Pre-Contract Cost Planning and Control 施工合約前的成本計畫及控制

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Note

18 Mar 2021: 9 sections added or revised. Punctuation style revised. 

13 Mar 2020: Usual payment terms added.

26 Feb 2020: Minor adjustments made.

20 Dec 2014: Moved from wiki.

Cost geometry
造價幾何

  1. Note the effect of different site areas for the same building:
    • ​​​​​​​​​​​​​​​​​​​​​
  2. Note the effect of doubling the number of storeys:
  3. Note the effect of elongating the building without increasing the floor area:
  4. Unit cost per floor area:
    • Construction costs are usually compared based on unit cost per floor area.
    • The above suggests that the unit cost per floor area cannot be a constant for the same type of buildings of different forms and shapes.
  5. Impact on design:
    • Whether a building is more economical or expensive than the other for the same floor area and type would primarily depend on the ratios of the numbers, lengths, areas and volumes of the building components to the floor areas, and then on the materials and standards.

Most significant cost parameters
最主要造價參數

  1. Appreciate which cost portions should bear more direct proportions to each parameter:
    瞭解那部份的成本內容與那個造價參數有較直接的比例關係:
    • ​​​​​​​​​​​​​
  2. Most significant cost parameters:
    • Floor area (above ground + below ground)

      樓面面積

    • Ground area (= roof area) 

      地面面積 (=屋面面積)

    • Transfer structure area

      轉換結構面積

    • External elevation area 

      外立面面積

    • Basement screen wall area or more effectively basement volume of excavation

      地下室外牆面積或較有效的地下室土方體積

    • Site area

      工地面積

    • External area (site area - ground area) 

      室外面積

    • Number of equipment 

      台數

    • Refrigeration tonnage 

      冷噸

    • Other elemental quantities.

      其他功能分部工程量

  3. Using this small number of cost parameters can enable quick cost estimating.
  4. The values (quantities) of those parameters which will be used extensively throughout a cost estimate should be accurately measured, unlike the general message here that the cost estimates should be approximate.

(Last two points added, 18 Mar 2021)

Principal cost management tasks during the Pre-Contract Stage
施工合約前的主要工作

  1. Prepare cost estimates or cost plans.
    編製估算概算
  2. Prepare cash flow tables.
    編製資金流量表
  3. Attend design meetings.
    參與設計會議
  4. Monitor the design.
    設計監控
  5. Adjust the cost estimates and reconciling.
    估算概算調整及檢討
  6. Compare alternatives.
    替代方案的比較

(Estimate, plan, update and control.)

Need for pre-construction cost estimates
為何需要概算

  1. Know the costs for investment decisions:
    知道成本造價以作投資決定: 
    • Calculate land bid price
      計算買地投標價
    • Calculate acceptable rental
      計算可接受的租金
    • Evaluate the feasibility of the investment.
      評估投資的可行性
  2. Establish a project (development) budget.
    確定發展項目的投資預算
  3. Obtain funding.
    獲取撥款
  4. Borrow money from the bank.
    向銀行貸款
  5. Formulate a design brief which defines the scope and standard of the project.
    制定設計任務書,說明發展項目的範圍及標準
  6. Monitor the design development to control the costs within budget.
    ​​​​​​​監控設計的深化以控制不超出投資預算
  7. Estimate fees.
    估算顧問費

Best time to plan and control the costs
造價控制的最佳時機

  1. As early as possible during the development process.
    在項目發展階段中越早越好
  2. Better chances to make design changes to find a better solution.
    較有機會修改設計取得更好的方案
  3. To reduce abortive design costs.
    減少設計返工

Ways to calculate the cost estimates

  1. Estimates should be done using expedient methods, approximations and shortcuts to reduce estimating time and costs in order to afford more estimates:
    • By unit cost per floor area / length / number estimates
    • By measuring the most significant cost parameters
    • By measuring elemental quantities
    • By measuring approximate quantities
    • By pricing the bills of quantities ready for issuance or already issued for tendering.

(Section added, 18 Mar 2011)

​​​​​​​​​​​​​​Estimating mottos
四字真言

  1. From big to small.

    由大到小

  2. From rough to fine. 

    從粗到細

  3. Focusing on the important.

    重點出擊

  4. Making bold assumptions.

    大膽假設

  5. Verifying carefully.

    小心求証

  6. Comparing with the unlike.

    觸類旁通

  7. Conducting self-checking.

    自我覆核

  8. Reconciling with the previous. 

    瞻前顧後

  9. Empathizing with the Client.

    ​​​​​​​設身處地​​​​​​

Different names of pre-construction cost estimates
概算的不同名稱

  1. Rough Indication of Costs ("RIC").
    大約估算
  2. Preliminary Indication of Costs.
    初步估算指標
  3. Preliminary Cost Estimates.
    概算
  4. Elemental Cost Estimates.
    功能分部概算
  5. Cost Plans.
    成本計畫
  6. Cost Models (An American term).
    成本模型 (美式用詞)
  7. Pre-tender Estimates.
    標底

Cost estimates, cost plans and budgets

  1. A cost estimate is a forecast of the probable ultimate cost based on the current design.
  2. It is required to be done throughout the pre-construction stages as well as the construction stage until the estimated costs become fixed prices.
  3. A cost plan is a detailed cost framework for controlling future design.
  4. A budget is the maximum sum a Developer is willing and able to spend on a project.
  5. A cost estimate for now, if satisfactory and approved, will become the cost plan for the future design.
  6. Approximate estimates should be done using expedient methods, approximations and shortcuts to reduce estimating time and costs in order to afford more estimates.
  7. A pre-tender estimate is no longer an approximate estimate and is prepared by pricing the bills of quantities ready for issuance or already issued for tendering.
  8. A logical sequence is like this:
    • Rough Indication of Costs => Detailed Cost Estimate => Cost Plan / Budgetary Estimate.
  9. Rough indication of costs ("RIC"):
    • It may be just based on unit cost / number or unit cost / floor area or unit cost / other functional unit to be used in the feasibility study or early design stage based on some ideas or sketch designs.
  10. Detailed cost estimate:
    • It is a more detailed cost estimate prepared when the design is more developed.
    • Some consultants call it "Preliminary Cost Estimate", and some call it "Cost Plan".
    • HK ArchSD still calls it "Rough Indication of Costs" in spite of the level of details.
    • It may become the Budgetary Estimate if approved.
  11. Cost plan:
    • It sets out the portions of the total budget allocated to different parts of the construction so as to serve as the cost limits to the relevant parts of the construction.
    • It may just be based on some interpolation from the cost data of other projects or may be based on some detailed cost estimate specifically prepared for the relevant design.

