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The project budget estimate will be influenced by a wide range of factors, some of which are within the architect's control, and some which are not.
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Design and construction factors
Buildability: unusual construction methods should raise the expectation that higher costs should be expected.
Building envelope: the three-dimensional envelope within which the final form of the building must fit, is the key determining design factor in establishing an estimate.
Building height: the building height must be balanced against building efficiency and costs associated with material and systems performance and handling requirements.
Building services: in buildings with complex mechanical and electrical services the architect is to ensure, in consultation with the specialist consultants concerned, that provision is included for these services in the overall building estimate. This is a specialised area and care should be taken to determine the extent of and allow for any contract work associated with the work of the services subcontractors.
Building type: buildings of the same functional type often tend to have similar cost characteristics.
Construction time: construction time is influenced by factors including:
- physical (plant and equipment)
- financial (capacity of the builder to maintain a project cash flow, including consideration of a contractor's commitment to other projects)
- skill resources (subcontractors, administrative capacity, computer literacy and equipment/software) available to a contractor
- unusual events, eg Covid-19 pandemic
- global factors eg increase in cost of steel.
The combination of a particular building-project design and a particular contractor's organisation, plant and equipment, determines an optimum construction time. Extra cost is involved to shorten or lengthen this optimum time.
Cost in use: the client must measure the capital cost of development against the cost of maintenance and replacement cycles.
Efficiency ratios: three ratios commonly referred to contribute to the determination of design efficiency:
- Plan form is the wall/floor-area ratio. This ratio is subject to scale effect – generally a square building is cheaper than a rectangular building of the same area.
- Building volume is the wall plus roof/floor ratio. This ratio is also subject to scale effect – the larger the building, the smaller the ratio, particularly where the building is multi-storied.
- Efficiency ratio is the ratio of the net areas of the building (such as lettable floor area or useable area) to the gross areas. This ratio is most often used in assessing the economics of commercial buildings.
Materials and equipment: the quality of materials and equipment can influence building costs.
Repetition: low levels of repetition increase construction administration and superintendence costs to both the contractor and consultants.
Standardisation: using standard industry practices helps to keep costs to an acceptable level.
Other factors
Contractual: the type of building contract selected will affect building cost.
Documentation: the accuracy, appropriateness, completeness and proper coordination of contract documents is an important factor in the accuracy of tendering and minimising the extent of cost-adjustment claims during construction.
Location: the cost of construction varies in relation to location as a result of the relationship of a site to points of supply of services, materials, systems and labour.
Market forces: fluctuations in demand and availability of materials and labour on a regional or on an individual basis can affect building costs.
Nature of the site: topography, access, geotechnical information, neighbourhood amenity and environmental considerations are some variables that can influence cost.
Seasonal conditions: extreme variations in weather conditions impact on cost through impacts on available time for building work.
Small projects: In small or complex projects, particularly residential work, the difference between the highest and lowest tender is often substantial. Contributing factors include the proportion of cost attributable to project preliminaries, management, risk and anticipated difficulties in the management of construction. Prediction of the limits of accuracy is virtually impossible and the client must be advised of this accordingly.
Tender conditions: these can contribute to the attribution of risk and can have a significant effect on contract price.
Client expectations and financial reality are issues that must be addressed and resolved at all stages of a project.
Disclaimer
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