PRELIMINARY PROJECT ESTIMATES of project.pdf

About procurement

1. PRELIMINARY
PROJECT ESTIMATES
M.D.N.Sisilaksha
(B.Tech (Hons) in Quantity Surveying
NCM-IQSSL)

2. PRELIMINARY PROJECT
ESTIMATE/BUDGET/APPROXIMATE
ESTIMATE





An approximate estimate is an attempt to forecast
the cost of a building at the inception of the
project.

3. At the very inception of a construction
project, the prospective Employer
required know to what will be the
budget/approximate estimate of the
prospective project and other cost
impacts to get a decision whether to go
ahead or to amend the scope or to post
phone or cancel the project.

4. The Estimator with his vast knowledge in
construction cost and considering the
present day market conditions and
changes in social , political and economic
conditions he will give his cost prediction.

5. TECHNIQUES OF PREPARING PROJECT ESTIMATES

6. The Cube Method

This is the traditional method. When a contract was
completed the agreed final account amount will be divided
by the cubic content of the building .

By this way the Quantity Surveyors are maintaining these
information for future use.

When an estimate was required for a new project of
similar character ,the cubic metreage would be calculated
& multiplied by and appropriate rate per cubic metre taken
from a previously maintained records to obtain the
approximated cost prediction of the proposed project.

7. After considering the present day market
conditions and changes in social , political
and economic conditions .

8. The following rules will apply when
calculating the cubic content
External area (from out side of the external
walls to out side of the external walls)
Height of the building is measured from top
of foundation to 600 mm above the roof
level if the roof is a flat roof and mid of the
slope if the roof is sloping

9. However,the cube is unreliable unless two very similar
buildings are being compared. Even then there are grave
dangers, as shown in the following example concerning
two factories “A” & “B”, shown in Fig. 2.

10. 5m

6m




30m
30m 36m 36m



FIG. 2 Factories “A” & “B”

11. Factory “A” cost Rs.24,000,000/=
& an estimate is required for
factory “B” which is of similar
design & construction but slightly
larger. The cube of the first factory
is 30m × 30m × 5m = 4,500m
3
,
which when divided into the cost
of Rs.24,000,000 gives a rate of
Rs.5333.33 per cubic metre.

12. The comparable estimate for factory “B” using
the same rate would be
36m × 36m × 6m = 7,776m
3
× Rs.5333.33 =
Rs.41,469,408 This is 72.79% more than the
cost of factory “A”, but a quick inspection
shows that the areas of floor & roof have only
increased from 900 to 1296m2 and that the
area of external walls has increased from
120m × 5m = 600m
2
to 144m × 6m = 864m
2
;
in both cases an increase of 44%.

13. As the building cost will be proportionate to the quantities
of the floor, roofs & supports & walls (there are no other
major components in this simple factory) it follows that
factory “B” will cost Rs.24,000,000 plus 44%, that is
Rs.34,560,000/=; & therefore the estimate of
Rs.41,.469,000/= obtained by using the cube rate of
Rs.5333.33 will be badly wrong. In fact the correct cube
rate would be Rs.4444.44 (Rs.34,560,000÷ 7,776m
3
).

14. Would we have guessed this without working out the floor,
roof & wall areas which fortunately are easy to calculate in
this instance?

This is the basic fault of the cube, that it is just a
measurement of the air which the building displaces &
does not truly reflect the quantity of labour & materials in
forming the enclosures & divisions which generally have
superficial & not cubic dimensions. As the size of a building
increases or decreases the cubic measurement will
fluctuate far more violently than the measurements of
these components.

15. Another important objection to the cube as a means of
expressing the size of a building is that it takes no account
of the number of storeys. Let us consider a hypothetical
office block 50m long, 15m wide & 30m high, containing
seven storeys. The total cube (allowing 0.60m above the
roof & 1.40m down to foundations) will be 24,000m
3
& we
may say that the cost will be in the region of
Rs.300,000,000/= which is Rs.12500/= per cubic meter.
But let as now suppose exactly the same building but with
eight storeys each of 3.75m overall instead of seven
storeys of 4.29m. The size has not changed, the cube is
still 24,000m
3
.

16. It is immediately obvious that the same cube rate cannot
be applied. There is more of everything in the second
building; not merely the extra floor itself with its expensive
floor & ceiling finishes but more doors, windows, skirting’s,
additional toilets, extra lift landings, greater heating &
lighting load, the strengthening of the structural frame &
foundations to take the dead weight & superimposed loads
of the additional floor. Once again the volume of space
occupied by the building is no real guide to its cost.