Construction floor area and gross floor area in Hong Kong

  1. For costing, leasing and sales of buildings and related land, people usually have to refer to unit cost or price per floor area of the buildings.
  2. However, there are many types of floor areas being defined for different purposes in Hong Kong or other places outside Hong Kong. An understanding of their possible differences is important.
  3. Quantity Surveyors measure the construction floor area (CFA) in order to estimate the total construction cost of a building.
  4. Lands leased by the Government in Hong Kong are subject to limitation on the gross floor areas (lease GFA) of the buildings which may be built on the land. Some of the construction floor area is not accountable for the lease GFA. The Lands Department is responsible for the control. Read the Lands Department's Practice Note on Accountable and Non-Accountable GFA under Lease at https://www.landsd.gov.hk/en/images/doc/1998_1A_text.pdf.
  5. Building plans have to be submitted to the Buildings Department for approval and consent before construction. The gross floor areas (GFA) are also controlled by the Buildings Regulations. Read the Buildings Department's Practice Note on Calculation of Gross Floor Area and Non-accountable Gross Floor Area at https://www.bd.gov.hk/doc/en/resources/codes-and-references/practice-notes-and-circular-letters/pnap/APP/APP002.pdf.
  6. The Lands Department's Practice Note says while the Lands Department is usually prepared to follow the Buildings Department's ruling in exemptions from GFA calculations, it reserves its right and absolute discretion to do otherwise in individual cases.
  7. There are further complications due to the use of saleable area for residential properties. See Cap. 621 Residential Properties (First-hand Sales) Ordinance at https://www.elegislation.gov.hk/hk/cap621.

International Property Measurement Standards

  1. The various International Property Measurement Standards at https://ipmsc.org/standards/ intend to unify the rules of measurement of various kinds of floor areas for different types of buildings. IPMS 1 (gross external floor area) and IPMS 2 (gross internal floor area) are referred to by ICMS. They should be the same for all types of buildings, but because of the different types of publications of the various IPMS standards, the text may vary. Read the latest standards to appreciate the diagrammatic illustration. CFA in Hong Kong is close to IPMS 1 with one exception: accessible rooftop terraces are included in IPMS 1 but not in Hong Kong CFA.

Need for historical cost analyses

  1. Benchmark new projects.
  2. Provide cost data for new estimates.
  3. Provide cost parameters for new estimates​​​​​​​.​​​​​​​​​​​​​​​

Cost analyses

(Section revised, 18 Mar 2021)

  1. A cost analysis analyses the awarded or final prices of a project and re-classify the costs following the same classification used for the detailed cost estimates or cost plans.
  2.  When classified in elemental format, the cost of each element or sub-element is summed up into a single line item. The cost is called “elemental cost” in Hong Kong.
  3. A single representative quantity is measured for that line item. The single quantity is called "elemental quantity" in Hong Kong. “representative” means that the quantity can best represent the cost changes in case of quantity changes.
  4. The cost of that cost item is then divided by the elemental quantity to give a single all-inclusive rate. The single all-inclusive rate is called "elemental unit rate" in Hong Kong. That means, elemental cost / elemental quantity = elemental unit rate, or elemental quantity x elemental unit cost = element cost, depending on the order of presenting the columns in table form.
  5. The elemental unit rates are very useful when the cost of a new project is required to be estimated before any detailed design is available. 
  6. Elemental quantities can be measured for the new project and priced at elemental unit rates of the reference projects.
  7. There are not too many items of elemental quantities to be measured. The cost estimating process can therefore be very fast.
  8. Of course, the elemental unit rates may not be directly applicable to the new project. It should at least be adjusted for the changes in the price levels from the times it was applicable to the reference project to the time of the new project, and then for other changed factors.
  9. A cost analysis should also contains quantity ratios or factors such as:
    • elevation area : floor area
    • concrete volume per floor area
    • formwork area per concrete volume or floor area
    • rebar weight per concrete volume or floor area
    • etc.  
  10. These quantity ratios can serve as useful references when estimating the costs of new projects.
  11. Apart from using the data in a cost analysis to estimate the cost of a new project in the absence of detailed design, the data can also be used to benchmark the cost of a new project after a more detailed cost estimate is done to ensure that the new project would not go out of order.
  12. Hong Kong Government uses this technique to control the costs of new project at the design stage.

Changes in cost and price levels

  1. Due to changes in the market conditions, the unit rates for exactly the same description of work may change over time.

  2. Unit rates applicable in the past would need to be adjusted to the current level.

  3. Tender price or cost indices are therefore prepared to provide the adjustment factors.

  4. Tender price indices and cost indices can fluctuate at different rates because price = cost + profit, and the price may increase less than the cost increase in order to secure projects or may increase more in case the market is full.

