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    MTPDF6 - Module 6 Main PDF Lesson

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    The document discusses construction cost estimating and life-cycle cost analysis. It covers the process of forecasting costs to build a structure from commissioning through completion. There are five levels of cost estimates: order of magnitude to bid estimate. Estimates consider elements like materials, labor, equipment, and contingencies. Life-cycle cost analysis estimates future costs over the asset's entire lifespan, including phases from resource extraction to recycling. It helps choose designs that minimize overall ownership costs while meeting functional needs.

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    MTPDF6 - Module 6 Main PDF Lesson

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    EunnicePanaligan
    28 views45 pages
    The document discusses construction cost estimating and life-cycle cost analysis. It covers the process of forecasting costs to build a structure from commissioning through completion. There are five levels of cost estimates: order of magnitude to bid estimate. Estimates consider elements like materials, labor, equipment, and contingencies. Life-cycle cost analysis estimates future costs over the asset's entire lifespan, including phases from resource extraction to recycling. It helps choose designs that minimize overall ownership costs while meeting functional needs.

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    MTPDF6_ Module 6 Main PDF Lesson

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    The document discusses construction cost estimating and life-cycle cost analysis. It covers the process of forecasting costs to build a structure from commissioning through completion. There are five levels of cost estimates: order of magnitude to bid estimate. Estimates consider elements like materials, labor, equipment, and contingencies. Life-cycle cost analysis estimates future costs over the asset's entire lifespan, including phases from resource extraction to recycling. It helps choose designs that minimize overall ownership costs while meeting functional needs.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    28 views45 pages

    MTPDF6 - Module 6 Main PDF Lesson

    Uploaded by

    EunnicePanaligan
    The document discusses construction cost estimating and life-cycle cost analysis. It covers the process of forecasting costs to build a structure from commissioning through completion. There are five levels of cost estimates: order of magnitude to bid estimate. Estimates consider elements like materials, labor, equipment, and contingencies. Life-cycle cost analysis estimates future costs over the asset's entire lifespan, including phases from resource extraction to recycling. It helps choose designs that minimize overall ownership costs while meeting functional needs.

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    BUILDING DESIGN SYSTEM

    CE0017
    Prepared by: Engr. Mary Grace M. Ventanilla - Calilung
    FINANCIAL CONSIDERATIONS
    Module 6
    CHAPTER 1
    FUNDAMENTALS OF
    BUILDING COSTS
    Construction cost estimating is the process of
    forecasting the cost of building a physical structure.

