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2. Cost plan stages

The following briefly describes the capital cost plan estimates and relevant stages of the project.

Cost plan A - master plan study

The master plan study based on an approved service plan identifies broad scope of works entailing new, alteration, external and any major service or site-specific issues including property acquisition. Refer to the master plan studies guideline.

Due to the very nature of information available, cost plan A is developed in conjunction with floor area schedules and should be based on data gathered from other similar projects, surveys of existing conditions and major project specific issues such as the suitability, age and condition of existing facilities, including upgrade of site services, asbestos removal, topography, heritage issues and so on.

Cost plan B - feasibility study

The feasibility study provides more detailed information on the preferred development option and therefore the cost plan reflects a more project specific influence on cost estimates. However, cost plan B is still fundamentally based on floor area schedules.

As part of the preliminary cost data a brief specification shall be prepared covering the following topics upon which estimates have been based:

  • type of foundation
  • structural frame system
  • external enclosure
  • materials
  • roof system
  • type of internal subdivision
  • general quality of finishes
  • extent of built-in fittings
  • electrical and mechanical services and general servicing principles, that is, central or localised plant, distribution by vertical duct, horizontal duct, ceiling plenum or other
  • special site conditions, e.g. level of redundancy for critical infrastructure
  • specific exclusions.

Cost plan C1 - schematic design

The schematic design (SD) stage is often the most critical cost estimate as SD sets out the approved scope of works, budget (limit of cost) and recurrent operating costs. There will be no increase of funds for a project once SD is approved unless a formal proposal is put to the government.

Capital cost data shall be prepared by measuring from drawings and pricing the resultant quantities. This cost plan is prepared in sub-elemental detail and in accordance with the described procedure.

Functional area costs are to be prepared for each department functional area or health planning unit nominated in the area schedule (see Appendix D: sample list of functional groups). This can then give a total project budget when added together with costs for:

  • data for civil and site works
  • furniture
  • equipment and professional fees
  • mechanical and electrical cost breakdowns
  • ICT.

Preliminary lists of furniture and equipment may need to be prepared.

The Department of Health will review cost data in conjunction with the related area schedule.

At the completion of SD, a limit of cost estimate (cost plan C) can be prepared. Following agreement by the department, this becomes the agreed cost plan for the remainder of the project. Cash flows can also be prepared separately for the implementation of the project including building works, fees and equipment / other.

Cost plan C2 - design development

Cost plan C2 is based on more detailed data provided by the consultant team. It is undertaken to confirm cost plan C1 and, where necessary, a proactive tool in maintaining or identifying cost savings.

Cost planning for C2 is similar to that for cost plan C1. Where a variance occurs between C2 and C1, a comprehensive reconciliation statement is required together with an action plan to reduce costs if the project is over budget.

Cost plan D - contract documentation

Cost plan D is prepared using the full compilation of contract documents (drawings and specifications) and must be completed prior to tendering.

Cost data is prepared by measuring and pricing all works and services, generally based on measured quantities. It is presented in sub-elemental form as in the previous stage and may include indicative cash flows separated for building works, fees and equipment/other.

Where deviation occurs between elemental or functional costs and the prior agreed cost plan, a comprehensive reconciliation statement is required.

Where a bill of quantities is required (generally for projects over $5-10 million and for selected projects in the range $2 million to $5 million), items must be sub-elementally coded.

Pre tender cost

The quantity surveyor is to review final contract documentation and warrant that the estimates for the capital project and required contingencies and allowances are within the allocated budget. This assurance is to be provided to the department prior to tendering commencement.