rate. This shows a good statistics for UK economy, however according to Arcadis
report the number of EU workers is falling and skills shortage is not improving for UK
construction sector. Arcadis forecast states that 3% per annum of qualified construction
workers will leave UK construction market and it may go worse with the post Brexit situation.
Labour rates for construction workers continue to grow increasing by 3,2 % for the current
year and be ahead of an average earnings rising.
Source: Arcadis, GARDINER & THEOBALD 2018 reports.

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Construction building materials
Price indices of construction materials 2010=100

Picture 8 - Price indices of construction materials 2010=100. Source: Department of

Business, Energy and Industrial Strategy.
The prices of construction materials show a short-term boost on the main materials: cement
and steel. From the outcome of Brexit depends the situation on the price of construction
materials. If UK remains in the EU trade zone then prices for main construction materials
should be on the same level and may slightly rise.
Source: Aecom costing steel work N 7 cost update report.

1.7 Risks associated with Marine Research Centre Facility project delivery in
the UK market in 2019
The main risks associated with liquidation of the UK second largest contractor - Carilion, the
situation will impact the levels of trust in the whole construction sector as a result project
stakeholders may increase tender prices for taking risks for design or land survey.
The currency exchange rate of Sterling Pound to Euro, American dollar depends on the Brexit
negotiation and purchasing power of 1 £ may decrease. This may result into additional
increase of input prices in the construction sector and bring tender prices up in the 2019-
2021.

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Labour market skills shortage can be crucial for Marine Research Centre facility and
contractor’s survey should be carried out prior tender process as the project requires unique
experience in the delivery of wave tanks for research purposes. Labour prices and material
cost expected to rise in 2019 this may bring delay I the Marine Research facility project
delivery due to time spent on renegotiation.

1.8 Chapter conclusion

External risks such as labour availability, input and commodity prices, currency exchange rate,
change in government policies all influence construction market dynamics and should be
considered in preparation of cost estimate plan for the Marine Research facility project. Early
engagement of the supply chain can reduce the risks of cost rise of the main materials and
increase certainty in the delivery of the construction project.
It is predicted by main consultant companies that tender prices and construction building
materials cost will raise during 2019-2021 period. Estimate price for construction of Marine
Research Centre Facility project would increase, so the contingency found should be
increased in order to mitigate the risks associated with project delivery. The yearly start in the
first quarter of 2019 is recommended to avoid further increase in the tender price and
possible project delays as a result of renegotiation.

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2. Early Cost Advice
2.1 Project details

Title :‘MARINE RESEARCH FACILITY’

Building type: Research Facility, Mixed Use.
Type of work: New Build
Client: Heriot Watt University
Location: Ocean Dr, Edinburgh EH6 6JJ.
Dates: Estimate Project Length Feb 2019 – March 2020 (15 months duration).

Project descriptions:
Outline brief:
 Hospitality services (café, exhibition and lecture spaces), canteen;
 PhD research & meeting rooms, academic offices, teaching and conference space,
mechanical rooms;
 Wet labs: Wave Tanks A and B;
 External carpark;
 Manage, monitor and control energy consumption effectively;
 Reduce the energy demand through efficient design and material selection;
 Access for public (incl. public transport) and access to the sea divers and boats;
 Project to include a public-facing element (e.g. cafe and exhibition/lecture space) to
be used for University outreach;
 Design must incorporate appropriate Infrastructure and landscaping – access for
public (incl. public transport) and access to the sea for divers, boats and bots;
 Design should represent Heriot-Watt values of conservation, innovation,
sustainability.

Site conditions:
 Slope
Site width - 76.04 m =249.5 ft , elevation difference 11ft-10ft; 1/249.5*100=0.4%
Site slope = 0.4 %.
 Access
Machinery and pedestrian access to the site through the controlled entranced located
on the main road (Ocean drive).

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  Topography

Picture 2.1 Topographic map of the proposed site; Source : The City of Edinburgh
Council.

 Site contours, area and perimeter

Picture 2.2 Site characteristics by contours/area/perimeter; Source: Google Earth

Pro.
Considerations and constraints:
 Environmental sustainability is the key within this scheme and teams are required to
achieve extremely high standards in terms of embodied and running energy
standards. The client is keen to deliver a clear message about the importance of
sustainability to the researchers and community members using or visiting the facility.
The building’s focus on Marine Research shines a particular light on microplastics,
waste, oceanic pollution and climate change. Project should incorporate novel and

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 innovative techniques to generate renewables on site, and to minimise water use and
sewerage. The overall package should deliver an ultra-low carbon solution.
 Social and economic sustainability is also important to the scheme. Client wants to
support future community growth. The local community, and tourists, should be able
to use the cafe, lecture and exhibition spaces without compromising research security.
 Multiple Approaches. The dockside location is strategic. Researchers and supporting
craft (autonomous and manned) will enter and exit the sea daily. Staff will commute
daily to work in the research labs. Members of the public will visit the exhibition space
and cafe. These three groups have differing requirements and associate security
considerations.
 Space Planning should consider above requirement to accommodate different groups
on site. Internal circulation will be different – large open space on the ground floor
level for public and corridors and halls on the upper floors.
 Specific site Geotechnical and topographical characteristics. This is a physically
complex site. Much of the land in this area is contaminated. Building on or near the
docks comes with significant challenges: structurally, geotechnically, and also with
reference to the high-saline content. (Source : Heriot Watt University collaboration
week project brief).

