QUANTITY SURVEYING PROGRAMME,

JBAT, UiTM PERAK Branch

By,
SITI SARAH MAT ISA

1
 Introduction
 Definition of cost analysis
 Purpose of cost analysis
 Objectives / uses of cost analysis
 Buildings ALLOWED for cost analysis
 Preparation of cost analysis
 Principles of analysis
 FAQ

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 The cost analysis of construction project
could provide the QS useful information of
cost data
 The cost analysis provides a yardstick for the
client and design team.
 The success of cost planning and cost control
system depends on the proper use of cost
information

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The systematic breakdown of cost of a
building into various ELEMENTS which are
meaningful to client and members of the
design team to assist in the preparation of
cost plans for future projects.

A systematics breakdown of cost data to

facilitate examination and comparison of cost
I.H. Seeley (1996)

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➢ To reveal the cost relationship
between various sections/
elements of a building which are
meaningful to both client and
design team.
➢ To allow the costs of two or
more buildings to be compared

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Appreciation – enables clients and designers to know and
appreciate how the cost is distributed among the elements
and compared to the overall cost of the building
Judgement – able to determine which elements have
disproportionate cost when consider in relation to
efficiency and quality. Therefore, enable client and
designer to develop idea as to how costs can be
allocated to obtain a more balanced design

Remedial Action - Allow remedial action to be taken

on receipt of high tenders, by revealing the sources of
over expenditure. e.g. Badly designed elements could
be redesigned in an attempt to bring the cost down.

Cost Planning – Cost Analysis can be used as cost

information during the development of design for future
building project
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❑ A Letter of Acceptance has been issued

❑ Project under constructions

❑ Completed Construction Project (but not

more than 2 years)

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 DESIGN PROCESS TERMINOLOGY

Cost Control
(Estimates can occur at any stage of this process)

Cost Planning

Cost Limit Cost Plan Cost Analysis

Tender
Cost Check awarded
R.I.B.A.
A B C D E F G H J K L M Management
OUTLINE SCHEME DETAIL PRODUCTION BILLS OF TENDER PROJECT SITE Handbook
INCEPTION FEASIABILITY COMPLETION FEEDBACK
PROPOSAL DESIGN DESIGN INFORMATION QUANTITIES ACTION PLANNING OPERATIONS Terminology

BRIEFING SKETCH PLANS WORKING DRAWINGS SITE OPERATIONS Usual

Terminology

Pilot
Outline Details Record Drawings
Design Plans Detail
Design
Drawing
Scheme Production Contract
Design Plans Information Drawings
Drawings

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➢ The cost analysis is prepared by examining
the information of a project which has been
constructed in which the bills of quantities
have been priced by the successful
contractor.
➢ Technically, it’s worthwhile to analyse the
actual costs (final account) rather than based
on projected costs (accepted tender sum/
contract sum).
➢ However, in practice, cost analysis is
normally prepared based on data collected
from an accepted tender.
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A) The cost analysed are the Client’s Cost on
the accepted Tender sum
B) The cost analysed are the Contractor’s
Costs on the Final Account
C) The cost analysed are the Client’s Costs on
the Final Account

Write down your answer and give 1 reasons

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There are several reasons as to why the cost analysis
is not prepared based on the ‘actual’ cost

❑ Final account are often complex and requires

much time to analyze the changes in the
account.
❑ Final account often delayed – data analysed can
be outdated
❑ Analyzing variations accounts are time
consuming.
❑ Difficult to allocate increase costs & contractual
claims accurately.
(Ashworth, 2004)

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12
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Total sum of money allocated to
this part of a building

E.g. Work Below Lowest Floor finish,

Frame, External Walls, etc.

Where can I obtain the above details?

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◦ Cost of a particular element
divided by the gross floor area
(GFA).
Cost/m2 GFA =Total cost of element
GFA
◦ Provide the elemental cost
contribution to the overall rate
per m2 GFA for the project.

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◦ Total quantity of the element
expressed in units appropriate to
the element concerned
◦ You can refer to the table in the
ECA manual page 8-9
Issue:
Can I extract the EUQ directly from the BQ?

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◦ The Element Total Cost will be
divided with EUQ
EUR = Total cost of element
EUQ
◦ Hence, the Element unit RATE
which when multiplied by the
element unit quantity (EUQ) will
give the total cost of the element.