(Section revised, 18 Mar 2021)

Different methods of cost estimating
計算概算的方法

  1. Different methods:
    • Unit method (common)
    • Superficial method or area method (common)
    • Cubic method (seldom used for buildings)
    • Storey enclosure method (seldom used now)
    • Elemental quantity method (common)
    • Approximate quantity method (common).
  2. Unit method:
    按功能單元個數計算: 
    • The estimated cost of a building is calculated based on the number of functional units provided by the building x unit cost per functional unit.
    • ICMS (as introduced below) has suggested the following functional units for buildings: number of occupants | number of bedrooms | number of hospital beds | number of hotel rooms | number of car parking spaces | number of classrooms | number of students | number of passengers | number of boarding gates.
    • The unit method is a crude method serving as an early indication of the probable order of cost of the average building of the relevant type.
    • It is not useful for forecasting with high degree of accuracy the costs of newly proposed buildings of the same type because their designs can be very different.
    • However, it may be used by clients and in particular government departments to serve as a cost yardstick controlling the budget of newly proposed projects.
    • It is still also useful to serve a check that a unit cost per floor area may sound reasonable but, when expressed in unit cost per functional unit, the unit cost can be out of order because of excessive floor area per functional unit.  
  3. Superficial method or area method: 
    按樓面積計算: 
    • The estimated cost of a building is calculated based on the floor area of the building x unit cost per floor area.
    • This is the most commonly used method, possibly because the sales and rental prices are also expressed in unit cost per floor area.
    • Note however that there are many definitions of "floor area". The same definition should be consistently applied.
  4. Cubic method (seldom used for buildings):
    按樓體積計算(現少用): 
    • The estimated cost of a building is calculated based on the volume of the building x unit cost per volume.
    • In theory, the volume can take care of the different storey heights of the building.
    • This is not commonly used probably because the floor areas are more readily available, and calculating the volumes would mean a further step to be done.
    • The cubic method may be useful for site formation works or civil engineering works involving massive volume of work.
  5. Storey enclosure method (seldom used now): 
    按樓板及外殼面積加權計算(現少用): 

    In essence, the estimated cost of a building is calculated based on the total of the weighted areas of bottom slabs (basement or ground), suspended floor slabs, roof slabs, and walls below and above ground x unit cost per total weighted area.

    • Each type of slabs or walls are given different fixed weightings to reflect their relative ratios of costs.
    • The calculation is much more complicated than the superficial method or the cubic method.
    • With so many varieties of construction components and materials, whether the fixed weightings can truly reflect the relative ratios of costs is doubtful.
    • This method is seldom used these days.
  6. Elemental quantity method: 
    按功能分部工程量計算: 
    • The building cost is classified into different elements ("Sections" in the following example).
    • Each element is represented by an appropriate elemental quantity.
    • The estimated cost of a building is calculated based on the total of (elemental quantity x elemental unit rate).
    • It takes into account the different forms, provisions and standard of the proposed new building better than the average unit cost per floor area.
    • It is therefore a more accurate method than the superficial method.
    • However, while the elemental quantities are simple to measure, the elemental unit rates would rely on reliable cost data from other projects or may need careful build-ups.
    • This method should only be used at the early stage of design.
  7. Approximate quantity method:
    按分項大約工程量計算: 
    • The estimated cost of a building is calculated based on the total of (approximate quantity of major item of work x unit rate per quantity of major item of work inclusive of costs of minor items).
    • As the design is more developed, it is possible to measure the work constituting the building more accurately and apply more appropriate unit rates relevant to the materials and standard chosen.
    • The quantities are approximate to reduce the time to measure so that a quicker cost estimate can be produced to reflect the updated cost of the design and enable any subsequent measures to control any unexpected costly design.
  8. Condensed elemental method using the most significant cost parameters:
    • Users of the elemental quantity method may find that many elemental quantities are the same for different elements and can in fact be reduced into the most significant cost parameters listed above.
    • The estimated cost of a building is calculated based on the total of (quantity of the above cost parameter x composite unit rate per quantity of cost parameter).
    • This can provide a quick and equally reliable cost estimate though not as detailed as the elemental quantity cost estimate.
  9. Pre-tender estimate:
    按工程量清單計算標底: 

    • A pre-tender estimate is no longer an approximate cost estimate and is prepared by pricing the bills of quantities ready for issuance or already issued for tendering.

Elemental cost classifications

(Section added, 18 Mar 2021)

  1. Both the elemental quantity method and approximate quantity method adopt an elemental cost classification, which divides the costs of a construction project into various parts ("elements") each serving a specific function or common purpose such that the costs of alternatives serving the same function or purpose can be compared, evaluated and selected irrespective of their design, specification, materials or construction.

  2. Classifying the costs of a building (or other construction) into elements would facilitate: ​

    • Comparison of the costs of different design options serving the same elemental function 

    • Comparison with costs of other projects by elements

    • Rationalizing the budget allocation between different elements for better use 

    • Quicker estimating based on elemental quantities which are easier to measure 

    • Analysis of data for different projects on the same basis and classification.

  3. Different QS practices and ArchSD have different elemental classifications.

  4. ArchSD adopts the following Project Element Cost Model as described in the Standard Method of Measurement for Building Elements 2020 Edition published by the Architectural Services Department ((https://www.archsd.gov.hk/media/426052/asdsmmbe_2020.pdf)):

  5. Many other places outside Hong Kong also have their own elemental cost classification systems, e.g.:

International Construction Measurement Standards (ICMS)

(Section added, 18 Mar 2021)

  1. International Construction Measurement Standards, 2nd Edition (https://icms-coalition.org/) is intended to standardise the elemental cost classification systems globally.
  2.  It covers also civil engineering works and life cycle costs.
  3. "elements" is called "Cost Groups" and "Cost Sub-Groups" in ICMS.
  4. Example Cost Code: 01.2.03.030 = Buildings: Construction Costs: Structure: Frames and slabs (above top of ground floor slabs)

Level 1: Projects and Sub-Projects

  • 2-digit cost code

01.

Buildings

08.

Pipelines

02.

Roads, runways and motorways

09.

Wells and boreholes

03.

Railways

10.

Power-generating plants

04.

Bridges

11.

Chemical plants

05.

Tunnels

12.

Refineries

06.

Waste water treatment works

13.

Dams and reservoirs

07.

Water treatment works

14.

Mines and quarries

Level 2: Cost Categories

  • 1-digit cost code

Cost code

Description

 

Life Cycle Cost (CC plus NPV of RC, OC, MC, and EC)

1.

Acquisition Costs (AC) [Part of Non- Construction Costs]

2.

Construction Costs (CC)

3.

Renewal Costs (RC)

4.

Operation Costs (OC)

5.

Maintenance Costs (MC)

6.

End of Life Costs (EC)

Development budget

  • For new developments, the total of the Acquisition Costs and Construction Costs represents the capital cost of development or development budgetary cost.

Acquisition Costs

  • 2-digit cost code for Cost Groups and 3-digit cost code for Cost Sub-Groups

Cost code

Description

1.

