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The level of accuracy of a project budget estimate is in part a product of the method of estimating that is applied. Architects should seek instructions from the client as to the level of accuracy required and the costs that the client is prepared to incur. Some estimates are subject to greater tolerances than others.
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Cost per unit area
The cost-per-unit-area method is used to provide a basic and mostly preliminary estimate and is arrived at by multiplying areas by unit-cost rates. The technique is useful as a general indicator of cost. It is highly sensitive to design, cost data, market and locality influences and should be highly qualified. The establishment of reasonable limits should involve appropriate contingency allowances. The success of its use depends on two self-evident pieces of data. The first is area and the second, the applicable cost rate.
Areas
Buildings are generally measured in terms of gross area which includes walls, columns, enclosed ducts and shafts. In the early stages of a project, areas can be established from the brief, provided that net areas are adequately grossed up to include allowances for circulation, structure, services and the like. Accuracy can be improved by applying different grossing factors to different types of spaces.
Cost rates
Cost rates are obtained from a number of different sources. These include rates from previous projects or from a range of readily available guides published by quantity surveying and estimating organisations.
Basic building cost
The basic building cost is established by multiplying areas by the appropriate cost rates. If the project is divided into various types of spaces, their costs are separately calculated and added together.
Building cost estimate – influencing factors
Basic building cost requires taking into account any influences on the accuracy of the basic cost (see Budget estimates – influencing factors). Assessment of the impact of such influences will be a matter of personal judgment. Opinions can be sought from various sources, such as professional colleagues, contractors, clients and others. In any event it will be up to the architect to determine whether or not to factor in the effects of various influences.
Elemental rates
Establishing project cost through the use of elemental rates will normally provide more accurate results. The method requires that the building design is advanced, finishes identified and project specifications developed to a stage where quality of projected outcomes can be identified. This method involves dividing the building into elements which relate to a single trade or a combination of trades. Elemental-cost analysis is a method used by estimators and quantity surveyors, and provides results of a higher order of accuracy but requires greater attention to detail than the cost-per-unit-area method.
Work sheets
Prepared work sheets are commonly used to allow for ease of cross-referencing items with each other and with a summary page of costs that shows the total from each page/trade.
Cost rates
The procedure is to identify an element. A brief description is then inserted in the item column – the element of work is measured from the drawings, the quoted rate adjusted as necessary for project peculiarities applied to establish an elemental cost. Each building element is costed and each page totalled.
Specialist services
Specialist consultants should be expected to provide estimates of costs for their services. Their estimates can be incorporated into the schedule as elements. Allowances should also be made for the contractor's work associated with each service.
Summary page
The summary of page totals of each elemental group are in turn summarised for the project. Provision for preliminaries and builders' profit and margins are commonly added to the main summary page where such items have not been built into the rates. It is also important to include (or note the exclusion of) other project costs. These can include authority charges, connection fees, loose furniture and equipment, furnishings, consultant fees, relocation costs etc.
Detailed estimates
This method involves taking off, extending and pricing quantities. It is by far the most detailed, but requires fully developed drawings and specifications. The preparation of full quantities requires the specialist skills of a quantity surveyor.
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