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 The proportional relationship
between an element and the GFA.
 Also known as cost factor.
 Calculated by dividing the net area
of element (EUQ) with GFA to three
decimal places
= EUQ
GFA

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6/15/2023 19
 The ECA has been well known to provide a
very useful cost information especially in
the process of cost planning for future
project
 However, the cost obtained from the ECA is
insufficient to determine the actual cost of
proposed project
 It must consider the condition and the
details of the proposed project, the quality
and quantity of works involved as compared
to previous project
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 Information YOU WILL require:
Standard form of Elemental Cost Analysis prepared
by the Building Cost Information Centre of Royal
Institution of Surveyors Malaysia (RISM)
Form 1, 2 & 3. (Jangan ubah atau tambah ikut
sesuka hati kamu)
➢FORM 1: Project information
➢FORM 2: Summary of element cost with
preliminaries and contingencies shown
separately
➢FORM 3: A brief specification in elemental
format.
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 Information YOU WILL require:
▪ Tender Report
▪ Drawing – plan & elevations ( Architecture
Drawing)
▪ Contract Documents/Accepted tender
documents
▪ Manual for the preparation of ELEMENTAL
COST ANALYSIS.

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Bills of Quantities (with quantities)
▪ Most preferred to use BQ with quantities
▪ The BQ should be prepared in an elemental
format.
▪ BQ items must be allocated to more
appropriate element (please refer manual)
▪ Prime cost sum need to be allocated to their
respective elements (allowed & tendered),
e.g., Electrical Installation, Lift Installation
▪ Unusual or difficult items in the BQ, should be
included with the more appropriate element.
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Contingencies - should be omitted from
the analysis; why?

▪ It is impossible to allocate to any of the

elements.
▪ It bears only a little resemblance to the
project design.

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25
 A building within a project should be
analyzed separately

Eg. A project consist more than one building,

analysis should be done separately for
each building
Project title :
The project comprising the construction and
completion of 4-storey academic block, 4-storey
administration building and multipurpose hall.

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Chose only one building for ECA
preparation

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 Information must be provided to assist the
preparation of estimates based on
abbreviated measurements.
Information such as drawings and specification
need to be provided

 Analysis to be carried out in stages with each

giving progressively more details

 Preliminaries items must be dealt as a

separate item
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 Lump sum adjustments (if any) must be
spread pro-rata amongst all building elements
and external works based on all works
(Contract sum excluding PC Sum & Provisional
Sum).
e.g.
Lump sum: RM50,000.00 (changes scope of works)
Element (Frame):RM250,000.00
Contract sum (excluding PC & Prov. Sum): RM2,500,000.00

Pro-rata = RM50,000.00) X RM250,000.00 = RM5,000.00

RM2,500,000.00
= RM 250,000.00 + RM 5,000 = RM 255,000.00 (new)
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 Professional fees must be excluded from the
analysis.
 Contingency sum must also be excluded from
the analysis but shown separately.
 The cost unit of all elements must be
expressed in RM to two decimal places per
m2 of GFA.
 A functional unit cost of the analysed
building in RM to two decimal places must be
given (excluding cost of external works).

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 Comprise five sections:
◦ Introduction
◦ Principles of analysis
◦ Instructions
◦ Definitions of terms
◦ List & Contents of elements
 Standard form of Elemental Cost Analysis
Form 1: Project Information and the information of
analysed building
Form 2 : A Breakdown Summary of Cost Element
Form 3 : Brief Specification

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 Sources:
 FORM 1 Accepted tender/contract
documents, tender reports
 Project title and drawing (plan &
 Client elevations)
 Location
 Tender date
 Project details
 Contract type Purpose:
 Contract particulars  To inform the user about
 Market conditions the nature of the project
 Competitive tender list and its price level
 Design/Shape information  To allow the user make
 Brief cost information necessary adjustment to
cater for time, location,
type of contract, market
and size factors

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Form 1

33
Plan of building Elevation of the bldg
20m

(-2) 35m
40m (+6)

(+3) 15m
 Sources:
 FORM 2 Accepted tender/
contract documents,
 Summary of elements costs drawing (plan &
 List of element elevations)
 Total cost of element
 Cost per square metre GFA Purpose:
 Element unit quantity  Can be used to prepare
 Element unit rate realistic estimates,
 Element unit ratio per metre budget and cost plan
square GFA for new project
 Reinforced concrete  To allow useful cost
 Reinforcement comparative study to
 Formwork ensure the design does
 P.C sum: allowed & tendered. not exceed the
estimated budget