Level 2 Acquisition Costs (AC) (each Cost Sub-Group includes Risks Allowances)

 

Cost Group (Level 3)

 

Cost Sub-Group (Level 4)

 

 

01.

Site acquisition

01.010

Costs and premium required to procure site

01.020

Compensation to existing occupiers

01.030

Demolition, removal and modification of existing properties by way of payment to existing owners instead of carrying out physical work

01.040

Contributions for the preservation of heritage, culture and environment

01.050

Related fees to agents, lawyers, and the like

01.060

Related taxes and statutory charges

02.

Administrative, finance, legal and marketing expenses

02.010

Client’s general office overheads

02.020

Client’s project-specific administrative expenses:

010 – in-house project management and design team

020 – supporting project staff

030 – project office venue, furniture and equipment if not included in Constructor’s preliminaries | site overheads

040 – stores and workshops

050 – safety and insurances

060 – staff training

070 – accommodation and travelling expenses for in-house team and external parties

02.030

Interest and finance costs

02.040

Legal expenses

02.050

Accounting expenses

02.060

Sales, leasing, marketing, advertising and promotional expenses

02.070

Taxes and statutory charges related to sales and lease

02.080

License and permit charges for operation and use

Construction | Renewal | Maintenance Costs of Buildings

  • 2-digit cost code for Cost Groups and 3-digit cost code for Cost Sub-Groups

Cost code

Description

2.

Level 2 Cost Category - Construction Costs (CC)

3.

Level 2 Cost Category - Renewal Costs (RC)

5.

Level 2 Cost Category - Maintenance Costs (MC)

 

(CC, RC, and MC share the same Cost Groups below, so far as applicable. Those separated by ‘|’ in [ ] are respective alternative terms.)

 

Cost Group (Level 3)

 

Cost Sub-Group (Level 4)

 

 

01.

Demolition, site preparation and formation

01.010

Site survey and ground investigation

01.020

Environmental treatment

01.030

Sampling of hazardous or useful materials or conditions

01.040

Temporary fencing

01.050

Demolition of existing buildings and support to adjacent structures

01.060

Site surface clearance (clearing, grubbing, topsoil stripping, tree felling, minor earthwork, removal)

01.070

Tree transplant

01.080

Site formation and slope treatment

01.090

Temporary surface drainage and dewatering

01.100

Temporary protection, diversion and relocation of public utilities

01.110

Erosion control

02.

Substructure

02.010

Foundation piling and underpinning:

010 – mobilisation and demobilisation

020 – trial piles and caisson

030 – permanent piles and caisson

040 – pile and caisson testing

050 – underpinning

02.020

Foundations up to top of lowest floor slabs:

010 – excavation and disposal

020 – lateral supports

030 – raft footings, pile caps, column bases, wall footings, strap beams, tie beams

040 – substructure walls and columns

050 – lowest floor slabs and beams (excluding basement bottom slabs)

060 – lift pits

070 – composite or prefabricated work

02.030

Basement sides and bottom:

010 – excavation and disposal

020 – lateral supports

030 – bottom slabs and blinding

040 – sides

050 – vertical waterproof tanking, drainage blanket, drains and skin wall

060 – horizontal waterproof tanking, drainage blanket, drains and topping slab

070 – insulation

080 – lift pits, sump pits, sleeves

090 – composite or prefabricated work

03.

Structure

03.010

Structural removal and alterations

03.020

Basement suspended floors (up to top of ground floor slabs):

010 – structural walls and columns

020 – beams and slabs

030 – staircases

03.030

Frames and slabs (above top of ground floor slabs):

010 – structural walls and columns

020 – upper floor beams and slabs

030 – roof beams and slabs

040 – staircases

050 – fireproofing to steel structure

03.040

Tanks, pools, sundries

03.050

Composite or prefabricated work

04.

Architectural works | Non-structural works

04.010

Non-structural removal and alterations

04.020

External elevations:

010 – non-structural external walls and features

020 – external wall finishes except cladding

030 – facade cladding and curtain walls

040 – external windows

050 – external doors

060 – external shop fronts

070 – roller shutters and fire shutters

04.030

Roof finishes, skylights and landscaping (including waterproofing and insulation):

010 – roof finishes

020 – skylights

030 – other roof features

040 – roof landscaping (hard and soft)

04.040

Internal divisions:

010 – non-structural internal walls and partitions

020 – shop fronts

030 – toilet cubicles

040 – moveable partitions

050 – cold rooms

060 – internal doors

070 – internal windows

080 – roller shutters and fire shutters

090 – sundry concrete work

04.050

Fittings and sundries:

010 – balustrades, railings and handrails

020 – staircases and catwalk not forming part of the structure, cat ladders

030 – cabinets, cupboards, shelves, counters, benches, notice boards, blackboards

040 – exit signs, directory signs

050 – window and door dressings

060 – decorative features

070 – interior landscaping

080 – access panels, fire service cabinets

090 – sundries

04.060

Finishes under cover:

010 – floor finishes (internal and external)

020 – internal wall finishes and cladding

030 – ceiling finishes and false ceilings (internal or external)

04.070

Builder’s work in connection with services:

010 – plinth, bases

020 – fire-proofing enclosure

030 – hoisting beams, lift pit separation screens, lift shaft separator beams

040 – suspended manholes

050 – cable trenches, trench covers

060 – sleeves, openings and the like not allowed for in ‘Fittings and sundries’

04.080

Composite or prefabricated work

05.

