Introduction to Cost Plan Elements in Construction Projects

Author: Gourav Bhaidage
Published: November 30, 2023
Introduction to Cost Plan Elements in Construction Projects

Introduction

Cost planning is a vital aspect of any construction project. It entails identifying and estimating all potential costs associated with the project, from the initial planning phase to completion. A well-structured cost plan is essential for a construction project’s success, as it aids in resource and budget management.

In this article, we’ll provide an overview of the key components of a detailed elemental cost plan as per NRM1 guidelines, setting the stage for more detailed discussions. Each element, from facilitating work estimates to the main contractor’s overheads and profit, plays a crucial role in the overall cost plan. We’ll also emphasise the significance of a thorough cost plan for completing a construction project.

NRM1, or the New Rules of Measurement, is a standardized method of measurement used in the construction industry. It provides a structured and consistent approach to preparing elemental cost plans, which are a critical tool in the early stages of a construction project.

The use of NRM1 ensures accuracy and transparency in the cost-planning process, as it provides a clear and comprehensive framework for measuring and pricing construction works. This is essential in ensuring that accurate and reliable cost information is available for decision-making throughout the project, from feasibility to completion.

Additionally, NRM1 promotes consistency and comparability between different projects, as it sets out a common set of rules and principles for measuring and describing construction works. This allows for more accurate benchmarking and cost forecasting, crucial for effective budget management.

Overall, the use of NRM1 is vital for the preparation of elemental cost plans as it promotes accuracy, consistency, and transparency in the cost planning process. This ultimately leads to better decision-making and cost control, resulting in successful and profitable construction projects. As such, it is a valuable tool for professionals in the construction industry to ensure the smooth and efficient execution of projects. The primary elements often considered when creating an order of cost estimate through the elemental method as per NRM1 are outlined as follows:

 

0. Facilitating works

1. Substructure

2. Superstructure

3. Internal finishes

4. Fittings, furnishings and equipment

5. Services

6. Prefabricated buildings and building units

7. Work to existing buildings

8. External works

9. Main contractor’s preliminaries

10. Main contractor’s overheads and profit

11. Project/Design team fees

 

NRM1 Sections

In the following sections, we will be discussing the various NRM1 sections of elemental cost plans we have listed above. Understanding these sections is vital for any professional in the construction industry, as they provide a comprehensive and detailed breakdown of costs, allowing for more accurate and efficient budgeting and planning.

 

0.     Facilitating works estimate:

Facilitating work estimates is a fundamental part of cost planning in construction projects. They encompass the expenses associated with preparing the construction site and ensuring a safe and efficient work environment. These costs may vary based on the project but typically encompass the following components:

0.1 Treatment of toxic, hazardous, or contaminated materials

0.2 Significant demolition activities

0.3 Temporary support for nearby structures

0.4 Specialized groundworks

0.5 Temporary diversion works

0.6 Exceptional site investigation efforts

Accurate estimation of these costs necessitates a comprehensive understanding of the site and its conditions. This entails conducting thorough site investigations and assessments to identify potential hazards or obstacles that may require attention during construction. Additionally, specific expertise may be needed for tasks like handling hazardous materials or providing temporary support to adjacent structures.

In summary, the facilitating works estimate forms the cornerstone of the entire cost plan, ensuring the smooth and safe progression of the construction project. It is a critical consideration during the initial stages of cost planning and should not be overlooked to prevent unexpected expenses and delays during construction.

 

1.     Substructure

The substructure is the foundation and support system of a construction project, providing a solid base for the rest of the structure to be built. It is a vital element in the cost-planning process, as any issues with the substructure could significantly impact the overall budget and timeline of the project.

1.1 Foundations: This includes the excavation and preparation of the ground to support the weight of the building, as well as the installation of footings and foundation walls.

1.2 Basement Construction: For projects with below-ground levels, the construction of basement walls and floors is a key element in the substructure.

1.3 Retaining Walls: These are structures that hold back soil or other materials and are often necessary for projects built on slopes or uneven terrain.

The substructure also includes any necessary earthworks, such as grading and levelling of the site, and the installation of drainage systems to prevent water buildup.

 

2.     Superstructure

The superstructure refers to the portion of a building above ground level, encompassing the frame, upper floors, roof, stairs, and both external and internal walls. It is a fundamental component of any construction project, demanding careful planning and budget allocation.

2.1 Frame: The frame serves as the structural backbone of a building, ensuring its stability and strength. It comprises columns, beams, and other elements that bear the building’s weight, with the choice of frame type contingent on the building’s design and purpose.

2.2 Upper floors: Upper floors, located above the ground floor, are designated for various functions, such as offices, residential units, or storage. They can be constructed using diverse materials, including concrete, steel, or timber.

