The London based organisation’s guidance outlines a methodology for best practice, cost analysis and benchmarking in property projects and guides professionals through the process of analysing property project costs to ensure value for money, quality and the highest international standards are attained.
A cost analysis is an examination of the distribution of cost across the construction elements of a project and includes conceptually modelling the construction cost, construction duration and scope of works for a building.
Construction cost tends to be the key driver in the design development process and achieving value for money is likely to be a requirement of a brief. For this reason, construction cost is used as a benchmark for calculating project cost and value.
In order to fully calculate costs, the guidance note sets out a methodology of benchmarking costs, against historical projects and cost analysis structures.
It says that the process will ensure that one element is not unnecessarily under funded or under designed at the expense of another element. The note talks property professionals through how to prepare a cost analysis for a proposal, the analysis of the procurement process and the tendering process, and the need for base data for a project.
Most buildings are unique; even if two buildings look identical it is likely that there will be differences between the two. Such differences might, for example, relate to the depth and type of foundations, different types and thicknesses of floor construction, and varied specifications for wall finishes. The majority of differences are reflected in the individual construction programmes and the specific locations on a site.
‘In an age of rapid technological development and the rise of big data, conventional and well proven methods of international cost analysis and benchmarking assume a new significance. RICS has been at the forefront of construction cost data collection and analysis for over 50 years,’ said Alan Muse, RICS director of built environment.
‘This global guidance note consolidates best practice in this area and introduces the principles for establishing new systems in new markets, to improve cost prediction and project performance, around the world,’ he explained.
He added that the guidance note is globally applicable and if comprehensively completed it will assist in highlighting the key design and cost features of a project.