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Applying value management through the life of a project
Stage Objective Techniques
Concept Get the right project Benchmarking, function analysis, life-cycle costing
Feasibility Select the best option Life-cycle costing, option evaluation, risk analysis, value engineering
Design Achieve cost-effectiveness Life-cycle costing, risk reviews, value engineering
Construction Optimise supply-chain efficiency Value-based advice, value engineering
Use Continuous improvement Life-cycle cost comparisons, surveys, value-engineering operations
Cost summary
element cost % of total cost
Demolitions and alterations 30 500 3.25
Shell construction 81 500 8.68
Extension Item @ £50 000  
Replacement roof to existing Item @ £31 500  
Internal finishes 47 000 5.01
Internal finishes generally Item @ £32 000  
Metalwork Item @ £1000  
Painting and decorating Item @ £14 000  
Fixtures and fittings 464 500 49.49
Carpentry and joinery Item @ £62 500  
Furniture and fittings Item @ £48 000  
Direct contracts for furniture and fittings Item @ £109 000  
Direct contracts for bar, cellar and catering equipment Item @ £245 000  
Mechanical services 54 500 5.81
Sanitary fittings Item @ £8000  
Plumbing installation Item @ £8500  
Heating installation Item @ £13 000  
Ventilation and air-conditioning Item @ £23 500  
Gas installation Item @ £1500  
Electrical services 30 000 3.2
Electrical services generally Item @ £30 000  
External works 230 500 24.56
Signage and advertising Item @ £17 000  
External works, car parks and landscaping Item @ £186 500  
Drainage and water treatment Item @ £27 000  
Total construction cost 938 500 100
Functional cost breakdown
element cost % of total cost
Function 1: Attract customers 424 500 45.23
Demolitions and alterations Item @ £5500  
Shell construction – new build Item @ £15 000  
Shell construction – replacement roofing Item @ £11 500  
Internal finishes – generally Item @ £21 000  
Internal finishes – painting and decorating Item @ £7000  
Furniture and fittings – carpentry and joinery Item @ £32 000  
Furniture and fittings – generally Item @ £5000  
Furniture and fittings – direct contracts for furniture and fittings Item @ £109 000  
Furniture and fittings – direct contracts for bar, cellar and kitchen equipment Item @ £57 500  
Electrical services – generally Item @ £4000  
External works – advertising and signage Item @ £17 000  
External works – car parks and landscaping Item @ £140 000  
Function 2: Attract and retain staff 32 100 3.42
Demolitions and alterations Item @ £8500  
Internal finishes – generally Item @ £3000  
Furniture and fittings – carpentry and joinery Item @ £1000  
Furniture and fittings – direct contracts for bar, cellar and kitchen equipment Item @ £10 400  
Mechanical services – sanitary fittings Item @ £1500  
External works – car parks and landscaping Item @ £7700  
Function 3: Encourage spend 124 300 13.24
Demolitions and alterations Item @ £5000  
Shell construction – new build Item @ £30 000  
Internal finishes – metalwork Item @ £1000  
Furniture and fittings – carpentry and joinery Item @ £16 500  
Furniture and fittings – generally Item @ £32 000  
Furniture and fittings – direct contracts for bar, cellar and kitchen equipment Item @ £3600  
Mechanical services – heating Item @ £7000  
Mechanical services – ventilation and air-conditioning Item @ £7000  
Electrical services – generally Item @ £16 000  
External works – car parks and landscaping Item @ £6200  
Function 4: Satisfy legal constraints 71 500 7.62
Shell construction – replacement roofing Item @ £10 000  
Internal finishes – generally Item @ £5000  
Internal finishes – painting and decorating Item @ £1000  
Furniture and fittings – carpentry and joinery Item @ £5000  
Furniture and fittings – direct contracts for bar, cellar and kitchen equipment Item @ £25 500  
Mechanical services – sanitary fittings Item @ £3000  
Mechanical services – plumbing Item @ £1000  
Mechanical services – ventilation and air-conditioning Item @ £6000  
External works – drainage and water treatment Item @ £15 000  
Function 5: Enable ease of operation 158 000 16.84
Demolitions and alterations Item @ £8000  
Internal finishes – generally Item @ £1000  
Furniture and fittings – generally Item @ £3000  
Furniture and fittings – carpentry and joinery Item @ £1000  
Furniture and fittings – direct contracts for bar, cellar and kitchen equipment Item @ £80 000  
Mechanical services – sanitary fittings Item @ £3500  
Mechanical services – plumbing Item @ £7500  
Mechanical services – heating Item @ £3000  
Mechanical services – ventilation and air-conditioning Item @ £6500  
Mechanical services – gas installation Item @ £1500  
Electrical services – generally Item @ £3000  
External works – car parks and landscaping Item @ £28 000  
External works – drainage and water treatment Item @ £12 000  
Function 6: Minimise operational and maintenance costs 128 100 13.65
Demolitions and alterations Item @ £3500  
Shell construction – new build Item @ £5000  
Shell construction – replacement roofing Item @ £10 000  
Internal finishes – generally Item @ £2000  
Internal finishes – painting and decorating Item @ £6000  
Furniture and fittings – carpentry and joinery Item @ £7000  
Furniture and fittings – generally Item @ £8000  
Furniture and fittings – direct contracts for bar, cellar and kitchen equipment Item @ £68 000  
Mechanical services – heating Item @ £3000  
Mechanical services – ventilation and air-conditioning Item @ £4000  
Electrical services – generally Item @ £7000  
External works – car parks and landscaping Item @ £4600  
Total construction cost 938 500 100