2.2 Preliminary cost advice.

Basis for cost estimates (assumptions):
Based on the RIBA stage one (Project brief and preparation) we assume that the project
requires 6000 square metres of area to provide the space for PhD research & meeting
rooms, academic offices, teaching and conference space, mechanical rooms, wet labs tanks
and hospitality services.
The project consists of two buildings: three story main building and one-story wet labs with
wave tanks for university research.
GIFA (gross internal floor area)main building =4000 m2
GIFA wet labs = 2000 m2
SA (site area) = 8,172.68 m2
According to NRM1 a functional area method (superficial method) for cost estimate
preparation is preferred. From the BCIS online service an average price per m 2 will be
obtained to form the basis for Marine Research Facility budget. The measurement for each
building (1. Main building and 2. Wet labs) will be taken separately as best practise by NRM1
rules. Later the calculation for both buildings will be combined top form the budget of the
project. This price will be adjusted to time, location and inflation rate in order to form more
accurate ‘rough estimate’.
Exclusions:
 VAT – will be excluded from the estimate cost plan, as this process is a complex
task and it is recommended in the NRM1 to exclude VAT assessment from
‘rough estimate’.

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Inclusions:
 Facility works cost estimate(soil treatment);
 building works estimate;
 main contractor’s preliminaries estimate;
 main contractor’s overheads and profit estimate;
 project and design team fees estimate;
 risk allowances estimate;
 inflation estimates.
Formula for cost estimates calculation using superficial method:
Subtotal = Facility works cost estimate + building works estimate (main + wet labs)+ main
contractor’s preliminaries estimate + main contractor’s overheads and profit estimate +
project and design team fees estimate + risk allowances estimate + risk allowances estimate.

Main building
The basis for estimate cost advice (ECA) was formed on the average price per m2 according to
the BCIS statistics for Lecture theatres category buildings, the results are rebased on time
(1Q2020) and location (Lothian:91; sample 177).

Picture 2.3 – rate per m2 analysis results. Source: BCIS, average prices analysis.
The decision to choose higher rate of 2100 £/m2 per gross internal floor area of the main
building was based on the project brief (aims and objectives, quality and sustainability aspects
of the project). External works included fees for landscaping, drainage services, profit and
main contractor preliminaries. Project/design team fees were considered 10% of the works
cost estimate, contingency sum of £250.000 were based on risks associated with project
delivery, 4.0% of tender inflation estimate was adjusted.

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Cost limit for the main building equals £10,900,000.

Wet labs
The basis for estimate cost advice (ECA) for second part of the project (wet labs) was formed
on the average price per m2 according to the BCIS statistics for Laboratories category
buildings, the results are rebased on time (1Q2020) and location (Lothian:91; sample 177).

Picture 2.4 – rate per m2 analysis results. Source: BCIS, average prices analysis.
The GIFA rate of £ 3500/m2 were formed based on the £/m2 study, considered complexity of
works, quality requirements and Mean/Highest rates recorded in the BCIS data base. As in
previous ECA external works included fees for landscaping, drainage services, profit and main
contractor preliminaries. Project/design team fees were considered 10% of the works cost
estimate, contingency sum of £250.000 were based on risks associated with project delivery,
4.0% of tender inflation estimate was adjusted.

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Cost limit for wet labs equals £9,440,000.

Chapter summary
Total estimate cost for the ‘MARINE RESEARCH FACILITY’ project £9,440,000 + £10,900,000
= £20,340,000.
Although this is an estimate figure if all aspects are taken into consideration BCIS can provide
quite accurate results. The overall difference between early cost advice and elemental
analysis were only nine percent. This accuracy is based on the BCIS submitted projects, which
can be rebased by time and location.

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2.3 Elemental Cost Plan

Elemental cost plan is prepared based on the concept design (RIBA stage 2) of the ‘MARINE
RESEARCH FACILITY’ project submitted by the ‘’EZArchitecture ltd’’. At this stage it is
assumed that design team prepared concept design of the project and main elements and
materials of the proposed design are known. Each building in the project will be analysed
separately according to the (Martin, 2012) section 2 ‘’Principles of Analysis’’

Concept design details:

Main building
Main Construction : Steel framed
Storeys: 3
Level of analysis: Elemental
Gross internal floor area =4271 m2
Storey height: =4m

Picture 2.5 - Concept design produced in Revit. Source: Project design part 1.