2.3 Roof: The roof acts as the building’s protective cover, shielding it from the elements. It can be crafted from a variety of materials like tiles, shingles, or metal sheets, and its design profoundly influences the building’s aesthetics and functionality.

2.4 Stairs and ramps: Stairs and ramps are crucial for accessing different levels within a building, necessitating meticulous design and construction to ensure safety and accessibility for all users.

2.5 External walls: External walls constitute the outer layer of the building, providing insulation and protection. They can be constructed from materials like brick, concrete, or cladding.

2.6 Windows and external doors: Windows and external doors are openings in the external walls, allowing for natural light and ventilation. They also play a significant role in shaping the building’s appearance.

2.7 Internal walls and partitions: Internal walls and partitions divide the building’s interior space into distinct rooms and areas, with materials ranging from drywall to glass.

2.8 Internal Doors: Internal doors are used to separate rooms within a building and can be composed of various materials, such as wood or glass. They are essential for privacy and functionality.

 

3. Internal finishes

For a precise cost plan, it’s crucial to have a thorough understanding of internal finishes. This element focuses on the costs associated with materials and labour for the walls, floors, and ceilings of a building.

3.1 Wall Finishes involve choosing and installing materials like paint, wallpaper, tiles, or panelling for interior walls. This may also cover preparation work such as surface levelling or repairs.

3.2 Floor Finishes concern the materials and installation of flooring, like carpet, hardwood, tile, or vinyl. This section may also encompass costs for subfloor preparation, such as levelling or moisture barriers.

3.3 Ceiling Finishes encompass materials and installation for the ceiling, including options like drywall, suspended ceiling tiles, or decorative finishes. This may also cover costs for structural work, such as installing support beams or altering ceiling height.

Providing detailed information for each finish type is crucial for accurate cost estimation. This includes specifying material types and quality, labour rates, and any additional costs like equipment rental or disposal fees. A comprehensive cost plan for this project element can be achieved by meticulously analyzing each sub-section of internal finishes.

 

4. Fittings, furnishing and equipment

Fittings, furnishings, and equipment are essential elements in any construction project that add functionality and aesthetics to the space. These items are not considered part of the structural components but are crucial in creating a comfortable and functional living or working environment. In a building cost plan, fittings, furnishings, and equipment are typically listed separately from the other elements for easier tracking of costs.

Examples of fittings and furnishings include counters, desks, benches, and worktops, which are not integral parts of wall finishes. Other items such as curtains, blinds, and wall hangings are also classified under this category. Equipment, on the other hand, refers to items such as fireplaces, storage racks, tables, and chairs.

When creating a cost plan, it is important to consider the cost of fittings, furnishings, and equipment along with the other elements to ensure an accurate estimate of the project’s total cost. It is also essential to work closely with the client to determine their preferences and budget for these items to avoid any cost overruns.

 

5. Services

In construction, “services” include crucial systems and equipment that perform various functions in a building. The cost plan for services includes materials, labour, and equipment for installation and maintenance, along with necessary building work. Consultants, such as mechanical and electrical engineers, design the services to meet standards, while the main contractor oversees installation coordination. When creating a cost plan for services, factors like building complexity, size, specific requirements, and technological needs are considered, with provisions for potential variations or unforeseen expenses. This plan is essential for efficient building systems, impacting the overall project cost, and highlighting the importance of careful planning and budgeting. In this section following items are considered.

5.1 Sanitary installations – Appliances for health, hygiene, and personal washing, along with their accessories. Bathroom, toilet, and shower fittings.

5.2 Services equipment – Catering equipment designed for use in providing food and drink on a communal or commercial scale.

5.3 Disposal installations – Piped foul water drainage systems from sanitary appliances, sinks, and kitchen appliances to the first underground drain connection.

5.4 Water installations – Piped water supply systems from the point of entry into the building to the appliance or equipment. Cold and hot water piped water supply systems from the point of storage to the user. Steam distribution and condensate return pipelines to and from services equipment within the building.

5.5 Heat source – A heat source supplying heat to one or more heating systems.

5.6 Space heating and air conditioning – Systems where heating is generated at a central point and distributed to the spaces and/or locations being treated. Local heating systems where heating is generated in or adjacent to the space or location to be treated. Central cooling systems where cooling is performed at a central point and distributed to the spaces and/or locations being treated.

5.7 Ventilation – Air movement systems removing vitiated air from spaces and/or supplying fresh outside air to spaces. No environmental control or air treatment except filtration when required. Local and special ventilation systems. Smoke extract/control systems.

5.8 Electrical installations – The distribution of low-voltage electricity from (and including) the building main switchgear panel to (and including) the area distribution boards. Sub-circuit power installations from sub-distribution boards terminating at socket outlets, fuse connection units, and other accessories. Local generation equipment systems using the natural elements (i.e. wind and sun) to generate energy. Earthing and bonding systems for the transfer of electrical current to earth.