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Form 2

36
 Sources:
Accepted
 Form 3 – tender/contract
Brief specification – documents, Contract
Briefly describe the Drawing (plan &
various components in elevation)
each elements, the Purpose:
types and quality of  Provide overall picture
materials used for of the standard and
each part of building quality of the building
which is useful for
making comparative
study
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Form 3

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 GFA  Area from drawings
 Total cost of element  Cost extract from Bills of
 EUQ (except finishes, Quantities
fittings & finishings,  Area measured from
services). drawings
 Finishes, fittings &
finishings, services  Area & quantities
 Volume of reinforced extract from Bills of
concrete Quantities
 Weight of reinforcement
 Area of formwork

Information Sources

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Assignment ECA Report (in PDF format)
This report shall comprise the following:
Preliminary notes/ Introduction of ECA,
introduction to analysed project
ECA Form 1
ECA Form 2
ECA Form 3
Working sheet – e.g. dimension papers to
calculate the GFA, usable area, ancillary area,
circulation area and internal division area
Any calculation related (ex: EUQ or ext. works
and preliminaries)
Attachments/Appendix
Drawings – plan & elevation of single building, roof plan.
Summary cost of Building Elements and Final Summary of
Contract Sum
Other information if necessary 40
Can I analyse :
◦ terrace/link/semi-detached
building?
◦ shop-office?
◦ shop house?
◦ alteration works?
◦ refurbishment works?

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 If a project comprise more than one building,
how do l show the cost of preliminaries and
external works , since both is for the whole
project?

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 Preliminaries for single building can be
calculated as follows:

Cost of single building x value of preliminaries

Total building costs*

RM 350,000 x RM50,000 = RM 17,500.00

RM1,000,000

Total Building cost =Contract sum – contingencies – preliminaries.

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Project
Preliminaries =RM50,000
Total Building Cost = RM1,000,000
% of preliminaries = RM50,000 x 100 = 3.0%
RM1,000,000
Single building
Cost of single building = RM350,000
Preliminaries = RM350,000 x 5% = RM17,500.00

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 Contingencies for single building can be
calculated as follows:

Cost of single building x value of contingencies

Total building costs*

RM 350,000 x RM10,000 = RM3,500.00

RM1,000,000

* Building cost =Contract sum – contingencies

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 Cost of single building x value of project site work
Total building cost*

RM 350,000 x RM25,000 = RM8,974.36

RM975,000

Therefore, the cost of site works for the single

building is RM8,974.36

•Total building cost = Contract sum – contingencies – site work. = RM975,000

(RM1,000,000) (RM0.00) (RM25,000)

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Project
Contract Sum = RM1,000,000 (excluding contingencies &
site work)
Site work =RM25,000
Total building cost = RM1,000,000 – RM25,000
% of site work= RM25,000 x 100 = 2.564%
RM975,000
Single building
Cost of single building = RM350,000
Site work= RM350,000 x 2.564% = RM8,974.00

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 Cost of single building x value of project drainage
Total building cost*

RM 350,000 x RM30,000 = RM10,824.74

RM970,000

Therefore, the cost of drainage for the single

building is RM10,824.74

•Total building cost = Contract sum – contingencies – drainage = RM970,000

(RM1,000,000) (RM0.00) (RM30,000)

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 Can I analyse
building when the
construction project
has already been
completed?

YOU CAN
 But completed not more
than 2 years

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 I do not have the
complete resources
to prepare my ECA
because I work in a
contractor’s
company. Could l
seek external
resources?

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◦ Could I analyse building  Preferably use
that used Summary of project that used
Tender and Schedule of
BQ?
Rate (contract based on
drawing & specification)?  Otherwise, time
consuming.
 Might be difficult
for you.

DON’T WASTE YOUR PRECIOUS TIME……,

ENJOY THE INDUSTRIAL TRAINING

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◦ Could I use cost  No….you can not.
analysis forms specially
developed by my
employer?

DON’T BE LAZY……,
INDUSTRIAL TRAINING IS MAKING YOU A
BETTER PERSON
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LEARNING PROCESS NEVER END

6/15/2023 53