Accommodation and design features:

3 storey mixed research facility with laboratories for academic scientists and commercial
teams. Pile foundations Vibro compaction. RC suspended ground slab and stairs; composite
floors. Steel frame and intensive green roof. Block cavity external walls and curtain walling.
Double glazed aluminium windows; roller shutters. Block and metal stud partitions. Flush
doors. Plasterboard to walls; independent timber flooring; suspended ceilings. Fittings.
Sanitaryware. Fire and intruder alarms, CCTV and data cabling ,emergency lighting. Gas LPHW
central Heating, air conditioning, electric light and power, lift, alarms. External works,
rainwater harvesting.

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BCIS analysis results were rebased according to all tender price index forecast and adjusted
by the location.

Picture 2.6 – rate per m2 GIFA analysis results. Source: (BCIS service).

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Project ‘’2No Research Buildings, NETPark, Thomas Wright Way’’ has a similar structure,
design features and GIFA. This building was chosen as a basis for elemental analysis. After the
assesment of the NETPark research facilities, it’s building elements were compared against
‘MARINE RESEARCH FACILITY’ concept design features. Each building element was adjusted
according to the client’s design requirements: quality of finishes, type of foundation,
landscaping, services, drainage, fittings and furnishings.

Picture 2.7 - Elemental analysis breakdown of NETPark research facility. Source: (BCIS
service).

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Element Total cost Cost per m2 Percentage
1 Substructure 1 200 345,00 ₽ 281,05 ₽ 10%
2A Frame 750 000,00 ₽ 175,60 ₽ 6%
2B Upper Floors 550 000,00 ₽ 128,78 ₽ 4%
2C Roof 443 000,00 ₽ 103,72 ₽ 4%
2D Stairs 271 000,00 ₽ 63,45 ₽ 2%
2E External Walls 1 400 000,00 ₽ 327,79 ₽ 11%
2F External Windows and Doors 137 803,00 ₽ 32,26 ₽ 1%
2G Internal Walls and Partitions 175 432,00 ₽ 41,08 ₽ 1%
2H Internal Doors 153 912,00 ₽ 36,04 ₽ 1%
2 Superstructure 3 881 147,00 ₽ 908,72 ₽ 32%
3A Wall Finishes 84 628,00 ₽ 19,81 ₽ 1%
3B Floor Finishes 157 403,00 ₽ 36,85 ₽ 1%
3C Ceiling Finishes 90 679,00 ₽ 21,23 ₽ 1%
3 Finishes 332 710,00 ₽ 77,90 ₽ 3%
4 Fittings and Furnishings 679 814,00 ₽ 159,17 ₽ 6%
5A Sanitary Appliances 22 924,00 ₽ 5,37 ₽ 0%
5B Services Equipment
5C Disposal Installations
5D Water Installations 72 268,00 ₽ 16,92 ₽ 1%
5E Heat Source
5F Space Heating and Air Conditioning (cost include other elements)
1 850 181,00 ₽ 433,20 ₽ 15%
5G Ventilating Systems
5H Electrical Installations (Costs included in 5F)
5I Fuel Installations
5J Lift Installations 274 172,00 ₽ 64,19 ₽ 2%
5K Fire and Lightning Protection 2 922,00 ₽ 0,68 ₽ 0%
5L Communications and Security Installations 146 045,00 ₽ 34,19 ₽ 1%
5M Special Installations 453 079,00 ₽ 106,08 ₽ 4%
5N Builder's Work in Connection 90 405,00 ₽ 21,17 ₽ 1%
5O Management of the Commissioning of Services 93,12 ₽ 0,02 ₽ 0%
5 Services 2 912 089,12 ₽ 681,83 ₽ 24%
Building Sub-total 9 006 105,12 ₽ 2 108,66 ₽ 73%
6A Site Works 653 434,00 ₽ 152,99 ₽ 5%
6B Drainage 404 315,00 ₽ 94,67 ₽ 3%
6C External Services 389 416,00 ₽ 91,18 ₽ 3%
6D Minor Building Works 73 224,00 ₽ 17,14 ₽ 1%
6E Demolition and Work Outside the Site
6 External Works 1 520 389,00 ₽ 355,98 ₽ 12%
7 Preliminaries 1 077 649,41 ₽ 252,32 ₽ 9%
8 Contingencies 250 000,00 ₽ 58,53 ₽ 2%
Total (less Design Fees) 11 854 143,53 ₽ 2 775,50 ₽ 97%
9 Design Fees 421 059,76 ₽ 98,59 ₽ 3%
Total Contract sum 12 275 203,29 ₽ 2 874,08 ₽ 100%

Picture 2.8 - Elemental analysis breakdown of ‘MARINE RESEARCH FACILITY’ (Main building).