5.9 Fuel installations – Storage tanks and vessels for gas, oil, petrol, diesel, or liquefied petroleum gas (LPG). Piped gas supply systems taking gas from the point of the mains connection within the building and distributing to user points.

5.10 Lift and conveyor installations – Electro-mechanical or electro-hydraulic installations for the conveyance of persons, goods, or equipment from one level to another in a vertical plane, escalators, moving pavements, conveyors, cranes and unenclosed hoists, car lifts, car stacking systems, turntables.

5.11 Fire and lightning protection – Piped distribution systems within the confines of the building for firefighting purposes, fire suppression systems, lightning protection.

5.12 Communication, security and control systems – Systems for communicating, including visual, audio, and data installations. Observation and access control installations. Control systems which, from a central remote location, provide means for controlling and reporting.

5.13 Specialist installations – This includes supply installation through piped distribution of specialized gases (e.g. oxygen or nitrous oxide), compressed air, etc.

5.14 Builder’s work in connection with services – Miscellaneous builder’s work associated with the installation of water, gas, electricity, heating, ventilation, above-ground drainage, telecommunications, and other services, as well as pods.

 

6. Prefabricated buildings and building units

Prefabricated buildings and building units are gaining popularity in construction projects due to their cost-efficiency, effectiveness, and eco-friendliness. These components are primarily manufactured off-site and then assembled on-site, resulting in reduced construction time and lower labour costs.

6.1 Proprietary Modular Construction – One form of prefabricated building is complete or near-complete self-finished building superstructures using proprietary modular construction. These are largely pre-assembled off-site and subsequently transported to the construction site for installation.

6.2 Modular Room Units – Another type includes modular room units, which are also predominantly pre-manufactured off-site as complete units. These can encompass bathrooms, toilets, and shower pods and are straightforward to install on-site.

6.3 Benefits of Prefabricated Elements – Prefabricated buildings and units offer several advantages, such as decreased construction time, enhanced quality control, and cost savings. They also boast a lower environmental footprint, as they reduce waste and employ sustainable materials.

6.4 Considerations for cost planning – When integrating prefabricated elements into a cost plan, it’s vital to account for transportation and installation costs, along with potential charges for customisation or alterations. Nevertheless, the overall cost savings and efficiency associated with prefabricated elements make them a valuable component of a comprehensive cost plan.

 

7. Work to existing buildings

Existing buildings may require minor demolition and alterations, like removing walls or making room for new installations. Repairs to existing services, such as fixing leaks or updating electrical wiring, might also be essential. This category may involve damp-proof courses, eliminating fungus and beetles. On occasion, preserving the building’s external appearance during construction may demand facade retention. Additionally, tasks like surface cleaning and renovations may fall under this section. Thoroughly assessing and planning for necessary work on existing buildings is crucial to ensure a seamless and prosperous construction project.

7.1 Refurbishment and Alteration Services – This section covers specific tasks related to existing buildings, using one or more trades to alter, adapt, or repair structures. This includes cutting away and removing existing work, inserting new elements, and carrying out minor demolition works and soft stripping.

7.2 Repairs to Existing Services – This section focuses on revamping existing service installations, systems, equipment, and plants.

7.3 Damp-Proof Courses, Fungus and Beetle Eradication – This section addresses preventing rising dampness in existing masonry walls and treating existing timbers to eliminate fungus attacks such as dry and wet rot, as well as various wood-boring infestations.

7.4 Facade Retention – This section involves providing temporary or semi-permanent support for unstable structures or facades, specifically those not scheduled for demolition.

7.5 Cleaning and Protective Coatings – This section includes cleaning and removing stains and deposits from existing surfaces, as well as applying coatings to protect surfaces. This may also include bird/vermin repellent coatings.

7.6 Renovation Works – This section encompasses various types of repairs for different types of materials. Masonry repairs involve local cutting out, reinstatement of existing brick, block, or stonework, and repointing defective joints. Concrete repairs involve cutting out, repairing, partially replacing, resurfacing, and rehabilitating eroded and defective concrete. Metal repairs focus on repairing, renovating, and conserving existing architectural metalwork, metal components, and finishes. Timber repairs involve repairing, renovating, and conserving existing timber structures, components, and finishes. Finally, plastics repairs address fixing plastic windows, rooflights, doors, cladding, and similar elements.

 

8. External Works

External works are a vital component of every construction project, adding the final touches and guaranteeing the building’s functionality. Moreover, they can have a substantial influence on the project’s overall cost. Consequently, it is imperative to incorporate these aspects into a comprehensive cost plan.

8.1 Site preparation works: These tasks encompass activities like site clearance, ground preparation, and the installation of temporary on-site facilities.

8.2 Roads, paths, and pavings: This entails building roads, walkways, and other surfaces surrounding the building, essential for access and circulation.

