Construction Management Assignment 2022

Construction Management 1
CONSTRUCTION MANAGEMENT
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Construction Management 2
Assignment 1
Question 1
The most important stage in cost planning in the construction process is the B stage
(Fewings & Henjewele 2019). In this stage, the consultant comes up with a cost suggestion on
the basis of the client requirements. This gives the client a way forward in finding funds to fund
the project.
This will also allow for the pre-contract control which involves the cost controls as listed
in the RIBA work plans (Sinclair 2019). This is important as it keeps the project within the
client’s budget.
At this stage, the client or the project manager could get proposals from different
suppliers or services providers for a cost comparison. This, in addition, will provide more insight
on how the client could save money and other resources for the project. For instance, based on
the client's requirements for the hotel, there is a need for comfort for the guests in the guest
rooms. With this in mind, the client may need to call upon mechanical heating, ventilation and
air conditioning consultants to advise on various ways this could be achieved. After reviewing
the company profiles of such consultants, the client may go forth to ask for a proposal quotation
for the same.
This stage is critical as it gives a guideline for budget allocation as it clearly shows where
more resources are required in a project. It is at this stage that the client could save on cost upon
identifying some of the following aspects. First, by familiarizing with the market rates, the client
can easily ask for discounts from the suppliers and services providers. Second, upon receiving

Construction Management 3
the proposals, the client is in a position for negotiation so as to lower the budget as well as
making the bids more competitive.
Question 2
Indicative Cost
Introduction
An indicative cost is a cost generated as an estimate for a project at the initial stage to
give the client an overview of the preliminary budget (Nahman & Oelofse 2018). The indicative
cost was prepared considering the three design schemes provided and assuming that they both
had the same gross floor area. The calculation was done using a superficial method of estimating
cost. The rate was taken to be 500 Euros per square metre of floor space. This covers all the
construction costs and other services for such particular area. This is as per Australian code for
estimates and approximations for hotels and other related projects. Since the schemes are shown
as floor layouts without many details, the indicative costs are the best at this stage as they give
the client a rough idea of the total project cost. In addition, the indicative costs provide a guide to
the clients on how they stake their property during the selling or renting out using area.
Scheme A
The cost was estimated by;
The floor space = [62,500×8000×2] + [3000×20000]
Cost= floor space area ×rate
1,060,000,000/1000000×500
=530,000 Euros
Scheme B
The floor space= 1,060,159,265