Preparing Figures

Master planning and budget considerations when planning a new project.

The master planning and programming phase of a project represents the first major step in the design process. It transforms a project from an idea to a more detailed and defined plan.

This phase includes a more detailed definition of the anticipated size of the project, the types of spaces that will be housed in the building, the relationships of these spaces within the building and an understanding of how the building will relate to the site.

During a typical master-planning phase, school officials explore, evaluate and refine many alternatives before proposing an acceptable solution. As these options are reviewed, one major element that helps focus the decision-making is a full understanding of the costs involved.

In many cases, these costs are developed using less sophisticated methods such as costs per square foot or historical costs from other projects. Although this method may prove to be successful for less complex projects, it has limited accuracy and could be a major stumbling block for the project later in design.

Defining the scope

So what is the best method to develop accurate budgets based on limited programming information? The first approach is to understand the anticipated scope of the project. At this early stage, the scope is still being developed, but should include information in some of the following areas:

  • Anticipated space types.

  • Net square footage for space types.

  • Gross building area.

  • Number of floors.

  • Relationships between spaces.

  • Building geometry/massing diagrams.

  • Narratives outlining quality of materials and anticipated building systems.

  • Site/civil/infrastructure.

For the purposes of establishing an accurate budget, the project scope is the foundation on which everything will be based. The best approach to determine the scope is through early communication between school officials and the design team of goals and expectations. This will allow the team to map out a realistic timeframe to prepare information and documentation.

This is not to say that the scope of the project can't or won't change as the design progresses. As in many projects, the school's needs, overall goals and expectations may change. However, by establishing the scope early and tying cost to that scope, the plan can provide a baseline that can help anticipate the impact of changes and improve decisionmaking.

Interactive approach

Schools can develop budgets many ways during the master-planning process. They can determine budgets at the end of the process once the information has been compiled, or do so during the process in a more interactive approach.

The second approach has proven to be been more successful because it allows team members to make decisions as they move through the process. This interactive process allows the team to look at scope and quality issues and modify the project based on how it affects the bottom line. One of the more successful tools for preparing budgets at the programming phase is a cost model. The cost model provides the structure and flexibility to review scope and quality issues in this interactive approach.

One of the first steps before setting up a cost model is to recognize that budgets can include costs for many different categories. The objective is to consider all costs without duplicating or omitting any.

Categories can include the following:

  • Construction costs: building, site/civil/landscape, demolition, environmental.

  • Acquisition and real-estate costs: land purchase, real-estate transactions, financing costs.

  • Operational costs: utilities, staff, maintenance, moving costs, rent for temporary space.

  • Soft costs: professional fees (design, engineering), consultants, program management, legal counsel; furniture, fixtures and equipment; testing, surveys, insurance.

Figure 1 represents how these categories relate to the overall project cost. This article focuses on developing budgets specifically for the building and site components of a project and outlines some of the ways to develop an accurate cost model.

The cost model

Here are the steps involved in setting up the cost model:

  • Develop a framework for the estimate.

  • Evaluate space types.

  • Evaluate square footage.

  • Quantify building scope.

  • Quantify site scope.

  • Provide appropriate pricing levels.

  • Incorporate logistic pricing issues.

  • Evaluate risk issues.

  • Project team evaluation.

  • Use model for alternatives and options.

When setting up the framework and format for a cost model, it is important to format the project into logical components that provide enough detail to allocate cost accurately, allow tracking and provide a framework to incorporate changes during the master planning process.

The following categories are suggested for the framework:

  • Building shell: foundations, structure, exterior closure, roofing.

  • Interior construction: Interior walls, doors, finishes.

  • Equipment/vertical transportation: built-in equipment, specialties, stairs, conveying systems.

  • Mechanical/Electrical: plumbing, heating/ventilating and air conditioning; fire protection; electrical, power, lighting and communications.

  • Sitework: site preparation, site infrastructure (roads, parking), site improvements, utilities.

Evaluate space

The cost model needs to include the space types that will be part of the project. As part of the space allocation, incorporate the programmed space types that will be included — assigned areas such as classrooms, labs and offices. Also include unassigned spaces such as circulation, toilets and mechanical. Listing all space types will provide the flexibility to evaluate the cost of specific spaces and include modifications to specific space types and sizes.

Building square footage will fall into two categories: building assignable and building gross square footage. It is important to apply assignable square footage to each of the space types and apply the balance of the building gross square footage to the non-assignable space. Square footage equates to cost and cost- model needs to incorporate all the square footage anticipated.

For all of the building components identified under framework, it will be necessary to develop a meaningful way to measure and allocate the scope. Options include square footage of elevated structure, square footage of exterior building envelope, percentage of exterior glazing systems, number of lab stations, number of elevators, or quantity of plumbing fixtures based on building population.

Similar to the building scope, it will necessary to quantify site scope items. Examples could include acres of site development, square footage of structures to be demolished, number of parking spaces, lineal feet of roads, or acres of landscaping.

Pricing levels

Pricing levels provide some of the more important criteria in the cost model. A cost professional needs to understand the anticipated quality levels for materials and building systems in order to apply the most appropriate price.

There are several ways to present quality levels. The first approach is to develop a project narrative that outlines anticipated quality levels and building systems. These narratives should follow the systems framework and outline the expectations in as much detail as possible. School officials and building users should make some decisions early in the process, which will help improve the accuracy of the costs and allow the team to test alternatives.

The second approach is to look back at a project that is consistent with the quality levels and systems of the proposed project. It is then possible to review drawings, pictures, and possibly visit the site of the previous project to fully understand the types of materials and systems that should be used on the proposed project.

In addition to system and quality pricing, it is necessary to include cost for logistic issues. With any project, there always are “bigger picture” issues that can affect the cost. These issues include contracting method, phasing, temporary enclosure, material storage, site access and staging conditions, labor availability, insurance requirements, out-of-hours work, shift work and parking. The goal is to understand the environment in which the project will be built and any school requirements that would affect the way subcontractors and contractors perform the work.

Evaluate risk issues

Construction projects inherently are risky. At the master-planning stage, they become even riskier because the school and the designers have not investigated the potential risks sufficiently. It will be necessary to identify potential risk issues and, where possible, allocate costs for those risk items. As the project moves forward, these risk items will need to be further investigated and, wherever possible, minimized or eliminated. Risk items will vary from project to project, including sub-surface conditions, environmental issues, schedules, underground utilities, weather conditions and labor issues.

Once a model has been developed it is crucial to review it with school officials and the design team to make sure it is consistent with the overall project expectations.

With any project, getting the best solution the first time through the process would be unlikely. With a fully developed cost model, it will be possible to quickly and accurately reflect changes that occur, incorporate comments and modifications, and explore various options as they develop. With its flexibility, the cost model can provide the team with the knowledge of bottom-line impact so value and budget can be balanced against the overall expectations of the project.

Laudolff, CPE, is a principal and senior cost manager with Owner Services Group, Inc., Lombard, Ill.

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