8.3 Soft landscaping: This involves planting trees, shrubs, and other vegetation to improve the site’s appearance and deliver environmental advantages.

8.4 Fencing, railings, and walls: These are crucial for ensuring safety and security while also delineating the property’s boundaries.

8.5 External fixtures: This covers items like outdoor lighting, signage, and other decorative features.

8.6 External drainage: Efficient drainage is vital in safeguarding the building and its immediate surroundings from water damage.

8.7 External services: This includes installing utilities like electricity, gas, and water supply to the building.

8.8 Minor building works and ancillary buildings: These are extra structures, such as storage sheds, garages, or other small buildings that might be required on the site.

In summary, the cost of external works will vary based on factors like project size, complexity, site conditions, and materials chosen. It is essential to meticulously assess and allocate a budget for these components to ensure the construction project’s success.

 

9. Main contractor’s preliminaries

The main contractor’s preliminaries are an essential element in any construction project cost plan. These costs cover the necessary items that are not directly related to the construction process but are necessary for the project’s successful completion. They typically include the main contractor’s management and administrative costs, as well as any preliminary work required before construction can begin.

9.1 Employer’s Requirements – This includes specifications and conditions in a construction project covering site accommodation (facilities for personnel and equipment), site records (project documentation for transparency and compliance), and completion/post-completion requirements (criteria for project closure and post-completion obligations like warranties and maintenance plans).

9.2 Main Contractor’s Cost Items – These encompass various aspects within the employer’s requirements document for a construction project, providing a comprehensive framework for project management and execution. Employer’s requirements cover a broad range of specifications, including guidelines for the project management team and staff, site establishment requirements, temporary services provision, security measures, safety and environmental protection practices, control and protection protocols, specifications for mechanical equipment, temporary structures, site record-keeping procedures, criteria for project completion, cleaning standards, financial considerations, essential site services, and guidelines for insurance, bonds, guarantees, and warranties to safeguard the project’s interests and ensure its successful execution.

 

10. Main contractor’s overheads and profit

The main contractor’s overheads and profit are pivotal components within any construction project’s cost plan. These costs encompass the general expenses incurred by the contractor for project management, including office rent, insurance, and staff salaries. Furthermore, the contractor’s profit represents the amount they seek for undertaking the project’s risks and delivering successful completion.

10.1 Main Contractor’s Overheads – The section of the cost plan element refers to the Main Contractor’s overhead, which includes all the indirect costs associated with the project. This can include expenses such as office rent, utilities, and administrative costs. These overheads are typically calculated as a percentage of the total project cost and are added to the overall project budget.

10.2 Main Contractor’s Profit – section, the Main Contractor’s Profit is outlined. This refers to the amount of money that the contractor will make from the project. The profit is typically calculated as a percentage of the total project cost and is added to the overall project budget. This section is important as it ensures that the contractor is compensated for their work and can continue to operate their business successfully.

 

11. Project/Design team fees

Project/design team fees constitute a vital part of a comprehensive cost plan for construction projects. This section encompasses the expenses associated with consultants and the main contractor’s pre-construction fees.

11.1 Consultants Fees – These fees cover the costs of professional services in a construction project, including project team and design team consultants’ fees, other consultants’ fees, site investigation fees, and specialist support consultants’ fees. They compensate various consultants and experts involved in planning, design, site assessment, and specialized support for the project.

11.2 Main Contractor’s Pre-construction Fees – These fees encompass a variety of costs in a construction project, including management and staff fees, specialist support services fees, charges for temporary accommodation, services, and facilities, as well as the main contractor’s overheads and profit. They include expenditures related to project personnel, specialized support, temporary site arrangements, and the main contractor’s operational costs and desired profit margin.

11.3 Main Contractor’s Design Fees (Note: Only applicable where a main contractor-led design and build contract strategy is to be used.) – Main contractor’s design consultants’ fees refer to the compensation paid to professionals engaged by the main contractor when design liability is being transferred to the main contractor, typically in design and build or other main contractor-led design contract strategies. These consultants contribute to the design process, and their fees cover their services in this capacity.

 

Conclusion

In conclusion, a meticulously structured cost plan is pivotal for the triumph of any construction project. It furnishes a comprehensive breakdown of all expenses and aids in pinpointing potential risks and challenges. A firm grasp of the various cost plan elements, encompassing facilitating works estimates, substructure, superstructure, fittings and furnishings, services, prefabricated buildings, work on existing buildings, external works, main contractor’s preliminaries, and project/design team fees, is essential for precise and efficient budget management.

This understanding also facilitates informed decisions regarding cost-saving measures and resource optimization. Consequently, construction professionals must thoroughly comprehend the cost plan components and continually review and update it during the project to ensure its effectiveness. A well-prepared cost plan can save time, and money, and avert unforeseen delays, rendering it a critical aspect of any triumphant construction project.

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