Introduction to an

Elemental estimate
Aka Preliminary Cost Plan
What then is the
purpose of cost
planning?

2
 COST CONTROL
Pre-contract cost control Post-contract
cost control
COST PLANNING
Cost limit / Analysis to Cost
Indicative Outline Cost Detailed Cost Analysis of
Plan Plan check Cost Monitoring /
cost Final
Plan against Forecasting /
First Account
Cost priced SoQ Financial
estimate Checks Statements

Outline Detail Production Project Site Feed-

Inception Feasibility Scheme Design SoQ Tender Completion
Proposals Design Information Planning Operations back

BRIEFING SKETCH PLANS WORKING DRAWINGS SITE OPERATIONS

3
Cost planning

▪ Cost planning is the technique by which the

budget is allocated to the various elements
of an intended building project to provide
the design team with a balanced cost
framework within which to produce a
successful design.
• (RICS definition)
4
INFORMAL INDUSTRY
PRACTICES
▪ Before NRM1, ANZSMM2018 etc.,
almost every cost estimator had
their own version of cost planning
techniques.
▪ This created lack of consistency &
numerous variations. Impossible to
compare two estimates for two
similar buildings
 Cost
planning
during
the design
and
constructi
on phases

Ashworth Fig 15.1 p.306

Recap An estimated quantification of
the amount of a prospective
expenditure
▪ Definition of Estimating
– A “best judgement” of the future cost of a
project

– A technique used to forecast the possible costs

incurred for a certain building or construction
project via systematic calculation methods
employing certain techniques
To prepare an approximate,
realistic cost of a project in
an orderly, efficient,
comprehensive and repeatable
manner
SELF STUDY

Who are the parties involved in the cost

estimate?
What are the purposes of a cost estimate?
How does the cost estimate assist the various
parties?
Client

▪ A cost estimate assists him/her in ALLOCATING THE BUDGET

required to execute a planned project.
Design Team

▪ Cost Estimate acts as a GUIDELINE in preparing a design so that it

does not exceed the cost limit stated by the client.
▪ Cost limit = Client’s budget
Contractor / Builders

▪ Cost estimate will, assist in the preparation of OFFER PRICE to

ensure the offer price forwarded is reasonable for bidding / tendering
process – competitive bid price a contractor must be low bidder on a
certain number of projects, yet their prices cannot be so low that it is
impossible to make a profit on them.
Project Manager

▪ Cost estimate is used as guideline to CONTROL THE COST of a

project especially in the preparation stage of the design and in the
execution of project at the site.
Building Manager / Facility Manager

▪ Cost estimate assists in establishing information on the probable

total cost of repairs and maintenance of the building when the
building is completed.
Cost
planning
during the
design and
construction
phases

Ashworth Fig 15.1 p.306 15

Design stage Estimate type Example

Cost per bed

Unit Cost per pupil
Cost per workstation
Brief stage

Sketch design Space Cost per m2 gross floor area

Element Cost of element per m2

Gross floor area

Detailed
design Features Approximate Quantities

SMM Items Bill of Quantities

16
What is an ELEMENT?
AN ELEMENT

A structural or building element are the

main components of
▪ a structure like a bridge (foundations,
piers, deck) or
▪ a building (floors, walls and roofs).
These are common irrespective of the
design of the bridge or the building.
(Performs the same functions irrespective
of the design).

18
NRM 1 - ORDER OF COST ESTIMATING AND COST
PLANNING FOR CAPITAL BUILDING WORKS

NZIQS – ELEMENTAL COST

PLANNING

19
20
21
 Estimated Total Building Cost = NZ $12 million?

Cost Limit

Substructure Superstructure Furniture &

Services (12%) Finishes (15%)
(20%) (40%) Fittings (13%)
Target cost Target cost Target cost Target cost Target cost
= $xx? = $xx? = $xx? = $xx? = $xx?

The cost limit needs to be distributed into main elements of the building
Example 1
Given budget limit of NZ$ 12
million
Example 2

Given a
Total
cost/m2
GFA you can
work out a
budget
Example 2
continued