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Relevant Elements of the Project – Quantity Factors
The elemental cost plan provides a detailed overview of the project expenditures by evaluating each of the relevant elements. In the scope of construction, some of the aspects include substructure, superstructure, internal finishes, fittings, services, external works, and preliminaries. In other words, the construction process is broken down into particular elements to estimate the project costs. In addition to a detailed overview of the expenditures, the elemental cost plan demonstrates the weight of each expense, calculating all measures in percentages. This approach allows comparing the project’s financial metrics with similar projects to assess the construction’s validity.
For the current assignment, it is crucial to assess the quantity factors of the relevant elements of the construction project in London to adjust the cost plan for the Sheffield project. The total contract sum for the London initiative is £5,739,449, with 68% accounted for building sub-total elements, 5% for external works, 24% for preliminaries, and 2% for contingencies. The overall floor area is 2321m2, and the building comprises eight floors, including the basement. On the other hand, the Sheffield project is a four-storey building with a ground floor and a lower ground floor, accounting for a gross floor area of 1191m2. From these considerations, the quantity factors for superstructure elements can be halved and the services reduced by 150%, resulting in approximately £1,600,000. Moreover, this project saves additional funding through the intelligent usage of resources and the omission of some elements. A more thorough calculation is presented in the consequent sub-chapters.
Tender Price Index and Location Overview
Additionally, it is essential to analyze the tender price indices and the impact of the location on the cost plan. The former is a metric that determines “price movements in the construction industry” (RICS, 2020). The measure for the London project is 267 on the 1985 BCIS index base, while the Sheffield project proposes the tender price index of 328. Consequently, the location plays a crucial role in the cost estimations. For instance, the London project is associated with higher costs precisely since there are additional complications and restrictions for construction in the capital. This measure significantly affects the overall costs and the preliminary expenses. Hence, considering the location factor, the Sheffield project is expected to have a 22% reduction in elemental costs compared to the London construction. Moreover, due to the difference in location and the tender price index, the Sheffield project is predicted to account for 9% of the total costs to preliminaries, as opposed to 24% in the London project. Ultimately, the tender price and location have a substantial impact on the elemental cost plan.
Proposed Plan Calculations
Lastly, the current case study proposes an adjusted cost plan for the project in Sheffield based on the characteristics of the construction in London. The notable differences that affect the contract sum include the lack of concrete piles (saving £75,000), the omission of rooftop gardens, and the restriction of the overall gross floor area. All these factors should be included in the final calculations for the Sheffield project assessment, presented below in Table 1. For the current estimations, the adjusted cost plan assumes that the expenses on all elements are reduced by 22% due to the location and tender price index differences from the London project. Consequently, it is possible to measure most metrics in the plan, having established the cost per m2 and the gross floor area. The overall expenses of preliminaries (9%) will be deduced from the total contract sum at the end of the calculations.
Table 1:Adjusted elemental cost plan for the Sheffield project
Based on the presented calculations, the contract sum in the adjusted cost plan for the Sheffield project results in approximately £1,692,000, which is considerably lower than the London project’s expenditures. The primary causes include a lower gross floor area, location, impact of associated factors on preliminary costs, and the lack of concrete piles. The approximation aspect of services concerns the indirect relationship between the gross floor area and the necessary funding for providing various services, including ventilation, gas systems, protective installations, and other assets. Hence, even accounting for the 22% reduction in costs compared to the London project, the estimation of services is only relatively accurate. Nevertheless, this plan might serve as a preliminary estimation of the required funding for the elemental cost plan. Ultimately, the current case study has examined the concepts of WLC and LCC, discussed the general characteristics of an elemental cost plan, and calculated the expenditures for the proposed project in Sheffield.
References
RICS. (2020). New tender price index calculation method developed for BCIS. Web.
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