No_4_December_1962 — Page 104

Building and Quantity Surveying

The Cost Check

BY J. E. COOKE, FRICS

The following paper was the last of a series on the subject of Cost Control at a residential course organised by the Quantity Surveying Branch of the War Office. It was published in the July issue of the 'Chartered Surveyor' by invitation of the RICS Cost Research Panel. Reproduction in 'The Hong Kong and Far East Builder' is by permission of the Royal Institution of Chartered Surveyors.

THE purpose of the Course was

to instruct architects, engineers and quantity surveyors in the prin- ciples of cost planning during the pre-contract stage of any job. In order to demonstrate how the prin ciples are applied in practice, cer- tain periods were set aside when, playing their respective roles, mem- bers of the Course (i) carried out examinations of various cost analyses, (ii) prepared cost plans and (iii) conducted cost checks, all on actual schemes.

The background of the Course was set against a process

process of operations as shown in Fig. 1. This shows the relationship of any cost control pro- cedure to an architect's method of

Brief

Investiga-

tion

Design

Working Drawings

Tender

Estimate and/ Cost Cost

Bills of or Cost Limit Plan Checking Quantities Fig. 1 Showing relationship of cost control procedure to the ar- chitect's normal method of translat ing client's requirements into draw- ings and specification.

translating his client's requirement into drawings and specification. From an examination of this background it will be seen that the procedure falls into three parts:

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1. The preparation of the estim- ate and consequent establish- ment of the Cost Limit;

2. The preparation of the Cost

Plan;

3. The process of Cost Check-

ing.

The need for cost control during the pre-contract stage stems mainly from the need of the client-−(a) to be given a balanced design for the amount of money he has available and (b) to have the tender amount equalling the first estimate.

The Estimate Cost Limit

The Estimate establishes the Cost Limit and the establishment of this limit is often as much a matter for the client as for the architect and quantity surveyor. For the limit may be that amount which a developer considers to be the maximum capital outlay compatible with a reasonable return, or it may be the most that is available to spend on a particular scheme. Furthermore, this estimate (or cost limit) is not necessarily an estimate of a proposed design solu- tion, calling for approximate quan- tities, because at the stage when it is needed there is. in fact, no design solution.

The Cost Plan

The Cost Limit having been es- tablished, it then becomes necessary to plan how it is proposed to distri- bute the available money amongst the elements making up the design solution. As balanced and reason- able a distribution as possible is aimed for, and this is achieved by the examination of cost analyses for other selected buildings. Thus, a Cost Pian is prepared and this serves the purpose of providing the neces- sary point of reference to which all checking during the design sequence needs to be made.

THE COST CHECK

Introduction

Having established the Cost Plan. we now enter the design phase. This phase, and the Cost Checking which goes along with it. is the effective phase during which actual control is exercised.

The object here is to see that the tender estimate and, no matter how 'good' a Cost Plan may be, the success of the whole operation will depend entirely on the Cost Check- ing process. How, then, is it to be done?

First of all. let us look briefly at

what goes on during the design

phase. The architect is faced with the difficult task of having to design the building to an overall cost limit. He will be designing the building in stages, and will need to know the possible cost of these stages as they are completed. He will submit rough drawings and specification notes to the quantity surveyor in order to get these costs, and this will allow him to modify his design, as it develops. so as to bring it within the planned overall cost. In other words. cost checks must be made periodically as the design proceeds. thus enabling the architect to modify and so con trol the cost of his design before he is committed to any one solution.

The Cost Checking process can now be defined as being the assess ment of the probable cost of the ar chitect's design, in steps, as it de velops. The 'checks' are made by the quantity surveyor. and the 'control is exercised by the architect. For the purpose of this paper a Cost: Check is defined as the check made on each separate complete element of the building.

Principles of Cost Checking

In Cost Checking two important points must always be borne in mind:

3 (i) The Cost Plan is the essential point of reference to which all Cost Checks must be referred. and

(i) The Cost Checks must be done on nothing more nor less than complete elements.

In fact these two points establish themselves as principles which must be worked to if the control which we THE HONG KONG & FAR EAST BUILDER VOLUME 17. NUMBER +