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Element Specification
1 Substructure Piling. RC suspended slab, ground beams, pile caps, columns, shear walls. Lift pit.
2A Frame Steel frame
2B Upper Floors Composite floors (Multideck MD146)
2C Roof Intensive green roof, slope 4%
2D Stairs Undefined main and fire escape stairs.
2E External Walls Facing brick and rendered block cavity walling. Cladding panels. Curtain walling. Entrance screen.
2F External Windows and Doors Aluminium windows and doors.
2G Internal Walls and Partitions Blockwork and metal stud partitions. Internal glazed screens.
2H Internal Doors Undefined with access control.
3A Wall Finishes Plaster, Altro Whiterock.
3B Floor Finishes Floor screeds and insulation. Vinyl, carpet flooring.
3C Ceiling Finishes Suspended MF ceiling.
4 Fittings and Furnishings Laboratory fittings, fume cupboards. Loose fittings Provisional Sum £679,814.
5A Sanitary Appliances IPS Sanitaryware.
5C Disposal Installations Soil and waste.
5D Water Installations Hot and cold water services.
5E Heat Source Included 5F and 5H.
5F Space Heating and Air Conditioning Heating and VRF air conditioning.
5G Ventilating Systems Mechanical ventilation. Fume cupboards included fittings.
5H Electrical Installations Electric light and power. Photovoltaics. Emergency lighting.
5J Lift and Conveyor Installations Lifts.
5K Fire and Lightning Protection Lightning protection.
5L Communications and Security Installations CCTV. Data cabling. Fire and intruder alarms. Induction loop. Access control.
5M Special Installations Automatic controls.
5N Builder's Work in Connection BWIC.
5O Management of the Commissioning of Services Drawings, manuals, commissioning.
6A Site Works Macadam roads, block paving, Haddonstone paving and gravel paths. Soft landscaping.Bin store.
6B Drainage Foul and surface water.
6C External Services Utilities.
6D Minor Building Works Link to another building.
7 Preliminaries 9% of remainder of Contract sum (excluding Contingencies and Fees).
8 Contingencies 2% of remainder of Contract sum (excluding Preliminaries and Fees).
9 Design Fees 3,43% of remainder of Contract sum.
Picture 2.9 - ‘MARINE RESEARCH FACILITY’ (Main building) Elements specification.

Justification for cost adjustment on elemental analysis

According to design specification several elements were missing in the NETPark research
facility project, such as:
5 Services
 5A Sanitary Appliances
 5D Water Installations
 5K Fire and Lightning Protection

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  5L Communications and Security Installations
 5M Special Installations
 5O Management of the Commissioning of Services
6 External Works
 6D Minor Building Works
Above elements were added to the analysis from the different project (The Lawes Open
Innovation Hub, Rothamsted Centre) with similar building function.
Substructure price were increased due to ground conditions and requirement for piles
installation. Frame element was increased by £42,000 as the area required more steel
compare to the NETPark project. Additional floor and levels height brought the price increase
in several elements: stairs, lift installation, upper floors. Significant increase in cost appeared
in 2C Roof element as per type of roof required for the ‘MARINE RESEARCH FACILITY’ project
– intensive green roof with grey water harvesting function. Minor building works included link
to wet labs building.

Concept design details:

Wet labs
Main Construction : Steel framed
Storeys: 1
Level of analysis: Elemental
Gross internal floor area =1956 m2
Storey height: =8m

Picture 2.10 - concept design produced in Revit. Source: Project design part 1.

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Accommodation and design features:
Wet labs research facility consists of wave Tanks A and B, 30 metres circular concrete basins
in diameter, 5m deep . External works including site preparation, paving’s, landscaping,
fencing, services and drainage.. Pile foundations Vibro compaction. RC suspended ground
slab. Steel frame, aluminium roof, rooflights. Block cavity external walls. Double glazed
aluminium windows. Doors. Ceramic tile, plastic wall finishes. Fittings. Sanitaryware. Fire and
intruder alarms, CCTV and data cabling ,emergency lighting. Gas LPHW central Heating, air
conditioning, electric light and power. External works.
Element Total cost Cost per m2 Percentage
1 Substructure 845 248,00 432,13 9%
2A Frame 650 000,00 332,31 7%
2B Upper Floors
2C Roof 243 129,00 124,30 3%
2D Stairs
2E External Walls 640 000,00 327,20 7%
2F External Windows and Doors 74 780,00 38,23 1%
2G Internal Walls and Partitions 75 432,00 38,56 1%
2H Internal Doors 23 912,00 12,22 0%
2 Superstructure 1 707 253,00 872,83 19%
3A Wall Finishes 24 628,00 12,59 0%
3B Floor Finishes 27 403,00 14,01 0%
3C Ceiling Finishes 2 679,00 1,37 0%
3 Finishes 54 710,00 27,97 1%
4 Fittings and Furnishings 679 814,00 347,55 7%
5A Sanitary Appliances 22 924,00 11,72 0%
5B Services Equipment
5C Disposal Installations 66 194,00 33,84 1%
5D Water Installations 1 272 268,00 650,44 14%
5E Heat Source (cost included in 5F)
5F Space Heating and Air Conditioning (cost include other elements) 850 181,00 434,65 9%
5G Ventilating Systems
5H Electrical Installations (Costs included in 5F)
5I Fuel Installations
5J Lift Installations
5K Fire and Lightning Protection 22 922,00 11,72 0%
5L Communications and Security Installations 146 045,00 74,67 2%
5M Special Installations 453 079,00 231,64 5%
5N Builder's Work in Connection 90 405,00 46,22 1%
5O Management of the Commissioning of Services 93 116,00 47,61 1%
5 Services 3 017 134,00 1 542,50 33%
Building Sub-total 5 458 911,00 2 790,85 60%
6A Site Works 653 434,00 334,07 7%
6B Drainage 804 315,00 411,20 9%
6C External Services 389 416,00 199,09 4%
6D Minor Building Works
6E Demolition and Work Outside the Site
6 External Works 420 389,00 214,92 5%
7 Preliminaries 788 344,00 403,04 9%
8 Contingencies 250 000,00 127,81 3%
Total (less Design Fees) 8 764 809,00 4 480,99 96%
9 Design Fees 350 592,00 179,24 4%
Total Contract sum 9 115 401,00 4 660,23 100%