Services and equipment

05.010

Heating, ventilating and air-conditioning systems/air conditioners:

010 – seawater system

020 – cooling water system

030 – chilled water system

040 – heating water system

050 – steam and condensate system

060 – fuel oil system

070 – water treatment

080 – air handling and distribution system

090 – condensate drain system

100 – unitary air-conditioning system

110 – mechanical ventilation system

120 – kitchen ventilation system

130 – fume and smoke extraction system

140 – anaesthetic gas-extraction system

150 – window and split-type air conditioners

160 – air-curtains

170 – fans

180 – related electrical and control systems

190 – submissions, testing and commissioning

05.020

Electrical services:

010 – high-voltage transformers and switchboards

020 – incoming mains, low-voltage transformers and switchboards

030 – mains and submains

040 – standby system

050 – lighting and power

060 – uninterruptible power supply

070 – electric underfloor heating

080 – local electrical heating units

090 – earthing/lightning protection and bonding

100 – submissions, testing and commissioning

05.030

Fitting out lighting fittings

05.040

Extra low voltage electrical services:

010 – information and communications technology system

020 – staff paging/location

030 – public address system

040 – building automation

050 – security and alarm

060 – close circuit television

070 – communal aerial broadcast distribution and the like

080 – submissions, testing and commissioning

05.050

Water supply and drainage above ground or inside basement:

010 – cold water supply

020 – hot water supply

030 – flushing water supply

040 – grey water supply

050 – cleansing water supply

060 – irrigation water supply

070 – rainwater disposal

080 – soil and waste disposal

090 – planter drainage disposal

100 – kitchen drainage disposal

110 – related electrical and control systems

120 – submissions, testing and commissioning

05.060

Supply of sanitary fittings and fixtures (installation included in ‘Water supply and above ground drainage’ unless not separable from costs of ‘Fittings and sundries’)

05.070

Disposal systems:

010 – refuse

020 – laboratory waste

030 – industrial waste

040 – incinerator

050 – submissions, testing and commissioning

05.080

Fire services:

010 – fire hydrant and hose reel system

020 – wet risers

030 – sprinkler system

040 – deluge system

050 – gaseous extinguishing system

060 – foam extinguishing system

070 – audio/visual advisory system

080 – automatic fire alarm and detection system

090 – portable hand-operated appliances and sundries

100 – related electrical and control systems

110 – submissions, testing and commissioning

05.090

Gas services:

010 – coal gas

020 – natural gas

030 – liquid petroleum gas

040 – medical gas/laboratory gas

050 – industrial gas/compressed air/instrument air

060 – vacuum

070 – steam

080 – submissions, testing and commissioning

05.100

Movement systems:

010 – lifts | elevators

020 – platform lifts

030 – escalators

040 – travellators | moving walkways

050 – conveyors

060 – submissions, testing and commissioning

05.110

Gondolas

05.120

Turntables

05.130

Generators

05.140

Energy-saving features

05.150

Water and waste water treatment equipment

05.160

Fountains, pools and filtration plant

05.170

Powered building signage

05.175

Audio/visual entertainment system

05.180

Kitchen equipment

05.190

Cold room equipment

05.200

Laboratory equipment

05.210

Medical equipment

05.220

Hotel equipment

05.230

Car park or entrances access control

05.240

Domestic appliances

05.250

Other specialist services

05.260

Builder’s profit and attendance on services

06.

Surface and underground drainage

06.010

Surface water drainage

06.020

Storm water drainage

06.030

Foul and waste water drainage

06.040

Drainage disconnections and connections

06.050

CCTV inspection of existing or new drains

06.060

Buried Process Pipe

07.

External and ancillary works

07.010

Permanent retaining structures

07.020

Site enclosures and divisions

07.030

Ancillary structures

07.040

Roads and paving

07.050

Landscaping (hard and soft)

07.060

Fittings and equipment

07.070

External services:

010 – water supply

020 – gas supply

030 – power supply

040 – communications supply

050 – external lighting

060 – utility disconnections and connections

08.

Preliminaries | Constructors’ site overheads | general requirements

08.010

Construction management including site management staff and support labour

08.020

Temporary access roads and storage areas, traffic management and diversion (at the Constructors’ discretion)

08.030

Temporary site fencing and securities

08.040

Commonly shared construction plant

08.050

Commonly shared scaffolding

08.060

Other temporary facilities and services

08.070

Technology and communications: telephone, broadband, hardware, software

08.080

Constructor’s submissions, reports and as-built documentation

08.090

Quality monitoring, recording and inspections

08.100

Safety, health and environmental management

08.110

Insurances, bonds, guarantees and warranties

08.120

Constructor’s statutory fees and charges

08.130

Testing and commissioning

09.

Risk Allowances

09.010

Design development allowance

09.020

Construction contingencies

09.030

Price Level adjustments:

010 – until tendering

020 – during construction

09.040

Exchange rate fluctuation adjustments

10.

Taxes and Levies

10.010

Paid by the Constructor

10.020

Paid by the Client in relation to the construction contract payments

11.

Work and utilities off-site (including related risk allowances, taxes and levies)

11.010

Connections to, diversion of and capacity enhancement of public utility mains or sources off-site up to mains connections on-site:

010 – electricity

020 – transformers

030 – water

040 – sewer

050 – gas

060 – telecommunications

11.020

Public access roads and footpaths

12.

Post-completion loose furniture, fittings and equipment (including related risk allowances, taxes and levies)

12.010

Production, process, operating and loose furniture, furnishing and equipment not normally provided before completion of construction

13.

Construction-related consultants and supervision (including related risk allowances, taxes and levies)

13.010

Consultants’ fees and reimbursable:

010 – architects (architectural, landscape, interior design, technical, etc.)

020 – engineers (geotechnical, civil, structural, mechanical, electrical and plumbing, technical, etc.)

030 – project managers

040 – surveyors (quantity surveying, land surveying, building surveying, cost engineering, etc.)

050 – specialist consultants (environmental, traffic, acoustic, facade, BIM, etc.)

060 – value management studies

13.020

Charges and levies payable to statutory bodies or their appointed agencies (in connection with planning, design, tender and contract approvals, supervision and acceptance inspections)

13.030

Site supervision charges (including their accommodation and travels)

13.040

Payments to testing authorities or laboratories

Construction | Renewal | Maintenance Costs of Civil Engineering Works

  • 2-digit cost code for Cost Groups and 3-digit cost code for Cost Sub-Groups

Cost code

Description

2.

Level 2 Cost Category - Construction Costs (CC)

3.

Level 2 Cost Category - Renewal Costs (RC)

5.

Level 2 Cost Category - Maintenance Costs (MC)

 

(CC, RC, and MC share the same Cost Groups below, so far as applicable. Those separated by ‘|’ in [ ] are respective alternative terms.)

