‘Cost Solutions’ Sept ’13: Gratis Depreciation Allowances and Write-off

Luke Anthony has contributed to our September 2013 edition of our Cost Solutions newsletter. In this article Luke discusses Gratis Depreciation Allowances and Write-off and how it works for the tenant and landlord.

To read the article in its entirety please click here.

For more information, please contact Luke Anthony or Richard Ortmans on 1800 808 289.

The second article published in our September edition of Cost Solutions comes from Darryl Bird (Partner & 5D Quantity Surveyor).

Darryl reveals what it takes to secure finance for your development project and also talks about the key areas that help you demonstrate your depth of knowledge to your financier to form a distinct advantage in your finance application.

To read the article in full please follow this link.

For more information please contact Darryl BirdShane Brandtman, 02 9541 5000

Last week (22/8/13) The LOD Specification was released in its final draft by the BIMForum and it is a very worthy guide to consider. It was written under agreement with the American Institute of Architects and it looks at the detail of what it is that you’re designing and what it can be used for.

“We want everyone to have the same understanding about how much information should go into each element of a building model, and for what uses those models are suitable,” – Dmitri Alferieff, director of the BIMForum.

What I find interesting about this guide is that:

  • It uses descriptions and images so that designers can define the model uses and limitations to downstream users.
  • For contractors it introduces an additional LOD – 350 as well as the basic LOD definitions developed by the AIA for the AIA G202-2013 Building Information Modeling Protocol Form.
  • The information is organised by CSI Uniformat 2010 codes. If this guide successfully gains traction around the globe then it is logical that Uniformat will become the preeminent international classification system.

The intention of ‘LOD 350’ is to enable elements to be sufficiently developed to allow proper coordination of disciplines (e.g. clash detection/avoidance, layout, etc…). This concept resonated with me because it provides guidance to contractors and subcontractors on the improvements that are required to develop a “for tender or bid” model into a ‘for construction” model. This concept can be applied to any procurement method even hard dollar (design – bid – build) contracts by adopting the “Plan to Build” model which you can see below:

From my 5D perspective BIMForum have pretty much gotten it right, except I would have preferred to have seen rebar contained within LOD 350 rather than LOD 400 because reinforcement supply costs often blow out by large margins and this isn’t evident until the last bar is delivered. Rebar that is modeled at the outset of construction is very easy to track financially.

It was promising to see that the BrisBIM event last week was well attended. To me this highlights a growing interest in BIM across multiple disciplines from Cost Planners to Software Developers to Architects to Construction Managers.

BirsBIM’s purpose is to facilitate and bring together the built environment community within the greater Brisbane region to share and exchange thoughts and knowledge in respect to technology innovation across the industry.

Below I’ve noted some points from each presentation that interested me from the latest event…

BIM: A Journey into the Future – Nathan Hilderbrandt (Fulton Trotter Architects)

Nathan’s story showed the benefits of a firm investing time in taking a BIM pathway early on.

Of particular interest to me was that Nathan emphasised placing all notes and additional architectural information on the 3D Model rather than adding this to 2 Dimensional Sheets and Drawings produced from the model.

Whilst recently completing a 6 week Introduction to Revit course we were shown how to add notes to the Sheets and Drawings û so I’m not sure that all architects are adding additional info to the model alone. It was also interesting to note that their firm works in Archichad yet still collaborates well with consultants who use Revit.

BIM Management Plans û Chris Price (XRev)

To me it is essential that BIM Management plans are put in place early on in a project. Chris highlighted this with his talk and emphasised that not all plans have to go into too much detail, for instance if you want to tell how consultants how to model in detail this could be included in a separate document. He also showed many free templates that are available.

One important point that Chris highlighted was that the BIM Management plan should show a position of the building and actually provide two points (thus taking into consideration the rotation of the building too) so that buildings align.

Increasingly when doing estimates we receive updated models and models from different consultants which are not on the same physical location or rotation thus making it more difficult to track changes.

BIM Legal Considerations û Andrew Orford (Minter Ellison)

Andrew’s talk was also an interesting one and I was reminded that Contractors and Consultants should not be afraid of IP and create insurmountable hurdles to sharing information due to IP concerns.

These aren’t new problems or concepts to deal with in a legal framework. Interestingly a question from the floor was asked if he has worked on any disputes regarding BIM and his reply was that as yet he hasn’t come up against any.

Whilst 6 months ago I came up against some resistance, or asking for disclaimers, Architects seem send through models for our estimates willingly now.

M-SIX VEO Product Overview (A2K Technologies)

This was a very interesting presentation. It highlighted how advanced future Facilities Management will become.

It was great to see that models can be updated in real time in the field with tablets and smart phones. It was also interested to hear that the amount of data stored in the model in these devices can be huge and included things like photos, scannable barcodes and service manuals.