Picture 2.11. Elemental analysis breakdown of ‘MARINE RESEARCH FACILITY’ (Wet Labs).

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Element Specification
1 Substructure Piling. RC suspended slab, ground beams, pile caps, columns and beams, trusses.
2A Frame Steel frame
2C Roof Aluminium roof
2E External Block cavity walls.
2F External Aluminium windows and doors.
2G Internal Walls and Partitions Blockwork and metal stud partitions.
2H Internal Doors Undefined with access control.
3A Wall Finishes Ceramic tile
3B Floor Finishes Ceramic tile
3C Ceiling Finishes Open ceiling
4 Fittings and Furnishings Wave tanks
5A Sanitary Appliances IPS Sanitaryware.
5C Disposal Installations Soil and waste.
5D Water Installations Hot and cold water services.
5E Heat Source Included 5F and 5H.
5F Space Heating and Air Conditioning Heating and VRF air conditioning.
5G Ventilating Systems Mechanical ventilation. Fume cupboards included fittings.
5H Electrical Installations Electric light and power. Photovoltaics. Emergency lighting.
5K Fire and Lightning Protection Lightning protection.
5L Communications and Security Installations CCTV. Data cabling. Fire and intruder alarms. Induction loop. Access control.
5M Special Installations Automatic controls.
5N Builder's Work in Connection BWIC.
5O Management of the Commissioning of Services Drawings, manuals, commissioning.
6A Site Works Macadam roads, block paving, Haddonstone paving and gravel paths. Soft landscaping.Bin store.
6B Drainage Foul and surface water.
6C External Services Utilities.
6D Minor Building Works Link to another building (Included in the main building specification)
7 Preliminaries 9% of remainder of Contract sum (excluding Contingencies and Fees).
8 Contingencies 3% of remainder of Contract sum (excluding Preliminaries and Fees).
9 Design Fees 4% of remainder of Contract sum.

Justification for cost adjustment on elemental analysis

Volume of steel required for the erection of steel frame were slightly less comparing to the
main building. The cost for frame element was decreased. Several elements were excluded
as per design specification, such as: 2B Upper Floors, 2D Stairs, 3C Ceiling Finishes, 5J Lift and
Conveyor Installations. The main elements effecting the total contract sum for wet labs
building were services - 33 percent from total contract sum in comparison to 24 percent for
the main building. The main function of current research facility to recreate waves and
currents at 1/20th scale from coastlines around the UK, Europe and beyond. 5M Special
installations – automatic controls, overhead crane and tidal generators increased the overall
cost per m2. Metal roofing decreased the cost for roof installation, as the main function were
to form building envelope and provide weather protection.

