Reliable sources of building cost information are essential to any good cost management practice. Quantity surveyors need accurate data for developing reliable cost plans and preliminary cost estimates during the early phases of the design.
When you need data, it is a good practice to refer to your in-house databases. Whether it is unit rates for pricing a bill of quantities, or elemental building costs for carrying out a cost analysis, building your cost databases is the most reliable practice of keeping and sourcing for building cost information.
However, when you have limited time and need to price a bill of quantities, where do you start? Where do you get the rates?
The following sources can be of help. Let’s explore them in detail.
Sources of Building Cost information in Kenya
The need to provide very accurate cost estimates is driving the need for accurate cost databases for use in pricing. Building cost information can be obtained from the following sources:
1. Building Up Your Rates
Building up unit rates from scratch is the most reliable way of generating building cost information for use in your projects. The accuracy of the information is guaranteed as this process uses the most up-to-date data.
I recommend adopting this method for your projects.
You will need to collect market data on the retailing prices of materials and goods, transportation costs, cost of labour, machine and equipment costs and hiring charges, then add a percentage for the contractor’s profits and overheads.
2. Tender Bills for Past Similar Projects
Also, tender bills of quantities for a past similar project can be relied on as a source of building cost information. These bills of quantities are prepared following a nationally recognised standard method of measurement (SMM). This allows for standardization and easy comparisons.
Further, a tender bill of quantities reflects the market rates and contractors’ view of the financial commitments required to execute the project. Unit rates from these can be manipulated to account for price and location changes to come up with reliable data for pricing a tender for a current project.
Also, it is used to generate reliable elemental cost analyses for preparing cost plans for a similar proposed project.
3. Trade Journals and Magazines
Trade journals and magazines can also be good sources of building cost information.
Journals such as “The Quantity Surveyor”, published by the Institute of Quantity Surveyors of Kenya used to have a section with average building costs per square metre of built-up area. You will need to confirm if they still do that with the journal now that they publish and sell a separate cost handbook.
4. Cost Handbooks
Professional bodies, such as the Institute of Quantity Surveyors of Kenya (IQSK) and government departments, such as the State Department for Public Works, produce and sell cost handbooks.
Due to their extensive professional networks, they can collect as much information as possible and process it to come up with average construction rates in the county.
The rates are presented as unit rates for a common bill of quantities of items and materials and average construction rates per square metre of built-up area. This is very useful both in the early stages of the project’s development and during the tendering stage when pricing a bid.
To obtain a copy of the IQSK cost handbook, please visit the institute’s office at Blue Violets Plaza, Ngong Road – Nairobi, Kenya. Here’s a link to their official website for more information.
5. Quotations from Suppliers
Also, you can ask potential suppliers to send you quotations for the supply of building materials, components and appliances. They will be very careful in pricing this as it reflects what they will get paid if they are contracted to supply these materials to the project.
I have used this source, especially when costing specialist items that I had never encountered in a past project.
This data reflects the prevailing market prices. With a little manipulation, it can be processed to suit the specific need of the quantity surveyor, contractor or estimator.
6. Pricing Data from Manufacturer’s Product Catalogues
Product and component manufacturers create and distribute product catalogues. The catalogues have very important specification and cost data that you can use to come up with pricing data for your projects.
Most catalogues have wholesale selling prices indicated there if you were to buy these products directly from the factory or the company’s direct outlets.
You can pick these prices and add markup for transportation, profits and overheads or sometimes excise duty if imported, to come up with a reasonable cost estimate for your project.
We have seen that reliable and accurate cost information is essential for a quantity surveyor or contractor in pricing projects. Therefore, developing and continually updating an in-house cost database is a good practice.
Where an in-house cost database is not available, you can source information from third parties and customise it to suit your required use.
This can be done by extracting pricing information from past tender bills of quantities, from journals and cost handbooks such as those published by the Institute of Quantity Surveyors of Kenya, from quotations from potential suppliers, or by extracting pricing data from manufacturers’ product catalogues.
What other sources have you been relying on in your practice? Let us know in the comment section below.