Interpolation is a technique used in the early stages of the design sequence when information, drawn or otherwise, on the proposed project is in short supply. It requires a good deal of skill and experience and is the process of adding in or deducting from the cost analysis figure to arrive at a budget for a new project. Therefore in preparing a budget for a new project to assume, cost analysis has been chosen as the basis for the estimate. However, the cost analysis will contain items that are not required for the new project and these must be deducted. For example, in the new project, the client wishes to exclude the installation of air conditioning, included in the cost analysis project, from the estimate and this will have to be deducted from the budget, but on
another hand, the client wishes to include CCTV throughout and the cost of providing this must be calculated and added in. It is important, as described later, to adjust costs to take account of differences in price levels. The process continues until all identified differences have been
accounted for. Other credible approaches to approximate estimating that are available to the quantity surveyor are:
- The unit and square meter methods, generally used for preliminary estimates when firm information is scarce
- Approximate quantities and elemental cost planning for later stage estimates
- Other approaches are often cited, most notably cubic meter and storey enclosure methods, but the accuracy of these approaches is somewhat dubious and they are seldom used in practice and are not considered here.
Unit method: The unit method is a single price rate method based upon the cost per functional unit of the building, a functional unit being, for example, a hotel bedroom. This method is often regarded as a way of making a comparison between buildings in order to satisfy the design team that the costs are reasonable in relation to other buildings of a similar nature. It is not possible to adjust the single rate price and therefore is very much a ballpark approach. Suitable for clients who specialize in one type of project; for example, hotel or supermarket chains, where it can be surprisingly accurate. Other examples where unit costs may apply are:
- Schools – cost per pupil
- Hospitals – cost per bed space.
Superficial method: The superficial method is a single price rate method based on the cost per square meter of the building. The use of this method should be restricted to the early stages of the design sequence and is probably the most frequently used method of approximate estimating. Its major advantage is that most published cost data is expressed in this form. The method is quick and simple to use though, as, in the case of the unit method, it is imperative to use data from similarly designed projects. Another advantage of the superficial method is that the unit of measurement is meaningful to both the client and the design team. Although the area for this method is relatively easy to calculate, it does require skill in assessing the price rate. The rules for calculating the area are:
- All measurements are taken from the internal face of external walls. No deduction is made for internal walls, lift shafts, stairwells, etc. – gross internal floor area
- Where different parts of the building vary in function, then the areas are calculated separately
- External works and non-standard items such as piling are calculated separately and then added into the estimate. Figures for specialist works may be available from sub-contractors and specialist contractors.
Approximate quantities: Regarded as the most reliable and accurate method of estimating, provided that there is sufficient information to work on. Depending on the experience of the surveyor, the measurement can be carried out fairly quickly using composite rates to save time. The rules of measurement are simple, although it must be said, they are not standardized and tend to vary slightly from one surveyor to another.
- One approach involves grouping together items corresponding to a sequence of operations and relating them to a common unit of measurement; unlike the measurement for a bill of quantities,
- where items are measured separately
- Composite rates are then built up from the data available in the office for that sequence of operations
- All measurements are taken as gross over all but the very large openings
- Initially, the composite rates require time to build up, but once calculated they may be used on a variety of estimating needs
- Reasonably priced software packages are now available. An example of a composite is shown below for substructure:
Builder’s quantities: Builder’s quantities are quantities measured and described from the builder’s viewpoint, rather than in accordance with a set of prescribed rules, such as SMM7. There can be quite a significant difference between the builder’s quantities and approximate quantities.
Elemental cost planning: A cost plan is an estimate presented in a standard elemental format. The industry norm is the BCIS list of elements referred to earlier. The estimate is based on a cost analysis of a previous project and adjusted to suit the new project. The characteristics of elemental cost planning are as follows:
- Costs are related to elements of the building – a feature that is not possible to achieve when using other methods of calculating to produce a lump sum estimate
- The elemental cost allocation is of use to the client and the design team as it is possible to see from an early stage in the design sequence how much of the project budget has been allocated to
various aspects and elements of the project
The estimate increases in detail as the design development progresses. Initial costs are allocated over the BCIS groups of element:
- o Substructure
- o Superstructure
- o Internal finishes
- o Fittings
- o Services
- o External works
- o Preliminaries and contingencies
• By the design development stage it should be possible to allocate costs over the full range of BCIS elements. This transparency allows costs to be reallocated while keeping the overall target cost the same
• Costs are based on a cost analysis of a previous similar project and adjusted for a range of factors as described below