 

Cost Group (Level 3)

 

Cost Sub-Group (Level 4)

 

 

01.

Demolition, site preparation and formation

01.010

Site survey and ground investigation

01.020

Environmental treatment

01.030

Sampling of hazardous or useful materials or conditions

01.040

Temporary fencing

01.050

Demolition of existing structures and support to adjacent structures

01.060

Site surface clearance (clearing, grubbing, topsoil stripping, tree felling, minor earthwork, removal)

01.070

Tree transplant

01.080

General site formation and slope treatment

01.090

Temporary surface drainage and dewatering

01.100

Temporary access roads and storage areas (provided under an advance contract)

01.110

Temporary protection, diversion and relocation of public utilities

01.120

Erosion control

02.

Substructure

02.010

Embankments/cuttings

02.020

Excavation, disposal and lateral supports (specifically to receive any substructure construction but excluding general site formation and slope treatment)

02.030

Trenching

02.040

Drilling/boring

02.050

Piling/anchoring

02.060

Structural backfill/ground remediation

02.070

Earth-retaining structures

02.080

Abutments/wing walls

02.090

Pile caps/footings/bases (nearest to the ground level or water level if constructed in water)

02.100

Sub-base to pavements and rail track structures

02.110

Bases to supports for tanks, pipes, well heads and the like

02.120

Beds and surrounds to underground pipes

03.

Structure

03.010

Piers and towers

03.020

Suspension system

03.030

Decks

03.040

Bearings

03.050

Tunnel lining

03.060

Road/track base

03.070

Pavement

03.080

Service roads and approaches

03.090

Parapets/edge treatment

03.100

Main structures

03.110

Tanks, rigs, storage containers and the like

03.120

Supports for tanks, pipes and the like

03.130

Civil pipework

03.140

Valves and fittings

04.

Non-structural works

04.010

Non-structural removal and alterations

04.020

Non-structural construction

04.030

Running surface

04.040

Signage, markings and the like

04.050

Gantries and the like

04.060

Safety facilities

04.070

Barriers/rails and means of access

04.080

Special equipment and fittings

04.090

Interior landscaping

04.100

Builders’ work in connection with services

05.

Services and equipment

05.010

Mechanical systems

05.020

Lighting systems

05.030

Illuminations

05.040

Low-voltage power supply

05.050

High-voltage power supply

05.060

Cables/cable trays

05.070

Other electrical services

05.080

Control systems and instrumentation

05.090

Pipe racks/supports

05.100

Water supply and drainage above ground or inside underground construction

05.110

Fire services

05.120

Movement systems: lifts/ elevators/ conveyors

06.

Surface and underground drainage

06.010

Surface water drainage

06.020

Storm water drainage

06.030

Foul and waste water drainage

06.040

Pumping systems

06.050

Drainage connections

07.

External and ancillary works

07.010

Site enclosures and divisions

07.020

Ancillary structures

07.030

Roads and paving (not amounting to a Sub- Project)

07.040

Landscaping (hard and soft)

07.050

Fittings and equipment

08.

Preliminaries | Constructors’ site overheads | general requirements

08.010

Construction management including site management staff and support labour

08.020

Temporary access roads and storage areas, traffic management and diversion (at the Constructors’ discretion)

08.030

Temporary site fencing and securities

08.040

Commonly shared construction plant

08.050

Commonly shared scaffolding

08.060

Other temporary facilities and services

08.070

Technology and communications: telephone,  broadband, hardware, software

08.080

Constructor’s submissions, reports and as-built documentation

08.090

Quality monitoring, recording and inspections

08.100

Safety, health and environmental management

08.110

Insurances, bonds, guarantees and warranties

08.120

Constructor’s statutory fees and charges

08.130

Testing and commissioning

09.

Risk Allowances

09.010

Design development allowance

09.020

Construction contingencies

09.030

 

Price level adjustments

010 – until tendering

020 – during construction

09.040

Exchange rate fluctuation adjustments

10.

Taxes and Levies

10.010

Paid by the Constructors

10.020

Paid by the Client in relation to the construction contract payments

11.

Work and utilities off-site (including related risk allowances, taxes and levies)

11.010

 

 

 

 

Connections to, diversion of and capacity enhancement of public utility mains or sources off-site up to mains connections on-site:

010 – electricity

020 – transformers

030 – water

040 – sewer

050 – gas

060 – telecommunications

11.020

Public access roads and footpaths

12.

Post-completion loose furniture, fittings and equipment (including related risk allowances, taxes and levies)

12.010

Production, process, operating and loose furniture, furnishing and equipment not normally provided before completion of construction

13.

Construction-related consultants and supervision (including related risk allowances, taxes and levies)

13.010

Consultants’ fees and reimbursable:

010 – architects (architectural, landscape, interior design, technical, etc.)

020 – engineers (geotechnical, civil, structural, mechanical, electrical and plumbing, technical, etc.)

030 – project managers

040 – surveyors (quantity surveying, land surveying, building surveying, cost engineering, etc.)

050 – specialist consultants (environmental, traffic, acoustic, facade, BIM, etc.)

060 – value management studies

13.020

Charges and levies payable to statutory bodies or their appointed agencies (in connection with planning, design, tender and contract approvals, supervision and acceptance inspections)

13.030

Site supervision charges (including their accommodation and travels)

13.040

Payments to testing authorities or laboratories

Operation Costs

  • 2-digit cost code for Cost Groups and 3-digit cost code for Cost Sub-Groups

Cost code

Description

4.

Level 2 Cost Category - Operation Costs (OC)

 

Cost Group (Level 3)

 

Cost Sub-Group (Level 4)

 

 

01.

Cleaning

01.010

External cleaning (routine and periodic)

01.020

Internal cleaning (routine and periodic)

01.030

Specialist cleaning (define type)

02.

Utilities

02.0100

Fuel (state type: gas/electricity/oil and other fuel sources)

02.02

Water, drainage and sewerage

03.

Waste management

03.010

Waste collection and disposal

03.020

Recycling and savage

04.

Security

04.010

Physical security

04.020

Remote monitoring

05.

Information and communications technology

05.010

Communication systems

05.020

Specialist technology / sensors

06.

