Project Cost Estimating



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    Joseph Petrarca

    First of all... LCC is a completely separate topic. That's a tool for owner's team to make decisions on systems or assemblies prior to inclusion in the drawing set and so definitely prior to cost estimating.

    There's fuzzy thinking in NCARB land about cost estimating in my opinion- having been practicing for 27 years.

    NCARB often prefaces a question like "You are preparing a Cost Estimate for the project...."
    It is very risky for an average Architect to prepare cost estimates except at the most rudimentary level in pre-design or schematic design. It is most prudent to hire or have the owner hire (or BOTH!) a professional cost estimator who does this every day and is experienced with all aspects including market fluctuations, trade availability, materials cost trends, project management and phasing... Etc.
    That cost estimate will include all divisions for construction. The entire cost estimate is for CONSTRUCTION, not the PROJECT typically. This is a big distinction. The Construction Cost includes everything to construct the building from permits to punch list. These are known as Hard Costs. The cost estimate dies NOT include (usually) Soft Costs. These are costs that are typically paid for by the owner and not directly part of the Construction Cost. They include
    Arch and engineering (A&E) Fees
    Financing Costs
    Legal Fees
    Haz Mats testing and abatement
    Soil and geotechnical testing and reports
    Traffic studies
    And so forth

    So now you have a handle on Soft Costs and Hard Costs. Hard Costs are defined by the construction costs estimate. (And by bid/contract)
    PROJECT COSTS... includes everything to get the Project completed.. not just the construction. Project Costs include some of the Soft Costs. The Project Budget can be prepared and revised as needed by the Architect especially in smaller projects or very early in the process. But on larger and more professionally-managed projects, this will be handled by an Owners Project Representative. A third party also hired by the Owner but not contractually linked to the Architect in any way.

    The Project Costs will include
    All Hard Costs.... The bottom line on the Construction Cost Estimate
    A&E Fees
    Testing (during construction)
    Clerk of the Works
    Traffic studies
    Financing Costs ( sometimes)
    Contingencies.... There are multiple
    And Commissioning

    Usually asbestos and other hazmats testing and abatement are COMPLETELY out if the scope of architectual and construction work. Totally separate process, contracts and management by the owner exclusively. (Due to insurance risk)

    FF&E is usually part of the Project Cost and not part of the Construction Cost/Cost Estimate. But that varies. A client who is doing a large office fitup will probably be glad to have FFE inuded and managed as just another component of the design and construction contracts...unless they have their own in-house departments that manage this.

    Hope that answers your questions.

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    David Kaplan

    My vote is that the answer is FF&E.  This is typically provided by the Owner directly.

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    Joseph Petrarca

    That's true, but if that's how the question is phrased.... It is definitely Life Cycle Cost. Although the FFE is USUALLY not part of a cost estimate... If the owner asked for it, it easily could be. What definitely is NOT part of a cost estimate is Life Cycle Costing.

    What would that even be like? HVAC... ducting.... $673,000 less salvage cost.... 5,000 is $668,000 over ten years is $66,800 per year? That's crazy. That is not how a cost estimate works. That's an analysis tool for an owner to figure out payback or tax depreciation.

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