17. The Superficial Area Method

This is an alternative single-price rate method in
which the total floor area is measured. The usually
accepted rule is that the area of the building inside the
external walls is taken at each floor level.

It is a more recent method than cubing, & first
came into use for schools local authority housing etc.,
where storey heights are constant. It is more accurate than
the cube wherever storey heights are reasonably similar; in
the case of the factory example which was worked out
earlier in this chapter it would have given a completely
accurate answer, although to an extent this is fortuitous.

18. Factory “A” cost Rs 24,000,000; superficial area 900m
2
; = Rs.26,667 per m
2

Factory “B” superficial area 1,296 m
2
@ Rs 26,667 = Rs.34,560,432

In the case of the office block the superficial area method would have allowed for the additional
floor:

Seven-storey building 7 × 750m
2
= 5,250 m
2

5,250 m
2
@ Rs 57142 = Rs 300,000,000/=.
Eight-storey building 8 × 750m
2
= 6,000 m
2


6,000 m
2
@ Rs. 57142 = Rs342852000/=

19. This method has slightly over-valued the additional floor;
the increase in cost will not be as high as the direct
proportion of the floor area because some items of cost will
hardly be affected, for example the area of the external
walls has not altered. Nevertheless it has done much
better than the cube method.

The superficial area also has the virtue of being closer to
the terms in which the client’s requirements are expressed;
the accommodation is more likely to be related to floor
area than to cubic displacement. Sometimes when a very
early estimate is required the only data available may be
the approximate floor area

20. However, the superficial area is very unreliable as a basis
for the comparison of buildings such as churches which
may have enormous differences in storey heights. A single
storey church may be anything from 5m to 15m high & a
rate based purely upon plan area will not enable this to be
taken into account. The cube on the other hand will allow
for the difference in height, though as usual it will
exaggerate the cost effect. If the grandeur of the
specification rises as well as the roof (there is often a
tendency towards this) the cube will appear to be doing
quite well!

21. The Storey-Enclosure Method

About twenty years ago it began to be painfully
apparent that the traditional methods of single price
estimating were not producing sufficiently accurate results,
& a number of quantity surveyors who were worried about
this set up a study group. The fruits of their labours
appeared in a paper entitled “A New Approach to Single
Price-Rate Approximate Estimating” which was read to a
General Meeting of Quantity Surveying members of the
R.I.C.S. in April 1954 by Mr. J.G. Osborne, a member of
the group. The paper which was extremely interesting & is
still worth reading by anyone interested in the problems of
approximate estimating,* introduced the “Storey-Enclosure
System”.

22. In this method the areas of the various floors, roofs &
the containing walls are measured, each is weighted
by a different percentage & the resultant figures
totalled to give the storey-enclosure area. The rules
are briefly stated here in order to work out an
example:

1) Twice the area of the lowest floor.
2) The area of the roof measured on the plan.
3) Twice the area of the upper floors, plus an addition
of 15% for the first floor, 30% for the second floor,
45% for the third & so on.
4) Area of external walls.

23. Let us apply this method to our factory & office block examples.

Factory “A”

m
2
m
2


Lowest floor = 900 ×2 = 1,800
Roof = 900 ×1 = 900
External walls = 600 ×1 = 600
Storey-Enclosure Area = 3,300

Cost = £45,000 representing £13.6364 per square metre of storey-enclosure area.


Factory “B”

m
2
m
2


Lowest floor = 1,296 ×2 = 2,592
Roof = 1,296 ×1 =1,296
External walls = 864 ×1 = 864
Storey-Enclosure Area = 4,752

4,752m
2
@ £13.6364 = £64.800.

24. As we have seen previously this is the correct answer.
Let us now tackle the office block, noting that unlike either
of the previous methods this will allow both for the
additional floor &for the unchanged external wall area. It
also makes an allowance for the extra cost of high
building.

25. Seven storey office block

m
2
m
2

Lowest floor 750 ×2 1,500.0
First floor 750 ×2.15 1,612.5
Second floor 750 ×2.30 1,725.0
Third floor 750 ×2.45 1,837.5
Fourth floor 750 ×2.60 1,950.0
Fifth floor 750 ×2.75 2,062.5
Sixth floor 750 ×2.90 2,175.0
Roof 750 ×1 750.0
External walls 3,900 ×1 3,900.0

Story-Enclosure Area 17,512.5

Cost = £504,000 representing £28.78 per square metre of storey enclosure area.

