This document is downloaded from CityU Institutional ...lbms03.cityu.edu.hk/oaps/ca2013-4513-lms979.pdf · technology. The steps in the pilot study include 3D model drawings, BIM

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Title Innovative generation in cost management through BIM environment

Author(s) Lin, Mushui (林木水)

Citation

Lin, M. (2013). Innovative generation in cost management through BIM environment (Outstanding Academic Papers by Students (OAPS)). Retrieved from City University of Hong Kong, CityU Institutional Repository.

Issue Date 2013

URL http://hdl.handle.net/2031/7147

Rights This work is protected by copyright. Reproduction or distribution of the work in any format is prohibited without written permission of the copyright owner. Access is unrestricted.

Innovative Generation in Cost Management

through BIM Environment

By

Mushui LIN

Submitted in partial fulfillment of the requirements for

the degree of Bachelor of Science (Honours) in Surveying

Department of Civil and Architectural Engineering

City University of Hong Kong

March 2013

DECLARATION

I declare that this thesis represents my own work, except where due acknowledgement

is made, and that it has not been previously included in a thesis, dissertation or report

submitted to this University or any other institution for a degree, diploma or other

qualification.

Signed _______________________________

Mushui LIN

i

ABSTRACT

Construction cost management is essential for the success of a project. The

procedures in the project cost management include pre-contract cost estimating and

post-contract cost control. Cash flow forecasting, as one of the processes in the post-

contract cost control, serves the functions of: 1) assisting project managers to

anticipate the total planned budget, 2) illustrating a difference between anticipated and

actual expenditure of the project in a monthly basis, and 3) timely reminding the

client possible risks of overbudget and to take prompt remedial actions. Building

Information Modeling (BIM) is a new innovative technology that allows relevant

graphical and topical information related to the built environment to be stored in the

database for access and management through a project lifecycle. With development of

digital technology, data and information can be linked with 3D components in BIM to

provide 4D, 5D and 6D BIM. It is predicted that BIM could have a marked impact on

the construction industry and is regarded as a major challenge to conventional

professionals in AEC industry including Quantity Surveyors.

However, there is seldom research about what services can Quantity Surveyors

provide to Client on the BIM projects. This research will establish a framework of 5D

BIM construction cost management and evaluate the degree of feasibility and

efficiency of using 5D BIM for Quantity Surveyors in preparing cash flow forecast

for cost control. During the research process, the procedures for generating 5D BIM

cash flow forecast are demonstrated. The benefits and difficulties encountered are

described and analyzed. Solutions for some problems and recommendations for

improvement are discussed.

This research involves a pilot study to create cash flow forecast by using 5D BIM

technology. The steps in the pilot study include 3D model drawings, BIM quantities

takeoff and measurement, Bills of Quantities production and pricing, construction

programme planning, cash flow forecast and 5D simulation.

Through this research, it is found that 5D BIM is feasible to be used for construction

cost management by Quantities Surveyors. The benefits of 5D BIM in cost

management include 1) visualized communication; 2) fast response in model-based

cost management; 3) leveraged integration of information; and 4) close monitor on

ii

actual cash flow. However, there are some difficulties or loopholes revealed due to

the contradictions between current cost management practices and BIM approach. It is

recommended that the industry needs to redefine current standards in order to make

BIM adoption and use easier. In addition, the university and the construction industry

needs to work collaboratively to ensure that BIM modules are introduced into higher

education curricula.

iii

ACKNOWLEDGEMENTS

This dissertation would not have been possible without the guidance and the help of

several individuals who in one way or another contributed and extended their

assistance in the preparation and completion of this study.

First and foremost, I would like to express my sincere gratitude to my dissertation

supervisor, Dr. Daisy K. L. YEUNG, for her valuable guidance, advice and

continuous support throughout the production of this dissertation. She can always give

me insightful comments and inspiration when I hurdle the obstacles in the completion

of this research.

Besides my supervisor, I would like to thank Mr. Calvin KEUNG, for his kind

encouragement and assistance during the preparation of this dissertation. My sincere

thanks also go to Mr. K.K. CHAN, for his insightful knowledge and kind support for

this research.