Operators’ site overheads | general requirements

06.010

Administration

06.020

Property insurance

07.

Risk Allowances

07.010

Operation related (user definable)

07.020

Contractual obligations

08.

Taxes and Levies

08.010

Taxes

08.020

Levies

End of Life Costs

  • 2-digit cost code for Cost Groups and 3-digit cost code for Cost Sub-Groups

Cost code

Description

6.

Level 2 Cost Category - End of Life Costs (EC)

 

Cost Group (Level 3)

 

Cost Sub-Group (Level 4)

 

 

01.

Disposal inspection

01.010

Dilapidations report

01.020

Contractual handback obligations

02.

Decommissioning and decontamination

02.010

Shutdowns and decommissioning

02.020

Decontamination

03.

Demolition, reclamation and salvage

03.010

Demolition

03.020

Reclamation

03.030

Salvage

04.

Reinstatement

04.010

Agreed reinstatement works

04.020

Contractual obligations

05.

Constructors’ site overheads | general requirements

05.010

Administration

05.020

Overheads (project specific)

06.

Risk Allowances

06.010

End of life specific (user definable)

06.020

Abnormal risks (user definable)

07.

Taxes and Levies

07.010

Taxes

07.020

Levies

07.030

Credit for grants

​​​​​​​​​​​​​Contents of cost estimates
​​​​​​​概算的內容

  1. Cover page:
    • Estimate Number
    • Project Name 
    • Project Location 
    • Estimate Date
    • List of Contents (if simple enough to list here)
    • Consultants’ Names.
  2. Contents page (for longer list)
  3. Grand Summary (in table form):
    ​​​​​​​大匯總: 

    • Total Cost of Each Section of the Project 
      建設項目每區域的總造價
    • Floor Area of Each Section 
      每區域的樓面面積
    • Unit Cost per Floor Area.
      ​每區域的樓面面積的單價
  4. Descriptions: 
    編製說明: 

    • Project Name 
      項目名稱
    • Project Location 
      項目地點
    • Scope of the Estimate 
      估算範圍
    • Areas: 
      面積:
      • Construction Floor Area / Covered Floor Area 
        建築面積/有蓋樓面面積
      • Ground Area 
        地面面積
      • Site Area 
        地塊面積
      • Lease Gross Floor Area 
        地契樓面面積
      • (Non-)Accountable GFA 
        可豁面/不豁面地契樓面面積
      • Bay Window Area 
        窗臺面積
    • Basis of the Estimate:
      估算依據:
      • Drawings used 
        依據的圖紙
    • Price Levels:
      價格水準:
      • Current Prices 
        現行價格
      • Fluctuations from Date of Preparing the Estimate to Tendering 
        由編製到招標的價格浮動
      • Fluctuations from Tendering to Completion of Construction 
        由招標到竣工的價格浮動
    • Outline Specification of Design and Materials 
      分部設計及用料大綱
    • Finishes Schedule 
      裝飾表
    • Exclusions. 
      不包項目
  5. Elemental Summary of each Section (in table form): 
    每區域的功能分部匯總:

    • Floor Area of the Section 
      該區域的樓面面積
    • Total Cost of Each Element of the Section 
      該區域的每功能分部總造價
    • Unit Cost per Floor Area 
      每功能分部的樓面面積單價
    • % Proportion of each Element. 
      每功能分部所占百分比
  6. Detailed Build-up (Arranged by Elements or Cost Groups):
    ​​​​​​​​具體項目(按功能分部排列):

    • ​Item Reference
      ​​​​​​​編碼
    • Descriptions
      子目說明
    • Quantities (rounded off to tens or thousands)
      數量(拾位元或百位元整數)
    • Rates (rounded off to two significant figures)
      單價(兩個有效數字)
    • Extension (rounded off to ten thousands)
      合價(萬位元整數)
    • Elemental Totals
      功能分部總價
    • Possible additional information: 
      可能的附加資料:

      • Elemental Quantities
        功能分部數量

      • Unit Costs per Elemental Quantities.
        ​功能分部單價

​​​​​​​Adjust published unit costs per floor area

  1. Some Consultant QS firms publish unit costs per floor area for public information.
  2. When using these unit costs, care should be exercised to understand the scope of inclusions and exclusions, and their applicability.
  3. The General Practice Division of the Hong Kong Institute of Surveyors has published a Building Cost Pro-Forma for Private Sector Developments in Hong Kong.pdf.
  4. This should serve as a useful checklist, but the items and figures suggested there should be verified for individual project.

Presentation of cost estimates

(Section added, 18 Mar 2021)

  1. Rounding off:
    • The quantities, unit rates and costs should be suitably rounded off.
  2. Word wrapping:
    • Text in table cells should be word-wrapped to avoid hiding of text at the end.
  3. Comparison tables:
    • When the cost estimates need to give comparison tables to show different options and the differences between options to help reading and appreciation of the relative costs, instead of showing all the columns of each option together, the columns can be re-arranged in the following sequence to save some space and enable easier reading:
    • Item

      Section

      Elemental Cost
      HK$

      Difference from Original HK$

      Cost per m2 CFA
      HK$

      Remarks

      Original

      Option 1

      Option 2

      Option 1

      Option 2

      Original

      Option 1

      Option 2

      Option 1

      Option 2

      Item

      Section

      Elemental Qty

      Elemental Unit and Description

      Elemental Unit Rate

      Remarks

      Original

      Option 1

      Option 2

      Original

      Option 1

      Option 2

      Option 1

      Option 2

    • When spanning over more than one page, the Item and Section columns and column header rows should be repeated.
    • The contents under the Remarks columns can be very flexible, for adjustment methods, calculations, rationale, etc., subject only to space limitation.
    • The remarks can be “Assumed no change”, “Original qty x 2”, “Original rate x 1.2”, etc.
    • If there is not enough space, and the remarks are repeating, just insert “(a)”, “(b)”, “(c)”, in the Remarks columns, and define them below the table to mean:
      • Legend:
      • (a) Assumed no change
      • (b) Original qty x 2
      • (c) Original rate x 1.2 for higher rate due to complexity
    • Instead of showing the quantity and rate adjustments separately, the adjustment can be made directly against the cost, such as:
      • Legend:
      • (a) Option 1 CFA / Original CFA = 2
      • (b) Original cost x 2
      • (c) Original cost x 2 x 1.2 for higher rate due to complexity
      • (d) Original cost x (new elemental qty / original elemental qty) x (new elemental unit rate / original elemental unit rate)
    • Example (d) can in fact save the need to show the columns for elemental qty, unit and unit rates.
    • The adjustment calculations can also cover inflationary factors.

