MEP Cost Planning in the

Construction Projects

Presented by Mr. Ammar Baig, MQSi, AIIQS

MEP Cost Consultant

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 Structure of Presentation
MEP Cost Planning
➔ MEP systems in buildings
➔ Pre Contract Stages (Consultant’s Scope)
➔ Types of Cost Estimates
➔ The Contractor’s Estimation Process

Reducing Risks in Estimation

➔ Risks associated with Estimation.
➔ How to reduce Risks

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What is Cost Planning in construction industry ?

Method of determining the estimated cost for a project

OR
Technique by which the budget is allocated to the various
elements of an intended building project.

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To find out cost To keep within budget

What is the objective of a Cost Plan ?

Efficient Design Process Value for Money

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 MEP Systems in Construction

MECHANICAL ELECTRICAL

HVAC PLUMBING FIRE HIGH CURRENT LOW CURRENT

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 THE PRE-CONTRACT STAGES IN CONSTRUCTION

RIBA PLAN OF WORK 2020

● CONCEPT DESIGN ( Stage 2 of RIBA )

● SCHEMATIC DESIGN OR SPATIAL COORDINATION ( Stage 3 of RIBA )

● DETAILED OR TECHNICAL DESIGN ( Stage 4 of RIBA )

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THE TYPES OF COST ESTIMATES DURING PRE CONTRACT STAGES
1. Conceptual Estimates - The conceptual estimate is performed during budgetary phase when design
details are not available.
2. Preliminary Estimates - The preliminary estimate, on the other hand, take place when the
preliminary design is available, which is around 30% - 40% of the total design.
3. Detailed Estimates - Detailed estimate is prepared from completed plans and specifications.

All estimates are

approximations, and are
based on judgment &
experience.

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 THE CONTRACTOR’S ESTIMATION PROCESS

The estimation process usually considers the basic costs required to complete the
construction works, the amount of overheads and profits needed to sustain the company.

The main information or documents required for pricing a project with traditional
contracting approach:
● Project Drawings & Schedules

● Specifications

● Bill of Quantities

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 DECISION ON TENDER
This is a management decision based on the firm’s position at the time of invitation in relation to:

● Its Current workload. ● Its Current Estimation workload

● Its Future Commitments. ● The prestige associated with the project / the client.

Collection of information
If it is decided to tender for the project, the estimating staff should assemble information about project
costs.

● Examine contract documents ● Establish the time scale for tendering and Key dates

● Send enquiries to suppliers and ● Visit the site & locality

subcontractors with a time scale

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 CONSTITUENTS OF A RATES

How to build
MATERIAL LABOUR PLANT
up unit rates ??
OVER HEADS

Site OH
❖ Site Staff Salaries
❖ Utility Charges
❖ Porta Cabin
❖ Office Equipments
❖ Company Vehicles
❖ Sign Boards
The profit will vary with individual
firms, but generally it is in the range of
5-10%
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General OH
❖ Rent for head office
❖ Salaries for Directors &
Head office staff
❖ Office Equipments,
Stationary, Cars,
Telephone
❖ Head Office Utility Bills
❖ Staff Insurances
SAMPLE BOQ TEMPLATE

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 RISKS & CONTINGENCY
Risks are associated with all the projects, however, we can reduce those risk by including certain contingency.
Projects with a high risk will require higher markups.

Below are few important risks associated with construction projects.

❖ Time of year – work during the extreme summer / winter months carries more risk regarding delays and
slows progress.
❖ Type of construction – innovative design will increase risk as faults may arise more often and corrective
action can cause delays.
❖ Type of tender – fixed price tenders are riskier than ones where increases in costs can be recovered.
❖ Location of Project – some project locations are difficult to commute and will increase the risk to the
contractor.

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 REDUCING RISKS
● Focus on your weaknesses as well as strengths:
➔ You / your team members are likely to be very experienced in some areas and less so in others.
➔ The area an individual has least expertise in will generally be the area where they have the greatest
margin of error.
➔ Errors such as including omissions, incorrect product selection, inappropriate use of labour rates etc.
● Manage your last-minute changes effectively.
➔ Last minute changes, or those made in a hurry are inherently risky, mainly created using Excel.
➔ It is easy to accidentally alter formulas, delete cells, forget to include line items and cut/paste errors.
➔ Structure your estimates well so that it is easy to make changes at short notice.
● Analyse your historical estimates and consider these questions:
➔ Which tenders did you win?
➔ Who were they with? Who never awards you the work?
➔ How accurate were your estimates? Did you make the profit you expected to?
➔ Are you more successful in certain industries?

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 THANK YOU !

Disclaimer:
The presentation has been made available for informational and educational purposes only.
The information contained in the presentation represents the views and opinions of the original creator and does not necessarily represent the views or opinions of MEP Learnings.
MEP Learnings disclaims any and all liability to any party for any direct, indirect, or other consequential loss arising directly or indirectly from any use of the presentation.

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 AMMAR BAIG SAMEER HUSSAIN

Speaker, MEP Cost Consultant Host, Mechanical Engineer

https://www.linkedin.com/in/ammarbaig-qs/ https://www.linkedin.com/in/sameersnetwork/

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