I thank Mr. Kelvin KUO of isBIM Limited, the Hong Kong Institute of Surveyors,

BuildingSMART (Hong Kong) for their beneficial experience sharing.

Last but not least, I thank my families and friends for their numerous love, care and

support. Whenever I felt confused and pressured, they became my intimate audience.

This work is dedicated to them.

iv

TABLE OF CONTENTS

Abstract i

Acknowledgements iii

Table of Contents iv

List of Tables ix

List of Figures x

Page

CHAPTER 1: INTRODUCTION 1

1.1 Background to the Research 1

1.2 Statement of the Problem 3

1.3 Research Aims and Objectives 4

1.4 Methodology 4

1.5 Research Procedures 6

1.6 Outline Structure of the Thesis 7

CHAPTER 2: LITERATURE REVIEW-BIM 9

2.1 Introduction 9

2.2 Introduction to BIM 9

2.3 Adoption of BIM in the Construction Industry 13

2.4 BIM and Construction Planning 15

2.5 Model-based Estimating and Quantity Takeoff 17

2.6 BIM and Quantity Surveying Practice 20

v

2.7 Adoption of BIM in Hong Kong 20

2.8 Worldwide BIM Standards and Policies 21

2.9 Future & Preparation for BIM 24

CHAPTER 3: LITERATURE REVIEW-CONSTRUCTION COST MANAGEMENT 25

3.1 Introduction 25

3.2 Process of Construction Cost Management 25

3.3 Cash Flow Forecast 26

3.4 Cash Flow Curve 27

3.5 Cumulative Cost Curve 28

CHAPTER 4: RESEARCH METHODOLOGY 30

4.1 Introduction 30

4.2 Background of Research 30

4.3 Research Framework 30

4.4 Description of Research Framework 32

4.5 Background of Pilot Study 34

4.6 Descriptions of Adopted Softwares 35

4.7 Declaration for Software Adoption 37

CHAPTER 5: 3D MODEL DRAWING 38

5.1 Introduction 38

5.2 List of BIM Software Applications 38

5.3 BIM Design Software Used in Pilot Study 40

5.4 Principles of Model Drawing 40

vi

5.5 Model Drawing By Floors 46

CHAPTER 6: QUANTITIES TAKEOFF AND MEASUREMENT 51

6.1 Introduction 51

6.2 Concrete 51

6.3 Formwork 57

6.4 Reinforcement 63

6.5 Door & Window 64

6.6 Internal Finish 65

6.7 External Finish 66

CHAPTER 7: BILLS OF QUANTITIES AND PRICING 67

7.1 Introduction 67

7.2 BQ Production 67

7.3 BQ Pricing 72

7.4 Cost Summary 75

CHAPTER 8: CONSTRUCTION PROGRAMME PLANNING 77

8.1 Introduction 77

8.2 Introduction to Construction Programme Planning 77

8.3 Bar Chart 78

8.4 Application of Computer in Construction Scheduling 79

8.5 Introduction to Microsoft Project 79

8.6 Construction Programme Planning for Pilot Study 79

vii

CHAPTER 9: BIM CASH FLOW FORECAST 86

9.1 Introduction 86

9.2 Principles of BIM Cash Flow Forecast 86

9.3 Cost for Breakdowns of Construction Programme 87

9.4 Cost for Items Excluded in BQ 88

9.5 Summary of Total Construction Cost 92

9.6 Cost Distribution for Construction Activities 93

9.7 Planned and Actual Construction Cost (Without Retention) 95

9.8 Payment Arrangements for Preliminaries and Retention 101

9.9 Planned Construction Cash Flow (With Retention) 102

9.10 Actual Construction Cash Flow (With Retention) 104

9.11 Final Cash Flow Curves and Forecasting (With Retention) 106

CHAPTER 10: 5D SIMULATION 109

10.1 Introduction 109

10.2 Introduction to Navisworks Manage 109

10.3 Process of Creating 5D BIM Simulation 109

10.4 Applications of 5D BIM in Interim Payment 118

10.5 Export to Video and Table Summary 118

CHAPTER 11: FINDINGS DISCUSSIONS AND ANALYSIS 126


11.2 Benefits 126

11.3 Difficulties 128