Of particular interest to me was the Life Expectancy of items and I can see a definite application for Quantity Surveyors in being able to create Tax Depreciation Schedules and Sinking Fund Forecasts.

There are numerous international guides that offer interesting reading and are thought provoking in their simplicity. I recently came across The Norwegian Home Builders BIM Manual which provides a very clear ‘modeling 101’ and is a practical aid for those who perform the project planning for residential dwellings.

Through the buildingSMART Project, the Norwegian Homebuilders Association have been involved in the development of open international standards in the field of BIM for many years now.

Their research has found that new technology and new tools are making it possible to introduce better ways of working. Subsequently their aim is to place the members of the association in a position to implement these new technologies and tools. However, they believe that their largest challenge is in how each individual member company is able to alter their own business processes.

Take a look at the manual in it’s entirety here: Norwegian Home Builders Association – BIM-manual 1.0

Within the architectural and design space the developing requirement for QSID is causing a lot of industry confusion and angst. I’m not sure that everyone understands that QSID is not a classification system in itself, it is a very basic coding system, just two digits of the elemental coding that is the Australian Cost Control Manual (ACMM2) maintained by the Australian Institute of Quantity Surveyors (AIQS).

 The project QS should be capable of pulling information from any model (at any stage) and pushing back or ‘round-tripping‘ accurate codes and data at the right time to alleviate the need for designers to input codes like QSID.

Our 5DQS team inputs its own and a combination of other more robust codes and ’round-trip’ the data to the model which provides far greater benefit. It immediately creates a model map that can be used by all project partners including the contractor and subcontractors as well as the designers and programmers at any point through the process.

For more information on round-tripping, have a read of Scott Beazley‘s post “5D Round-Tripping and Model Validation“. Or contact Scott directly, Mitchell Brandtman, 07 3327 5000

During my recent UDIA Brisbane presentation I talked about the notion of ‘Agile Aerial Robots’. My interest spawned when I came across a fascinating TED talk by Vijay Kumar which you can watch yourself below.

This technology is reliant on models and 3D information to allow them to function and to carry out the tasks we want them to do. There are dozens of examples like this one where various robots can be used to carry out construction tasks and each one relies on the input of a model in the first instance. Relative to the construction industry, when you stay in a 2D space you’re limiting your opportunities for the future.

View Video Here: https://youtu.be/4ErEBkj_3PY

The Rise report explores the context in which the Queensland housing construction industry will grow and the thematic areas which will impact on skills development for future development, building processes and products.

They found that central to housing deployment is a value proposition which represents the extent to which a new house reflects aspects of quality and desirability. They concluded that BIM is poised to reshape the value proposition and how traditional estimation, design optimisation and scheduling are undertaken through the use of iterative modelling hinged to costing data.

Click the link to view the report in it’s entirety;

http://www.slideshare.net/slid…

On more and more occasions we are being asked to provide indicative m2 rate analysis for our Clients or Financiers at the early design stage of a new construction project (either before or during the development application has been submitted). Many factors such as site specific conditions, construction methods, level of finish and timing will greatly affect a standard cost per m2 approach.

At feasibility stage, generally, most building costs are formulated on a cost per m2 basis that has been derived from either an industry recognised costing book (such as Rawlinsons or Cordells), a previous project / benchmarking or simply industry æhear say’. This approach can be very dangerous if you don’t understand exactly what the rate is based upon (ie: GFA, FECA or NLA) does it include for the basement and the balcony areas, deductions for voids or openings?) which can lead to significant impacts on your projects feasibility. Remember that a variance of a couple of hundred $/m2 could result in your project not making it past feasibility stage, or worse, costing you time and money to develop the design only to find out that it just doesn’t stack up!

This lack of understanding can also have a significant impact on specialised or smaller scale projects because they are more cost sensitive. For example, when you look at Social Housing projects, there is usually a higher density of units within a smaller building area. Although the cost per unit may be less than that of more conventional housing or residential projects, the cost per m2 can be significantly higher due to the inclusion of additional dividing walls, kitchens, more fittings etc. These factors need to be considered at the feasibility stage to avoid cost blow-outs. Likewise, a small æhigh end’ residential renovation based in and around CBD suburbs will have a significantly higher cost per m2 rate than a new residential dwelling away from the CBD.

Quantity Surveyors are construction cost experts and it’s important to get them involved in the early stages of your project so a more detailed cost estimate can be obtained. The cost per m2 approach has a place in our industry but should only be used to give a æballpark’ cost figure at the early design stages.

For more information on risks associated with a cost per m2 approach contact myself, Andrew Opperman, Mitchell Brandtman, 02 9525 8000.