Nick Dean, Director of Cost Planning at DBK, presented their in-house cost management protocol for cost planning to a room-full of APM members and guests at Colmore Gate, Birmingham. DBK provide construction related consultancy services including building surveying, cost management and project management to sectors including health, industrial, residential and retail.
The presentation covered the typical questions that should be asked during cost planning (‘What should I expect from my quantity surveyor’?), and was broken into three sections:
1. The Product (The cost plan document)
Nick offered a list of the sections to include in the document, but warned not to risk getting ‘sucked into detail and losing the bigger picture’.
All cost documents should be base-dated, and an inflation forecast included when the development programme and construction period is known. For reference, inflation in the Midlands area is running at about 1-2% over the next 12 months, and for London it’s 5%.
Nick advised that the cost plan is a ‘living’ document and will evolve with design development.. A high level Risk Register is included to highlight potential cost problem issues.
2. The Process
Using the analogy of an AA route planner booklet, Nick explained that the cost plan document should be used as a ‘roadmap’ to successfully deliver the project on budget.
To ensure the cost plan is robust, Nick advised that it should be properly communicated, with agreement to the inclusions and exclusions and buy-in from the design team being essential. In terms of monitoring and controlling the progress of the cost plan, it is recommended that the quantity surveyor/cost planner should not be quiet in meetings – they need to be proactive!
Nick also advised that a ‘golden rule’ of cost reporting is to cost-check before submitting scheme details to the planners! He added that at the ‘Pre-tender estimate’ stage the project manager should aim to give the quantity surveyor/cost planner ample time to carry-out the cost check exercise.
Nick finished off by running-through some ‘real-world’ examples of building costs from the DBK portfolio, including industrial, , offices, hotels, residential , retail and student accommodation schemes.
Nick's presentation can be seen below