viii

CHAPTER 12: CONCLUSIONS, RECOMMENDATIONS AND SUGGESTIONS 136


12.2 Review of Research Objectives 136

12.3 Summary of Research 137

12.4 Conclusions 141

12.5 Recommendations 142

12.6 Limitation of Research 146

12.7 Suggestions for Further Research 148

REFERENCES 153

APPENDIX A – 3D Model Drawing 159

APPENDIX B –Bills of Quantities with Pricing 195

ix

LIST OF TABLES

Page

Table 3.1 Process of Construction Cost Management 26

Table 4.1 Summary of Pilot Study Background 35

Table 5.1 List of BIM Software Applications 38

Table 5.2 Concrete Measurement Rules in HKSMM4 41

Table 6.1 Formwork Measurement Rules in HKSMM4 57

Table 6.2 Assumed Reinforcement Ratios 63

Table 6.3 Example of Internal Finishing in G/F 65

Table 6.4 Example of External Finish in G/F 66

Table 7.1 Bill for Each Floor 67

Table 7.2 Cost Summary of All Floors 76

Table 9.1 Cost for each bill and total cost 89

Table 9.2 Summary of Cost Estimation for All Items in Construction Programme 92

Table 9.3 Payment Arrangement for Preliminaries and Retention 101

Table 9.4 Payment Arrangement for Planned Construction Programme 103

Table 9.5 Planned (Baseline) Construction Programme Cash Flow 104

Table 9.6 Payment Arrangement for Actual Construction Programme 105

Table 9.7 Actual Construction Programme Cash Flow 106

Table 10.1 5D Cumulative Cash Flow and Monthly Interim Payment 119

x

LIST OF FIGURES

Page

Figure 1.1 Process of 5D Simulation and cash Flow Forecast 5

Figure 2.1 BIM Maturity Diagram 10

Figure 2.2 Productivity of Construction Industry in U.S. 14

Figure 4.1 Research Framework 31

Figure 5.1 Concrete Measurement Rules in HKSMM4 42

Figure 5.2 Example of R.C. Frame Elements 42

Figure 5.3 Example of Column Properties 43

Figure 5.4 Example of Window Family 44

Figure 5.5 Example of Door Family 44

Figure 5.6 Properties Dialogue of a Window Set 45

Figure 5.7 Painting Function in Revit 45

Figure 5.8 Floor Plan-G/F 46

Figure 5.9 Floor Plan-1/F 47






Figure 5.15 Floor Plan-Roof and Upper Roof 50

Figure 5.16 Whole Building 3D Model 50

xi

Figure 6.1 Example of Wall Concrete Takeoff 52

Figure 6.2 Example of Column Concrete Takeoff 52

Figure 6.3 Example of Beam Concrete Takeoff 53

Figure 6.4 Example of Slab Concrete Takeoff 53

Figure 6.5 Example of Model Tree 54

Figure 6.6 Example of Model Schedule 55

Figure 6.7 Example of Model Map 55

Figure 6.8 3D Curved Surface Area Measurement 56

Figure 6.9 Example of Workbook Function in CostX 56

Figure 6.10 Live Linking in Workbook 57

Figure 6.11 Example of Wall Formwork Area Measurement 59

Figure 6.12 Example of Column Measurement in Revit 60

Figure 6.13 Example of Beam Measurement in Revit 61

Figure 6.14 Define Floor Level 62

Figure 6.15 Automatic Takeoff and Sum up in Workbook 62

Figure 6.16 Example of Door Schedule 64

Figure 7.1 Structure of A Typical Bill in B.Q. 68

Figure 7.2 Example of Bill 1 G/F (Concrete Works) 69

Figure 7.3 Example of Bill 1 G/F (Brickwork & Blockwork, Internal and External

Finishing) 70

Figure 7.4 Example of Bill 1 G/F (Door Set, Steel & Metal Works, and Window Set)

71

Figure 7.5 Example of Priced BQ (Concrete Works) 72

xii

Figure 7.6 Example of Priced BQ (Brickwork & Blockwork, Internal and External

Finishing) 73

Figure 7.7 Example of Priced BQ (Door Set, Steel & Metal Works, and Window Set)

