Cost Engineering Under Uncertainty - Price Forecasting Vocabulary

Vocabulary flashcards covering core cost engineering terms, estimation methods, building rate exclusions, and financial provisions from Price Forecasting Part 5.1 and Part 5.2.

Rate/m²-on-plan method

The most widely used and quick method to obtain an indication of the construction cost of a building, also referred to as the 'order of magnitude' method of cost estimation.

SAPOA

South African Property Owners' Association, publisher of the Method for Measuring Floor Areas in Buildings, Second Edition (effective 7 November 2007).

Standard exclusions from building rates

Costs of site infrastructure development, parking, any future escalation, loss of interest, professional fees, and value-added tax (VAT).

Inward trading retail centres

Retail developments such as regional centres ($50,000 - 100,000\text{m}^2$) and super regional centres (exceeding $100,000\text{m}^2$) that feature internal malls.

Outward trading retail centres

Retail developments such as convenience, neighbourhood, and community centres that operate with no internal malls.

FF&E

Furniture, fittings and equipment; allowances included in building rates for hotels and student residential properties, but excluded from hospital rates.

PIDS

Perimeter Intrusion Detection System, incorporated into cost rates for airport perimeter walls and security fencing.

Electronic installation scope

Building services installation encompassing access control, CCTV, public address, fire detection, data installation, WiFi, CATV, PABX, and Building Management System (BMS).

PABX

Private Automatic Branch Exchange, classified under electronic installations in building services cost estimates.

Contingency

An allowance for unforeseen items, such as the cost to remove underground pipes encountered during excavation that were not indicated on as-built drawings.

Prime cost items

The specific cost allowance covering only the material itself (e.g., $R400\text{/m}^2$ for tiles), excluding contractor labour, profit, and fixing costs.

Provisional sums

Allowances for work intended for subcontractors, typically involving specialist operations such as electrical and mechanical installations.

Variations

Any modification that alters the scope of works, such as changing a planned single-storey house into a double-storey house.

Concrete unit rate components

The combined elements making up a unit rate for reinforced concrete, consisting of materials (concrete, transport, pump, spacer blocks), labour, transport, wastage, and profit.

Quantity surveyor

A construction professional specializing in the procurement, contract, and cost management of projects.