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Totals contract sum of the ‘MARINE RESEARCH FACILITY’ will be the combinations of wet
labs building and main building elements.
Element Total cost Cost per m2 Percentage
1 Substructure 2 045 593,00 ₽ 328,50 ₽ 9%
2A Frame 1 400 000,00 ₽ 224,83 ₽ 6%
2B Upper Floors 550 000,00 ₽ 88,33 ₽ 2%
2C Roof 686 129,00 ₽ 110,19 ₽ 3%
2D Stairs 271 000,00 ₽ 43,52 ₽ 1%
2E External Walls 2 040 000,00 ₽ 327,61 ₽ 9%
2F External Windows and Doors 212 583,00 ₽ 34,14 ₽ 1%
2G Internal Walls and Partitions 250 864,00 ₽ 40,29 ₽ 1%
2H Internal Doors 177 824,00 ₽ 28,56 ₽ 1%
2 Superstructure 5 588 400,00 ₽ 897,45 ₽ 25%
3A Wall Finishes 109 256,00 ₽ 17,55 ₽ 0%
3B Floor Finishes 184 806,00 ₽ 29,68 ₽ 1%
3C Ceiling Finishes 93 358,00 ₽ 14,99 ₽ 0%
3 Finishes 387 420,00 ₽ 62,22 ₽ 2%
4 Fittings and Furnishings 1 359 628,00 ₽ 218,34 ₽ 6%
5A Sanitary Appliances 45 848,00 ₽ 7,36 ₽ 0%
5B Services Equipment
5C Disposal Installations 132 388,00 ₽ 21,26 ₽ 1%
5D Water Installations 1 344 536,00 ₽ 215,92 ₽ 6%
5E Heat Source
5F Space Heating and Air Conditioning (cost include other elements) 2 700 362,00 ₽ 433,65 ₽ 12%
5G Ventilating Systems
5H Electrical Installations (Costs included in 5F)
5I Fuel Installations
5J Lift Installations 274 172,00 ₽ 44,03 ₽ 1%
5K Fire and Lightning Protection 297 094,00 ₽ 47,71 ₽ 1%
5L Communications and Security Installations 292 090,00 ₽ 46,91 ₽ 1%
5M Special Installations 906 158,00 ₽ 145,52 ₽ 4%
5N Builder's Work in Connection 180 810,00 ₽ 29,04 ₽ 1%
5O Management of the Commissioning of Services 186 232,00 ₽ 29,91 ₽ 1%
5 Services 6 359 690,00 ₽ 1 021,31 ₽ 29%
Building Sub-total 15 740 731,00 ₽ 2 527,82 ₽ 71%
6A Site Works 1 306 868,00 ₽ 209,87 ₽ 6%
6B Drainage 1 208 630,00 ₽ 194,10 ₽ 5%
6C External Services 778 832,00 ₽ 125,07 ₽ 3%
6D Minor Building Works 73 224,00 ₽ 11,76 ₽ 0%
6E Demolition and Work Outside the Site
6 External Works 3 367 554,00 ₽ 540,80 ₽ 15%
7 Preliminaries 1 881 915,10 ₽ 302,22 ₽ 8%
8 Contingencies 500 000,00 ₽ 80,30 ₽ 2%
Total (less Design Fees) 21 490 200,10 ₽ 3 451,13 ₽ 97%
9 Design Fees 778 020,44 ₽ 124,94 ₽ 3%
Total Contract sum 22 268 220,54 ₽ 3 576,08 ₽ 100%

Picture 2.12 - ‘MARINE RESEARCH FACILITY’ Elemental cost breakdown.

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The total contract sum of the ‘MARINE RESEARCH FACILITY’ project £ 22 268 220.

Marine Research Facility Project Total

Contract Sum Breackdown
4%3%
2%
9%
27%
16%
2%
7%
30%

Substructure Superstructure Finishes

Fittings and Furnishings Services External Works
Preliminaries Contingencies Design Fees

Picture 2.13 - ‘MARINE RESEARCH FACILITY’ cost breakdown by elements.

Building services form thirty percent of the overall total contract sum, superstructure is three
percent less than services, due to efficient building components: composite floors and steel
frame as per picture 9. Soil contamination and weak load bearing capacity were the reason
for expensive external works – sixteen percent of the contract sum. These are the main three
categories responsible for seventy three percent of the project cost.

Chapter summary
Elemental analysis allows the adjustment of project cost by elements, comparing the
proposed design concept to the existing projects in the BCIS data base. The project is selected
by the building function and then rebased by time and location. Compared project should
have similar area and design specifics: number of stories, type of foundation, services and
type of finishes. If elements are different or missing in the analysis it should be stated in the
report and cost adjusted to the concept design specification accordingly. Elemental analysis
is considered to be more accurate than early cost advice, it also clearly describes the overall
project cost breakdown. The reason for difference between early cost advice and the contract
sum of the elemental analysis is the lack of clarity in the stage 1 of the RIBA plan of work. The
basis for ECA is the average price per square meter, which doesn’t reflect the overall
specification of building elements obtained only at the Stage 2 of the RIBA plan of work
(concept design).

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3. Risk Allowance

In the early stages of an investment project to reduce risks, it is worth paying much attention
to the market conditions. The first step will be to conduct marketing research, if possible
involving several companies specializing in such research. Moreover, the emphasis should not
be on the current state of the market, but on the future market conditions. This is especially
relevant for large-scale and long-term projects like ‘’Marine Research Facility’’. As was
concluded in chapter one, several risks were associated with the future UK market conditions
based on Arcadis, GARDINER & THEOBALD, AECOM reports:
 labour availability
 increase in input and commodity prices (increase in TPI)
 change in government policies (Brexit no deal)
 inflation
These are external risks associated with the UK future market conditions. These risks are hard
to predict, and they are classified as uncontrollable risks. Construction insurance should
provide a cover from uncontrollable risks. There are additional risks in the ‘’Marine Research
Facility’’ project, that can be classified as partially controllable and controllable risks.
Examples of partially controllable risks for the ‘’Marine Research Facility’’:
 Availability of resources
 Investment
 Project stakeholders interest change
‘’Marine Research Facility’’ controllable risks:
 Design risks
 Procurement risks
 Contractual risks
What are the
Control measures L C R Action by whom?
risks?
Government Uncontrollable risks
1 4 4
intervention
Weather&Natural Project schedule change Project manager(PM)
2 2 4
Disasters
Vandalism Security measures 1 2 2 Client/PM
Social Interaction with public 1 2 2 Client
Currency market taking financial measures Investors

