Job Book 9th Edition - Book - Page 133
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Stage 1 > Preparation and Brief: Supplementary Material: 1/SM7
1/SM7: Financial appraisal
The financial appraisal is usually prepared by the cost consultant. The cost
consultant is the expert on costs, and can call on the Royal Institution of Chartered
Surveyors (RICS) or other information service, as well as their own knowledge
and expertise. Such an appraisal could be a document to be developed as the
design progresses and form a basis for effective cost planning.
However, on a small project where no cost consultant is appointed the architect
may have to write an appraisal for inclusion in the feasibility report. This is likely
to be little more than an estimate to test the viability of the client’s budget figure.
A proper cost plan will need to be developed later.
Where the architect undertakes to prepare this appraisal, the approach should
be as follows.
Define status
Define the status of the appraisal and set out the assumptions on which estimates
are made. List any items of important information which were not available, and
any items for which no allowance has been made.
State basis for estimates
State the basis for estimates (e.g. cost indices, £ per square metre, etc.) on current
or predicted rates (if projected, to what date).
Estimate capital cost
When estimating the capital cost of the building project, consider:
• location (e.g. whether remote) and access (e.g. a difficult, tight site)
• site investigation and abnormal site works
• demolition or preliminary contracts for enabling works
• programme and phasing
• building substructure and superstructure (e.g. systems, cladding)
• finishes (e.g. expensive or standard)
• engineering services installations
• designers’ and contractors’ contingencies
• fitting out and furnishings
• landscape treatment – both hard and soft, including planting.
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