74

Figure 7.8 Example of Cost Summary of Bill 1 in G/F 75

Figure 8.1 Major Items in Construction Programme (Without Cost) 82

Figure 8.2 Detailed Breakdown of Construction Programme (Without Cost) 85

Figure 9.1 Relationship between Program Planning, Cost and Schedule 87

Figure 9.2 Original Simplified Construction Program of R.C. Framing 87

Figure 9.3 New Detailed Construction Programme of R.C. Framing 88

Figure 9.4 Percentage for Calculating Items Excluded in BQ 90

Figure 9.5 Simplied Version of R.C. Framing Planning 93

Figure 9.6 Detailed Version of R.C. Frame Planning 93

Figure 9.7 Simplified Program for Joiner and Alum. Window 94

Figure 9.8 Detailed Construction Program of Joiner, Alum. Window 94

Figure 9.9 Planned and Actual Construction Programme (With Cost) 97

Figure 9.10 Baseline (Planned) Monthly Construction Cost (Without Retention) 98

Figure 9.11 Actual Monthly Construction Cost (Without Retention) 99

Figure 9.12 Planned (Baseline) & Actual Cumulative & Monthly Construction Cost

(Without Retention) 100

Figure 9.13 Comparison of Planned (Baseline) and Actual Cash Flow (With Retention)

108

Figure 10.1 Export Model to Navisworks Manage 110

Figure 10.2 Example of Schedules and Costs in Navisworks Manage 111

xiii

Figure 10.3 Model Elements Selection and Attachment to Task 112

Figure 10.4 Example of inputting payment information of preliminaries, retention

money in Navisworks Manage 114

Figure 10.5 Simulation Settings 115

Figure 10.6 5D Simulation Example 117

Figure 11.1 Function for Team Collaboration in Revit 129

Figure 11.2 Dimension of Staircase Shown in Revit 130

Figure 11.3 Example of Window Family 131

Figure 11.4 BIM Standard Manual by Hong Kong Housing Authority 132

Figure 12.1 Revision to 3D BIM Model 150

Figure 12.2 Example of Saw-tooth Diagram 151

Chapter 1: Introduction

1

1. CHAPTER 1: INTRODUCTION

1.1 Background to the Research

With the development of BIM technology, the adoption of the BIM in the

construction cost management will become populous. In the following, the

background of the research, including the techniques in the construction cost

management, development of BIM, and the adoption of BIM in the Hong Kong and

worldwide.

1.1.1 Construction Cost Management

Construction cost management is essential for the success of a project. The

procedures in the cost management for a project include pre-contract stage and post-

contract stage. The pre-contract cost management includes providing preliminary cost

estimate, controlling design development within budget and measuring quantities in

BQ. The post-contract cost management includes payment assessment, valuation of

variations, cash flow forecasting, and settlement of final account. Cash flow

forecasting is to assist the client early in the process with funding agreements and for

procurement and contract choice. It can be applied in cost control by comparing the

actual cash flow against the anticipated cash flow. The cash flow curve derived from

the forecast is used as a guide to the Client as the predicated cash flow forecast, which

enables to anticipate total construction cost as well as interim payments to the

contractor. The cumulative cash flow curves are graphic representation for the

planned expenditure for a project, which are usually in the shape of “S” and therefore

are usually referred as “S-Curve”.

1.1.2 BIM

As suggested by Robert (2011), there are two ways to define BIM, i.e. Building

Information Modeling and Building Information Management. Building Information

Modeling is a technology that allows relevant graphical and topical information

related to the built environment to be stored in a rational database for access and


2

management. Building Information Management is the collection, organization,

analysis, and distribution of attributed data contained within a building project.

BIM enables data and information to be linked with 3D components in the BIM

model to provide 4D, 5D and 6D BIM. 4D BIM is to embed time into the 3D model,

which can be used to simulate the construction process of the building. 5D BIM is to

add cost to the 4D model. It allows quick cost estimation for different design options

at the concept stage. 6D BIM is to incorporate data of facilities into the model which

enables the facilities managers to have a powerful tool to manage the assets during the

operating stage.

With data of a construction project stored in the BIM model, the designers and

constructors can simulate real life situations before commencing the project on site.