1 3 3

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 Project Creating the team Consultancy/PM/Client
2 4 8
management
Organizational efficient management and Client/PM/Contractor/Contract
2 4 8
communication Administrator
Availability of Contengency/Project Insurance Client
2 4 8
resources
Investment Keeping resources availiable 1 4 4 investment stakeholders
Change in Monitoring construction market contractor/Pm
1 2 2
technology
Quality of Quality assesment contractor/PM
1 2 2
technology
Design Detailed brief 2 4 8 Architect/Design team/Client
Design solution efficient communication between contractor/design
2 4 8
integration contractor/design team/Client team/Client/PM
Licensing Following regulations and providing local authorities/Client
1 4 4
necessary documentation
Procurement risks Taking professional advice, appointing QS/PM/Client
3 4 12
person responsible for procurement
Contractual risks Taking professional advice/ appointing CA/Client/Contractor/QS/PM
3 4 12
experienced Contract Administrator (CA)
Picture 3.1 - ‘’Marine Research Facility’’ risk assessment matrix.

Risk Analysis Matrix Next review date:

Likelihood Consequences
Level of Risk
4 4 8 12 16 1. Unlikely 1. Insignificant
<20% chance
3 3 6 9 12 2. Possible 20%-
50% chance
2. Minor Week 12, 2019
2 2 4 6 8 3. Likely 50%- 3. Moderate
Likelihood

90% chance
1 1 2 3 4 4. Certain >90% 4. Catastrophic
chance
1 2 3 4
Score likelihood Score severity
Consequences
Picture 3.2 - Risk assessment matrix legend.
Risks that scored 8-12 should be the priority for project team: procurement and contractual
risks, project management, organizational, availability of resources, design, design solution
integration. The risks strategy should be proactive – taking control over risks before they even
appear, this approach would enable smooth run and transition of the ‘’Marine Research
Facility’’ project.
The purpose of contingency found to secure the project in case of internal controllable
risks/errors described above. The found should be used if controlled measures have failed.
Above risks, from 8-12 group category – high priority risks were split into three categories: 1.
Design development risks (design, design solution integration), 2. Construction risks (project
management, organizational, availability of resources) and 3. Employers risks (procurement
and contractual risks). Contingency found of £ 500,000, which is 3% of the total contact sum
were allocated to provide a budget for controlling three categories of risks. It is
recommendable to keep 10 % of the total contract sum in the contingency found in case of
failure or other unplanned circumstances, however not every client has the availability to

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provide extra financial support. Decent construction insurance should be the main source for
dealing with consequences of risks in the ‘’Marine Research Facility’’ project.

4. Life Cycle Cost Analysis

The aim of the analysis to provide the client with the lowest cost options available for the
‘’Marine Research Facility’’ asset. As the client will own, operate and maintain the building
through its whole life cycle, LCA (life cycle analysis) is the essential part of this report and
offers the best solutions in order to minimise future client expenditure.
External wall will be a subject of analysis. Two types of external wall coverings will be assessed
in terms of their performance through the building life cycle:
 Option A. Precast concrete natural stone-faced panels: insulation; lining and fixings.
 Option B. External wall structure: class B engineering brick.
The life of the building is assumed to be 60 years for the Option A and 80 years for the Option
B. Both types of cladding will last the entire life of the building, which is expected to be 60
years. The life cycle of the building element is based on the BCIS median typical life expectancy
analysis results, as per picture 12 and 13.

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Picture 4.1 - Option A. Precast concrete natural stone-faced panels: insulation; lining and
fixings analysis results. Source: BCIS component life assessment.

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Picture 4.2 - Option B. External wall structure: class B engineering brick. Source: BCIS
component life assessment.
Factors to be considered when assessing
the life expectancy of option A:
• permeability
• exposure
• local air quality
• insulation level
• reinforcement protection
• ability to accomodate
movement
• loading
• panel dimensions
• weathertightness
• workmanship
• aesthetic requirement
Factors that were considered when
assessing the life expectancy of option B:
• brick type and quality
• mortar joint quality and strength
• exposure
• local air quality
• orientation
• position
• area of brickwork
• movement
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OPTION A
Future maintenance cost for option A were assessed based on technical performance data
retrieved from the manufacturer data sheets.
Type of natural stone: weiberner tuff

Technical characteristics:
Gross density: 1.6 to 1.8 g/cm3
Pressure resistance (Compressive Strength): 9.67 N/mm2
Bending tensile strength: 0.5 N/mm2
Breaking load at anchor hole: 241 N (for 4.2 cm thickness)
Absorption of water: 22.2 vol.-%
frost-proof: yes
Main advantages: decorative effect, frost resistance, good corrosion resistance, durability,
good sound and heat insulation.
Main disadvantages: exposure to pollution in dusty environments.
In terms of performance, natural stone cladding is almost eternal, but in order for it to please
its appearance, appropriate care is needed. Now there are various chemical means allowing
to keep natural color and gloss of a natural stone longer. Wax protective coatings improve
the appearance of the stone, protect it during operation and allow you to wash treated stone
coatings with plain water. Early deterioration may be attributed to atmospheric pollution,
carbonation of concrete, alkalisilica, reaction, reinforcement corrosion, frost action, heavy
impact. Source : (Stone Source, 2012).

