The SFCA and the NRM

1. The SFCA and the NRM Joe Martin, Executive Director BCIS

4. SFCA Standard Form of Cost Analysis Principles Instructions and Definitions

5. NRM New Rules of Measurement Order of cost estimating and elemental cost planning

6. SFCA and NRM The titles of these documents indicate their purpose: The SFCA sets out how to analyse the cost of a project into elements. The NRM sets out how to present and develop a cost plan as the design develops.

7. SFCA and NRM These two processes are the beginning and the end of the cycle of cost information that flows through a procurement process. The starting point for an elemental order of cost estimate is cost analyses of previous projects. The starting point for a cost analysis is the costing documents from a procurement process. There is clearly a chicken and egg relationship.

8. When Adam delved and Eve span

9. Flow of cost information

10. SFCA and BCIS The SFCA, and indeed BCIS, were developed to facilitate the move from ‘costing a design, to designing to a cost’ For that you need elemental costs An element is ‘A major physical part of a building that fulfils a specific function, or functions, irrespective of its design specification or construction.’

11. SFCA The SFCA defines the Elements and provides instructions for analysing the costs of a project into Elements and defines the ancillary project information needed to interpret it. It defines the purpose of a cost analysis as ‘to provide data that allows comparisons to be made between the costs of achieving various building functions in a project with those of achieving equivalent functions in other projects. It is the analysis of a building in terms of its elements.’

12. SFCA The key point is that the content of the functional Elements as defined in the SFCA should not change with the design or specification.

13. Elemental cost analyses Why are elemental costs useful? Because they can provide a basis for providing a client a robust estimate based on very little information at a level that helps define the assumption that you have made And can be based on:

14. Elemental cost analyses Schedule of accommodation 2000m2 offices Canteen for 200 people 300m2 gallery space Auditorium for 300 people Two shops

15. Elemental cost analyses A ‘sketch’ designs

16. NRM The NRM: provides a structured basis for preparing ‘order of cost estimates’ and ‘elemental cost plans’ including all the costs and allowances forming part of the cost of the building to the client but which are not reflected in the measurable building work.

17. NRM Order of cost estimate: The determination of possible cost of a building early in design stage in relation to the employer’s fundamental requirements. This takes place prior to preparation of full set of working drawings or bill of quantities and forms the initial build up to the cost planning process

18. NRM Elemental Cost Plan: The critical breakdown of the cost limit for the building into cost targets for each element of the building. It provides a statement of how the design team proposes to distribute the available budget among the elements of the building, and a frame of reference from which to develop the design and maintain cost control.

19. SFCA and NRM So far so good. The starting point for the NRM was the SFCA elemental definitions, which define the physical building. The practical issues involved in pricing a design as it develops and in presenting the rules the NRM means that the presentation of the two documents are different. However some effort was made to ensure that the two structures are compatible

20. So what are the differences The differences are: NRM covers the non-physical aspects of a project that the client may require as part of his overall budget for the project, while the SFCA relates to the physical construction and contractors charges. Pragmatic changes to presentation and allocation Different coding system.

21. NRM Guidance on pricing the non-physical aspects of a project that the client may require as part of his overall budget for the project eg: Main contractors preliminaries Contractors overheads and profit Project/design team fees Other development/project costs, eg insurance, planning fees, decanting and Section 106 agreement contributions Risk allowances Inflation Value Added Tax Other considerations eg Capital Allowances, Land remediation allowances and Grants

22. Presentation and allocation NRM also introduction some pragmatic changes to the familiar SFCA list of elements: The purely presentational issues Introduction of designed elements and sub-elements Splitting Facilitating works and External works Introducing non-element cost category for off-site constructed buildings Practical pricing issue relating to procurement that moves the structure away from elements towards packages. Editorial changes

23. presentational issue NRM presents the rules in a table with three levels To reducing the white space in the tables some SFCA sub-elements are presented at level 2 rather than level 3 For example in the SFCA Substructure is an element but is also a group element. In NRM the sub-elements are presented at level 2 and further broken down at level 3.

24. Designed elements At level 3 the structure is expanded to incorporate design and specification eg:

25. External works External works split into: Work to existing buildings External works Facilitating works

26. Off-site construction Complete buildings and building units Prefabricated buildings – complete buildings Prefabricated buildings – building units

27. Pricing and packages Practical pricing issue relating to procurement that moves the structure away from elements towards packages eg: ‘Façade retention’ is included with demolitions as it will be procured as part of the demolition package. ‘Work to existing buildings’ covers work all work to existing not just work to adjacent buildings. Podium slabs forming roofs to basements are included in upper floors Drainage under the building in substructure Testing and commissioning of individual service installations separated from installations

28. Coding The SFCA has a numeric/alpha/numeric coding eg 2F1 External windows The NRM structure uses a numeric/numeric/numeric coding eg 2.6.1 External windows This will help to differentiate between the two.

29. The circle of cost information Project costs reported in the format of the NRM measurement rules can easily form the basis of the and SFCA elemental cost analysis. Elemental cost analyses provides the initial costs to inform an elemental order of cost estimate before the design exists. This can be developed following the NRM guidance as the design develops and, where the resultant cost plan forms the basis of the contract sum analysis, it can be re-analysed into functional Elements.

30. NRM Contents Order of cost estimating and elemental cost planning in context of: RIBA Plan of Work OGC Gateway review process

31. Estimate and cost plan stages

32. NRM – order of cost estimate Rules for order of cost estimating Information required Constituents Measurement rules Floor area Functional units Elements – floor area, Element unit quantities Updating historic costs Preliminaries Contractors overheads and profit

33. NRM – order of cost estimate Rules for order of cost estimating Fees Other development costs Risk allowances Inflation VAT Other considerations Reporting

34. NRM – cost planning Rules for elemental cost planning Purpose Constituents Formal cost planning stages Reviewing and approving cost plans Cost control Multiple buildings Information requirements Updating historic costs

35. NRM – cost planning Rules for elemental cost planning Preliminaries Contractors overheads and profit Fees Other development costs Risk allowances Inflation VAT Other considerations Reporting

36. Measurement rules Structure of rules Sub element Component Unit Measurement rules for components Included Excluded

37. Measurement rules Component: strip foundation: details, including depth of foundation, to be stated Unit: m Measurement rule: linear length of component is measure on centre line of the component

38. NRM - Appendices Appendices include: Information requirements for formal cost plans Templates for cost plans

39. NRM For RICS members it can be downloaded from RICS website

40. As the meerkat says Is simples!

41. The SFCA and the NRM Joe Martin, Executive Director BCIS