    Project owners use cost estimates to determine a


    project’s scope and feasibility and to allocate budgets.
    1. Commissioning a Project 6. Signing the Contract
    2. Determining 7. Construction
    Requirements 8. Close – out
    3. Forming a Design Team 9. Completion
    4. Designing the Structure
    5. Bidding Based on Scope
    of Works
    Commissioning a Project
    Ø Commissioning is essentially a verification process that ensures a builder
    designs, constructs, and delivers a project according to the owner’s
    requirements.
    Determining Requirement
    Ø The first real step in constructing a project is a pre-design phase or
    planning phase.
    Forming a Design Team
    Ø The project owner contracts with an architect who will then select other
    specialized consultants to form a design team
    Designing the Structure
    Ø This step deals with the architect creating a series of designs.
    Bidding Based on the Scope of Work
    Ø Once the construction documents are finalized, they are released to
    contractors who wish to bid on the project
    Signing the Contract
    Ø Once the contractor has been selected, they execute a set of contract
    documents with the owner
    Ø Lumpsum
    Ø Unit Cost
    Construction
    Ø During the construction phase, the contractor oversees building in
    accordance with the construction documents.
    Close – Out
    Ø The contractor provides the architect with a document called the punch
    list
    Completion
    Ø After the contractor completes all the incomplete work detailed on the
    punch list, the architect performs a final inspection.
    FIVE LEVELS:
    1 – ORDER OF MAGNITUDE ESTIMATE
    2 – SCHEMATIC DESIGN ESTIMATE
    3 – DESIGN DEVELOPMENT ESTIMATE
    4 – CONSTRUCTION DOCUMENT ESTIMATE
    5 – BID ESTIMATE
    PRIMARY CATEGORIES
    Ø Design Estimates
    Ø These estimates, prepared during a project’s pre-design and design
    phases, start with an order of magnitude estimate, or screening estimate,
    which determines which construction methods and types are most
    feasible.
    Ø Bid Estimates
    Ø Contractors prepare bid estimates when bidding to construct the project
    Ø Control Estimates
    Ø Prepared after one signs a contractor agreement and before construction
    gets under way
    ELEMENTS OF
    CONSTRUCTION COST
    ESTIMATES: 8. Profits
    1. Quantity Take – off 9. Contingencies
    2. Labor Hour 10.Escalation
    3. Labor Rate 11.Bonds
    4. Material Prices 12.Capital Costs
    5. Equipment Cost 13.Operations and
    6. Subcontractor Quotes Maintenance Costs
    7. Indirect Costs 14.Variances
    QUANTITY TAKE – OFF
    Ø measures the materials and
    labor needed to complete a
    project
    LABOR HOUR
    Ø a unit of work that measures the output of one person
    working for one hour
    LABOR RATE
    Ø the amount per hour one pays to skilled craftsmen
    MATERIAL PRICES
    Ø cost of materials is prone to fluctuation based on market
    conditions
    EQUIPMENT COSTS
    Ø refer primarily to the cost of running, and possibly renting,
    heavy machinery, such as cement mixers and cranes
    SUBCONTRACTOR QUOTES
    Ø Most contractors will hire multiple specialist subcontractors
    to complete parts of the construction
    INDIRECT COSTS
    Ø Indirect costs are expenses not directly associated with
    construction work
    PROFITS
    Ø the contractor adds a margin on to the cost of completing
    the work
    CONTINGENCIES
    Ø an estimate will usually have a predetermined sum of
    money built in to account for added costs.
    ESCALATION
    Ø refers to the natural inflation of costs over time, and it’s
    especially vital to take into account for long-running
    projects
    BONDS
    Ø The bond functions as a kind of guarantee of delivery
    CAPITAL COSTS
    Ø costs are simply the costs associated with establishing a
    facility
    OPERATIONS AND MAINTENANCE COSTS
    Ø More a concern for the owner than the contractor, one
    accounts for operations and maintenance costs during the
    design phase.
    VARIANCES
    Ø Owners will often allocate construction budgets that are
    larger than cost estimates because even good, thorough
    cost estimates have a tendency to underestimate actual
    construction costs.
    CHAPTER 2
    LIFE – CYCLE COSTS
    Life cycle costing is basically an estimation of
    the future costs of assets.
    (Emekci & Tanyer, 2018)
    Ø Life cycle cost analysis is ideal for estimating the
    overall cost of a project’s alternatives.
    Ø It is also used to choose the right design to ensure
    that the chosen alternative will offer a lower overall
    ownership cost that is consistent with function and
    quality.
    Ø LCC can be defined as the method for assessing the
    economic value of decisions of a design project.
    A life cycle cost is not just used in construction. It’s
    something that is used in all sorts of projects because of
    how it determines current and future costs. This is why
    it’s important to note the exact features of a building’s
    life cycle cost.
    1. Resource Extraction
    2. Manufacturing
    3. On – site Construction
    4. Occupancy and Maintenance
    5. Demolition
    6. Recycling, Reuse, Disposal
    RESOURCE EXTRACTION

    Ø A company will look at where the actual resources for the


    building should come from
    MANUFACTURING

    Ø The actual manufacturing of the materials needed for the


    project will be done
    ON – SITE CONSTRUCTION

    Ø This is the main component of a construction company


    and is the most looked at area of the entire project
    OCCUPANCY & MAINTENANCE

    Ø The occupancy and maintenance of a project should be


    just as heavily looked at as everything else.
    Ø
    DEMOLITION

    Ø Demolition is the key factor in ending the life cycle of a


    building
    RECYCLING, REUSE, DISPOSAL

    Ø After demolition occurs, the recycling, reusability, and how


    disposable the resources should be determined.
    ü Life cycle cost analysis can be used to assess
    different infrastructural sectors such as rail and urban
    transport, airports, highways, and ITS, as well as ports
    and industrial infrastructure

    ü The other thing that is important in infrastructural


    development is operating expense,
    ü Replacement costs are incurred every cycle based on
    the predefined age of replacement for different assets
    and the manufacturer’s preference.

    ü Another important element of LCCA is disposal cost


    Whole Life Cost (WLC)

    Non-construction Cost, Externalities,


    Income Life Cycle Cost (LCC)

    Maintenance and
    Investment cost renovation cost Operating cost End of life cost

    Reference: Schneiderova-Heralova, R. (2018)

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