Cost Management of Construction, Design Economics and Cost Planning

This week’s question focuses on the questions relating to the Cost Management of Construction (T010) competency although they could also be asked under Design Economics and Cost Planning (T022).

If you recall from previous articles, assessors are trained to ask questions that ascertain candidate’s progress against the three APC competency levels:

Level 1 knowledge and understanding (‘knowing’)

Level 2 application of knowledge and understanding (‘doing’)

Level 3 reasoned advice and depth of technical knowledge (‘advising’)

The following questions are typical of those that could be reasonably expected at Final Assessment.

Level 1 – What are the sources of cost data that are often used by surveyors when preparing estimates?

The candidate would be expected to know most of the following:

• Historic cost information from previous projects undertaken by the candidate’s company

• Manufacturer and supplier literature


• Cost models and cost data published in industry magazines (such as Building!)

• Price books

Level 2 – What in formation would typically accompany a budget estimate for a construction project?

The candidate should list and describe some of the following:

• A covering letter

• Executive summary

• Specification notes

• Assumptions

• Exclusions

• Cash flow information

• Drawings and other information upon which the estimate is based

• A list of value enhancing alternative suggestions or options

• A risk register

• Etc

Level 3 – It is 5.30pm on a Friday afternoon. A client phones you and says that they are on their way to a meeting to buy a plot of land. She wants to know “how much hotels cost to build?” in order to calculate the price to pay for the land. She wishes to have your advice within the next hour. How do you advise the client?

The assessors would look for a broad understanding that demonstrates the appropriate level of competency. The candidate should clearly explain that their company could be liable to the client for any information that is provided. They would expect the candidate to convey the difficulty in providing accurate information in such a situation and explore the options to gain more time.

The candidate should then describe a logical approach which could be along the following lines:

• Try and contact a more senior member of staff or discuss with senior colleagues

• Request further information from the client regarding:

o Site location

o Site condition

o Development area (m2) / number of bedrooms

o Quality (star rating)

o Timescale

o Site access and service provision

o Etc

• Based on £/m2 then calculate a construction cost based on historic cost information (described above). Make allowance for external areas.

• Provide a range of costs and be clear as to assumptions and exclusions. State a level of accuracy.

• Confirm conversation in writing.