Build-up of elemental unit rates

  1. Note:
    • At the time of the elemental quantity cost estimates, there would not be much details to measure approximate quantities and one has to rely on past cost analyses or some estimated quantity factors and ratios to estimate the elemental unit rates.
    • The elemental unit rates, quantity factors and ratios should be critically reviewed to see whether they should remain unchanged or adjusted when the design of the building is changed even though the elemental quantities can remain unchanged.
    • The price levels of past projects must be adjusted to the present day for use.
  2. Example build-up of elemental unit rate for “Foundation piling” per construction floor area:
    • unit cost per construction floor area based on some similar projects x construction floor area.
  3. Example build-up of elemental unit rate for “Frames and slabs” per construction floor area:
    • concrete volume per m2 floor area x rate per m3 concrete
    • formwork per m2 floor area x rate per m2 formwork 
    • reinforcement kg per m3 concrete x rate per kg reinforcement
    • (The quantity ratios are usually based on some similar projects or by sampling based on a typical bay.)
  4. Example build-up of elemental unit rate for “External elevations” per elevation area:
    • aluminium windows = a% @ $/m2
    • finishes on structural walls, columns and beams = b% @ $/m2
    • external non-structural walls and finishes = c% @ $/m2
    • roller shutters = d% @ $/m2
    • (a%+b%+c%+d% = 100% of the elevation area)
    • (The percentages are approximate proportions of the total elevation area of a sampled section of the elevation.)
  5. Example build-up of elemental unit rate for “Internal divisionsper construction floor area:
    • internal non-structural concrete walls = m2 walls / m2 floor area @ $/m2 wall
    • internal brick walls = m2 walls / m2 floor area @ $/m2 wall
    • doors = No. doors / m2 floor area @ $/No. door
    • etc.
    • (The quantity factors are based on a similar project or approximate wall areas per construction floor area of a sampled floor, which layout may be just an educated guess.)
  6. Example build-up of elemental unit rate for “Internal divisionsper wall areas without deducting door openings
    • internal non-structural concrete walls = a% @ $/m2 concrete wall
    • internal brick walls = b% @ $/m2 brick wall
    • extra for doors = No. doors / m2 walls @ $/No. door (after deducting cost of wall)
    • (a% + b% = 100%)
    • (The percentages are approximate proportions of the total wall area of a sampled floor, which layout may be just an educated guess.)
  7. Example build-up of elemental unit rate for “floor finishes (internal and external)” under "Finishes under cover" per construction floor area
    • floor finish A = a% @ $/m2
    • floor finish B = b% @ $/m2
    • floor finish C = c% @ $/m2
    • add 10% for skirting
    • (a%+b%+c% = an estimated percentage of the construction floor area after deducting void, wall and column areas)
  8. Example build-up of elemental unit rate for “internal wall finishes and cladding” under "Finishes under cover" per construction floor area
    • Wall finish A = m2 wall finish A / m2 floor area @ $/m2 wall finish A
    • Wall finish B = m2 wall finish B / m2 floor area @ $/m2 wall finish B
    • Wall finish C = m2 wall finish C / m2 floor area @ $/m2 wall finish C
    •  (The quantity factors are based on a similar project or approximate internal wall finishes areas per construction floor area of a sampled floor, which layout may be just an educated guess. Note the approximate formula: internal wall finishes = internal wall area x 2 + external wall area. False ceiling voids and unfinished lift shafts would affect this formula.)
  9. Example build-up of elemental unit rate for “ceiling finishes and false ceilings (internal and external)” under "Finishes under cover" per construction floor area
    • Similar to the floor finishes but the total ceiling area should be bigger than the construction floor area.
  10. Other items
    • Follow the above examples.

Composite rates for approximate quantities
組合單價的測算

(Section revised, 18 Mar 2021)

  1. The approximate quantity method measures major work items as composite items so as to reduce the need and time to break down the work items into components for detailed measurement.

  2. This would require the building up of composite rates for such composite items.

  3. Buffers should be allowed in the approximate quantities and composite rates to cover the costs of unmeasured minor items.

  4. When preliminary BIM models are used to generate quantities for preparing cost estimates, the quantities would not reflect the work items not modelled. Extra allowances in the approximate quantities or the composite rates should be made to cover the costs of unmodelled but necessary items.

  5. The following gives examples of composite items and build-ups of composite rates.​​​​​​​

Build-up of composite rates using properly set out dimension tables

  1. ​​​​​​​
  2. Note that in Hong Kong, beam concrete and formwork are measured those parts below slab soffit. Beam reinforcement includes those at the intersection of slab and beam.
  3. ​​​​​​​​​
  4. Note that a typical bay of 6 x 6 m is measured to average out the beam quantities.
  5. Note also that the four beams around each typical bay are shared with adjacent slabs, and their quantities are therefore halved.
  6. ​​​​​​​

Build-up of composite rates using compact format for showing in the Cost Estimate

  1. The following shows another method to present the composite rate calculations in the Cost Estimate.
  2. Note that the reinforcement refers to the concrete quantities already calculated at cells E15 and E23 above.
  3. Note that the function FORMULATEXT() is used to display the formula of the quantity of 0.48 above for checking. The cell entry must be preceded with "=" for it to be recognised as a formula.
  4. Using this function will eliminate the need to type the formula separately as an explanation in addition to entering the formula in the calculation cell and risking mismatch errors.
  5. The formula column can be hidden or deleted when issuing the Cost Estimate.
  6. Note also that the estimated costs have been rounded to the nearest 10,000, using the formula "=ROUND(Rate*Qty, -4)".
  7. This would give the image that the figure is an approximate estimate rather than an accurate figure.