Budget, three ways

Bouwdata

Dec 4, 2024

Budget, three ways

Anyone who occasionally watches Masterchef is undoubtedly familiar with the term ‘three ways’ popular there. It means that a dish contains an ingredient prepared in three different ways. We can apply the same, strangely enough, to budget management in the construction industry.

To understand this strange quirk, we need to identify the knowledge needs of each construction partner. If we were to ask each of them to make a bill of quantities, we would get different perspectives.


DEVELOPMENT

An investor will look at his budget in terms of sales or rentals. 

If, for example, the cost of an underground storey is more than what the garage boxes, pitches and individual storerooms in it yield, they will throw it out of the schedule of requirements.

What standard can help them to bring structure to their data?

In terms of measurements, NBN EN 15221-6 Facility Management – Part 6: Area and Space Measurements in Facility Management is the most appropriate way to go. On the one hand because it is a European-based standard but even more so because it has no rounding rules like NBN B06-002 – useful in the days when we were still manually bent over a paper plan with a ruler but counterproductive when working with dwg’s or using BIM software. 

Based on this standard, two objective criteria can be formulated towards designers:

  • The ratio between Level Area and Net Room Area – here 15% is an adequate ratio

The ratio between Net Room Area and Primary Area – i.e. the % of the net floor area that should effectively generate income

OBJECT

A designer works from coarse to fine, top-down and has his/her focus on ‘function’.

For example, if he/she removes a window from his/her design, then, in an ideal world, along with this window, all related costs should also disappear. So also the lintel above it in the inner leaf, the L-iron sustaining the facing bricks, the inside plastering and painting of the opening, the natural stone sill on the outside, etc.

What standard can get them started to bring structure to their data?

Here, for the design and construction phase, Europe unfortunately offers no answer 1 but we can find answers in the Netherlands. They have NEN 2699 Investment and operating costs of property – Terminology and classification.

The advantage is that, at level 4 – elements, we discern the main classification of table 1 of the SfB. And if there is a little adhesion for anything in Belgium, it is this standard, that C3A heavily promoted late last century to name layers in dwg files.

Moreover, at the end of December 2019, STABU, which manages the SfB in the Netherlands, reviewed the MEP section and provided a new version.

Only drawback: regarding the use phase of the building, they do not match the European Facility Standard.

But this is extremely easy to solve by replacing section X in NEN 2699 with NBN EN 15221-4 Facility Management – Part 4: Taxonomy, Classification and Structures in Facility Management and in turn eliminating the line ‘Building Initial performance’.

Both combined, subject to a few ‘common sense’ additions, provides designers with a perfect checklist suitable for benchmarking across the entire Life Cycle Cost.

1 The reason why in 2008, with the support of the then IWT, I started BouwData© as a pre-normative research vehicle.

MATERIAL

A contractor assembles small pieces into a bigger whole; in other words, he/she works bottom-up and focuses on ‘materialisation’. An ideal bill of quantity for him/her is therefore much like a shopping list, preferably in the order of what needs to arrive on site first.

What standard can hep them bring structure into their data?

In Belgium, the VMSW specifications system is often used for this purpose. The disadvantage is that this is written for social housing, moreover every architect has made his own version of it.

In the Netherlands, they use the STABU2 systematics that, e.g. in combination with a 2 to 4 letter combination, can form a framework for

  • technical documentation and interesting quotations to be kept in document management systems
  • Contact details of suppliers and subcontractors in CRM systems
  • coding of resources and activities in calculation software

coding of workresults when doing budget control via Earned Value Management

.
ADMINISTRATION & FINANCE

Mastering and interacting between all three aspects mentioned above is, to use a culinary term, not a ‘Side Dish’ you can just push into the architect’s plate.

This is an expertise in itself with a psychological component that should not be underestimated!

Unfortunately, this is not (yet) a scientifically based branch in higher education or at universities.

Why?

It cannot be assigned to one traditional category such as applied sciences, economics, psychology or law.

In addition, until now, it has always been assumed that software would automate ‘administration & finance’ in such a way that it would ‘automatically’ do so.

Unfortunately, nothing could be further from the truth. Any project manager will be able to tell you that a well-organised site secretary is worth its weight in gold.

Is this a tragedy?

Not really because, just as the architect will have to reinvent himself in the New Normal, education will also have to do so ánd people will have to find their way to complement software with human skills instead of seeing it as a sanctifying substitute.

Will we ever take administration & finance seriously?

Hopefully so because it would leave room for other building partners to focus on their core business.

For more information on Administration & Finance in construction projects: www.bouwdata.net

1 De reden waarom ik in 2008, met de steun van het toenmalige IWT, BouwData©
als pre-normatief research vehikel gestart ben.

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