26. Eight storey office block

m
2
m
2

Lowest floor 750 ×2 1,500.0
First floor 750 ×2.15 1,612.5
Second floor 750 ×2.30 1,725.0
Third floor 750 ×2.45 1,837.5
Fourth floor 750 ×2.60 1,950.0
Fifth floor 750 ×2.75 2,062.5
Sixth floor 750 ×2.90 2,175.0
Seventh floor 750 ×3.05 2,287.5
Roof 750 ×1 750.0
External walls 3,900 ×1 3,900.0

Story-Enclosure Area 19,800.0

19,800.0 m
2
@ £28.78 =£569,844.

27. This is more likely than the £576,000 obtained by the
superficial area method; it will be remembered that it was
impossible to obtain any real comparison between the two
office buildings using the cube method.
Here was a system representing an enormous
advance on anything existing previously; a system which
took into account plan shape (a very important factor),
storey heights & overall building heights. A table submitted
with Mr. Osborne’s paper showed that when a number of
buildings of all sorts had been investigated the new system
gave reasonably consistent result in 60 cases, as against
51 with the superficial area method & 43 with the cube. (It
was suggested that lifts & other engineering services
should be excluded from the calculation & worked out
separately).

28. Elemental Estimating

Although the storey-enclosure method brought
increased accuracy it was still no more possible to relate
the working drawings (when received) to the estimate than
it had been with the earlier methods. The omnibus “rate”
bore no definite relationship to the actual cost of any of the
measured areas but was only a theoretical average of
them all. In the discussion which followed Mr. Osborne’s
paper, James Nisbet (who subsequently became Chief
Quantity Surveyor to the War Department) put his finger on
the only real weakness in the storey-enclosure approach to
the problem. He asked whether (if the walls, floors & roofs
were all going to be measured separately) it would not be
simpler & more accurate to price each separately
according to an assumed specification.

29. This basically is the “elemental” approach, whereby
the building is split up it to a number of major
components, or elements, which can be easily
measured from sketch drawings & which are priced
separately; these elemental costs are added together
to give the total of the estimate. It is therefore possible
to compare the working drawings with the estimate by
considering each element in turn instead of only being
able to compare the whole building, & the cost can be
watched as the design develops.

30. 8000

15000
300

Specimen
300
3000
PLAN
1000 X
1000
Aluminium
glazed
window
1000 X 2100
Aluminium
glazed door
230 mm
wall
thicknes
s
ELEVATION

34. Functional Unit Method

The Quantity Surveyor has to predict the future
cost of some sort of projects without seen a sketch
drawing. Using the predetermined similar types of unit
rates he will predict the future cost.
Water tanks/ Water pumps - Using Literage
Roads - Mileage/ Kilo mate
Hotels - Rooms
Pavilions - No of users
Cinemas - Seats
Schools - Desks
Hospitals - Beds

35. Updating Predetermined Information

Whatever above method used when arriving
preliminary project estimates the Quantity Surveyor has to
modify his predetermined data considering the following.

1. Market conditions
2. Size, number of storeys, etc.
3. Specification level
4. Inclusions & exclusions
5. Services
6. Site & foundation conditions
7. Other factors

36. 1. Market conditions

This adjustment deals with the changes in building prices
& in tendering conditions between the time when the
previous job was priced & the anticipated date of tender for
the new project. There are various published indices of
building costs which will help the surveyor to calculate the
right allowance, & we will deal with these first.

2. Size, number of storeys, etc.

The new provincial block will have a larger plan area; this
will tend to reduce the proportion of external wall area to
floor area (assuming a similar plan shape) & hence should
reduce the cost per square meter a little.

37. 3. Specification level

The specifications will be roughly similar, but the architect
has decided that the cheep flooring used in the officers on
the London block was a mistake & wants to allow an extra
Rs.225 per m
2
for this. The client also wants Portland
stone facing instead of cast stone used on the previous
job.

4. Inclusions or exclusions

The client wants the office tenants to do their own
partitioning & decorations, whereas on the London job
these were provided by the building owner.

38. 5. Services

Services are the major part of a modern building, &
represent a large proportion of the cost. On a project of
any size there will most likely be consulting engineers for
heating, plumbing & electrical work, & they will normally
provide an estimate of the cost of the services for which
they are responsible.

6. Site & foundation conditions

Both sites are in congested city areas. The new provincial
job will probably required pile foundations, which must be
allowed for. Either the cost of pile foundations per square
metre can be obtained from a suitable analysis or a certain
no of piles.