Based on the above factors the proposed maintenance cost for option A include:
Detailed inspection 5 -year intervals at a cost of £10000
Major overhaul required every 20 years at a cost of £200000
The discount rate is 3% and the cost of externall wall £2000000 as per chapter 2, paragraph
2.3 – elemental cost breakdown.

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Option B
Future maintenance cost for option B were assessed based on technical performance data
retrieved from the manufacturer data sheets.
Class B engineering brick:

Technical characteristics:

Technical properties BS EN 771-1

Compressive strength: Min. 75N/mm2

Water absorption: Max. 7 %

Durability designation: F2

Active soluble salts: S2

Main advantages: Good corrosion and frost resistance, advanced technical properties.
Main disadvantages: Class B bricks are considered less attractive.
Brick is one of the most durable building materials. However, like any other material, it
needs repair and proper care. Early deterioration may be attributed to poor workmanship,
chemical interactions within the bricks, excessive initial settlement of the structure, lack of
movement joints on long runs, excessive loading, heavy impact. However, timely elimination
of defects in the brickwork helps protect the facade of the building and significantly extend
its service life. Source: (BCIS, 2019).

Based on the above factors the proposed maintenance cost for option B include:
Redecoration every 10 years at a cost of 120000
Detailed inspection 10-year intervals at a cost of £10000
The discount rate is 3% and the cost of external wall £1700000 as per chapter 2, paragraph
2.3 – elemental cost breakdown and adjusted according to the price of material.

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LCC analysis calculations

Option A
i= £ 0,03
Cost Year PV/PVA factor PV Value
Capital £ 2 000 000,00 0 1 £ 2 000 000,00

Overhaul £ 200 000,00 20 0,553675754 £ 110 735,15

£ 200 000,00 40 0,306556841 £ 61 311,37

Inspection £ 10 000,00 5 0,862608784 £ 8 626,09

£ 10 000,00 10 0,744093915 £ 7 440,94
£ 10 000,00 15 0,641861947 £ 6 418,62
£ 10 000,00 20 0,553675754 £ 5 536,76
£ 10 000,00 25 0,477605569 £ 4 776,06
£ 10 000,00 30 0,41198676 £ 4 119,87
£ 10 000,00 35 0,355383398 £ 3 553,83
£ 10 000,00 40 0,306556841 £ 3 065,57
£ 10 000,00 45 0,264438624 £ 2 644,39
£ 10 000,00 50 0,22810708 £ 2 281,07
whole life cycle cost= £ 2 220 509,71

Option B
i= £ 0,03
Cost Year PV/PVA factor PV Value
Capital £ 1 700 000,00 0 1 £ 1 700 000,00

Redecoration £ 120 000,00 10 0,744093915 £ 89 291,27

£ 120 000,00 20 0,553675754 £ 66 441,09
£ 120 000,00 30 0,41198676 £ 49 438,41
£ 120 000,00 40 0,306556841 £ 36 786,82
£ 120 000,00 50 0,22810708 £ 27 372,85

Inspection £ 10 000,00 10 0,744093915 £ 7 440,94

£ 10 000,00 20 0,553675754 £ 5 536,76
£ 10 000,00 30 0,41198676 £ 4 119,87
£ 10 000,00 40 0,306556841 £ 3 065,57
£ 10 000,00 50 0,22810708 £ 2 281,07
whole life cycle cost= £ 1 991 774,65

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The overall LCC analysis calculations shows that WLC for Option A natural stone cladding is
higher = £2 220 509,71. However, if the client decides that building aesthetics is the priority
and he is willing to pay higher capital cost; in the long run the overall expenditure after
project compilation will be £71 264,94 less in comparison to Option B.
Option A expenditure after installation £220 509,71.
Option B expenditure after installation £291 774,65.
LCC analysis is a rough estimate of the future project expenditure, which helps the design
team to choose a better option in the long run. The analysis doesn’t take into count factors
such as vandalism and extreme weather conditions, which can increase the WLC of the
‘‘’Marine Research Facility’’. Maintenance cost and material prices may change during
building life cycle. Factors such as £ sterling pound purchasing power and inflation are also
important for accurate analysis; however, it is impossible to make a forecast over such long
period.

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931144/

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Sir David Higgins, M. B. (2015). Level 3 Strategy. HM government.

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Technical-Performance-Specs.pdf. Retrieved from http://www.stonesource.com:
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