Tuesday, 25 June 2013

Management of Cost Estimation in Post Disaster Renovation Projects

The facilities in most of the countries have been built about 75 to 100 years back. All structures have a definite life and require renovation/refurbishment after a certain period of time to upkeep the structure/facilities running. This results in the need of the renovation sector, which may include works in any of the civil and infrastructure facilities around. The present trend of renovation works can be observed in Figure 1, which depicts that there is a constant need of this sector as compared to the new construction works taking place.


Figure 1 New building works vs. renovation works
(Source: Green, building.co.uk, 2012)

However, the renovation projects are not composed of simple construction works and generally need to have an integration of the construction activities with the ongoing building operations and the surrounding environment. This calls for special attention from all the stakeholders involved in the projects. Nonetheless, though there have been theoretical developments in this front regarding scheduling of activities in the renovation projects (Whiteman, 1987; Whiteman and Irwig, 1988), the basic framework is also not practically followed in most projects, without any consideration for special requirements.

This lack/ minimal use of framework or technique in the practical scenario leads to untoward situations during the execution stage, thus, leading to lot of changes and modifications, known as additional works and/ or variation orders, which could lead to claims.

The pricing of the activities in the execution stage are also not given proper consideration in many projects. This is much more prominent for the indirect work activities, the price for which are generally established as a percentage of the entire direct cost, similar to those in the new construction projects, though in the real scenario both of these are quite varied. Proper care should be taken to clearly estimate the pricing of each activity, including both direct and indirect costs. This estimate needs to start early in the project, to have a better idea of the required budget and feasibility of the project based on the available budget. In most cases, due to lack of a proper procedure to estimate the cost values, the projects go over-budget, putting forward negative impacts.

The renovation industry is a new commercially active sector, and there has been little research on these in comparison to the new construction works. Moreover, there is minimal research available on the cost estimation process exclusively for the renovation projects due to the inaccurate and non-standardised pricing and accounting of the works. This area, thus, need to be studied properly, to eliminate escalated prices in work and encourage more contractors for diversification into this subsector. Hence, in order to explore solutions to the above mentioned issues, Ms. Nishat Farhin Islam made a study aimed to:
(1) identify the unique features in renovation projects those need to be considered during the estimation process.
(2) develop a framework for cost estimation in renovation projects and analyze each stage of a renovation construction project in details.
(3) determine improvement measures that can be brought in the estimation process of the case study and provide recommendations as per research and for further study.

Conclusions

 1. Unique features in renovation projects to be considered during estimation

 The first objective of the study dealt with the identification of the unique features in renovation projects that were required to be considered for the estimation process of the same. To achieve this objective, extensive literature review was done by using varied sources of conference papers, journals, books, previous theses, etc for understanding the whole process of renovation projects, basically building works. To understand the concepts conceived from the literature review regarding renovation works, pre-surveys and data were collected through a case study. Literature review was carried out simultaneously to understand the general estimation procedures followed in various construction projects. This led to the findings on the key features of both renovation projects and estimation procedures. These were then studied together and combined to finally derive the 9 unique features of renovation projects that affect estimation, and thus, need to be considered during the estimation process.

Hence, the first objective of the research study was achieved and has been detailed in Table 1. The results of this were then used to carry out the second objective of framework development.





2. Development of estimation framework for renovation projects and analysis of each stage in details

The results of the first objective and the concepts and data available during the process of achieving the first objective were then used to develop an estimation framework which could be exclusively used in renovation projects to have better projection of costs and minimise cost escalations towards the end of the project. The framework developed was then checked and validated by three (3) experts with experience of working in renovation projects. Considering the comments and practical advice from the experts, the framework was then modified to be clear and consider all the aspects. The framework was divided into the five (5) major stages of a construction project. These were then detailed out for each of the stages and compared with the process followed in the stages of the case study considered.

The case consisted of various projects and for the research study, only 6 projects were considered based on the completeness of available data and observations on-site that were available. The loopholes and inadequacies of the case and the effects of these were then noted.

The second objective was, hence, achieved and the loopholes in the projects were listed down to be considered for the next objective.

3. Improvement measures to be brought in the estimation process of the case study

The loopholes and inadequacies that were observed during the study of the earlier objective were listed along with the positive features that were noticed in the case study. The negative features were then supported by the recommendations for improvements that need to be brought in the projects. These are comprehensively presented in Table 2. The recommendations as per the research and the recommendations for further study shall be discussed in the following section, which then completes the third objective of our research study.


Recommendations as per research study

As per the research study conducted, there are certain recommendations for consideration during any renovation project. These have been observed during the fulfillment of the objectives and understanding of concepts and can be listed as follows:

a      -  During the renovation projects, exploratory demolition should be considered as one of the most important steps to understand the conditions of the existing structures and then narrowing on the scope of renovation of the considered structure. This also minimizes the costs of activities in the later stages of the project and the additional works and/ or variation orders reduces to a negligible amount unless there are certain drastic change of plans during the course of the project.

b   - As-built drawings of each building, at least for those with longer design life, should be preserved for any renovation works in future. As-built drawing s are very important to understand the present systems in the building structure, so that the renovation works plans could be carried out accordingly and, thus, reducing the pressure on detailed designs, which are very difficult to be prepared for a completed structure without any proper information.

c   -  Detailed design inspection and/or evaluation should be necessarily conducted by the contractors during the pre-construction stage to remove the discrepancies left by the consultants, if any, and check the quantity takeoffs very accurately.

Her thesis abstract is copied below.

Abstract

Renovation works is a prominent sub-sector of the construction industry in today’s world due the extensive improvement works required in the various structures all around. The design life of a building is generally 50 to 100 years and, thus, renovation works are necessary around every 20 years, figures indicating that especially green renovation is expected to increase to around 90%. However, the renovation sub sector is very unsafe due to the various unique features and unseen conditions. In addition, most of the renovation activities are required to be carried out in buildings with ongoing business or operations, which pose safety and other risks, thus, increasing the time and cost of the projects. The cost estimation works of these projects need to be carried out very carefully in a detailed manner considering all the unique features of renovation. Cost estimation of any project should be very accurate to avoid cost escalations towards the end of the project which would add to the burden of the owner and also lead to claims and disputes in many cases.

Hence, a proper framework for cost estimation for renovation project was developed during the study. A case study with multiple projects was conducted to understand the practical scenario and conceptualise the information from literature review, leading to the framework. Each stage of the renovation projects in the case was then studied in details. The positive and negative features were also observed and improvements measures were suggested.

Keywords: Renovation projects, cost estimation, exploratory demolition, as-built drawings













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