Therefore conflicts in design and construction can be reduced. The automatic

measurement function enables the Quantity Surveyors to run takeoffs and opt for the

exact quantities used in estimating the pre-bid budget. Upon completion of the

construction, the data-rich model can be delivered to the operator for facility

management.

Compared with the traditional approach of cost estimating, the model-based

estimating of BIM enables automatically takeoff quantities from the model, which

allows the project team to see the cost effects of their design options and proposed

changes during all phases of the project. The benefits of model-based estimating

include 1) consistent information with design, 2) efficient, cost effective and reduce

human errors, and 3) enable estimators to focus on high value project factors.

1.1.3 BIM Adoption in Hong Kong & Worldwide

BIM has been adopted in several projects in Hong Kong. The Hong Kong Housing

Authority has introduced BIM in its public housing projects since 2006. It is reported

by Hong Kong Housing Authority (2011) that BIM has benefited the government

organization in the construability analysis, clash detection and environmental analysis.

It has also planned to apply BIM for facility management of the HA assets. As

reported by HKBIM (2011), other organizations like MTR and some private


3

developers have also attempted the implementation of BIM in producing drawings in

recent years.

In the worldwide, some countries, like Singapore, United States and Korea, have

move far in advance and lead the world in BIM implementation. The Singapore

government is very encouraging the adoption of BIM. It mandates that all

architectural, structural, mechanical and electrical plans for building works to be in e-

submission for regulatory approval by 2015. It has also set up a BIM fund to

encourage construction firms to implement BIM technology. In the US, BIM at the

design stage is now a mandated requirement for public office building procured and

maintained by the US General Services Administration. In UK, the Government’s

chief construction adviser indicated in October 2010 that BIM will become obligatory

on publicly procured projects in the near coming future.

1.2 Statement of the Problem

BIM could have a marked impact on the construction industry. It is regarded as a

major challenge to the conventional professionals in the AEC industry including

Quantity Surveyors. Quantity Surveying is regarded as an important discipline

responsible for cost and contract within the construction industry. Measurement and

preparations of Bills of Quantities are important functions underpinning quantity

surveying practices. It is predicted that BIM will have the potential to revolutionize

current practices of Quantity Surveying. It is also central to the contention that BIM’s

potential in automatic measurement might threaten clients’ requirements for quantity

surveying services.

However, there is seldom research about what services can Quantity Surveyors

provide to the Client on the BIM projects. In fact, the industry shall embrace the new

opportunities and benefits provided by this new technology. With automatic quantities

takeoff undertaken by BIM software applications, the Quantity Surveyors can focus

on more valuable services such as construction cost management, contract

administration, risk assessment, pricing, valuation and so on, which cannot be

replaced by computer and software.


4

1.3 Research Aims and Objectives

Although there are some case studies for using BIM in cost estimating of different

design options, there is seldom research about using 5D BIM for construction cost

management.

This research aims to establish a framework of 5D BIM and evaluate the degree of

feasibility and efficiency of using it for Quantity Surveyors in construction cost

management in compliance with existing Hong Kong Standard Method of

Measurement. During the research process, the procedures for generating 5D BIM

cash flow forecast and simulation, the benefits and difficulties encountered will be

described and analyzed. Solutions for some problems and recommendations for

improvement will be discussed.

This research aims to conduct a pilot study to investigate the production of

construction cash flow forecast through the BIM environment. The following

objectives are formulated for carrying out this study.

1) To review the development of Building Information Modeling (BIM) and

techniques for project cost management;

2) To create BIM model with associated construction programme planning and cost

in compliance with the Hong Kong Standard Methods of Measurement.

3) To produce project cash flow and 5D BIM simulation under Quantity Surveying

practices,

4) To identify benefits and difficulties encountered for construction cost

management through BIM environment; and

5) To make recommendations for improving BIM application in cost management

for Quantity Surveyors.

1.4 Methodology

As illustrated in Figure 1.1, 5D BIM is composed of three elements, i.e. 3D model,

time and cost. In order to achieve 5D BIM simulation and cash flow forecast for use

by Quantity Surveyors in the cost management, the 3D model drawing is produced in

accordance with the principles laid down in the standards methods of measurement.

The in

information of “Cost” is achieved by automatic quantity takeoff and measurement as

well as pricing of the Bills of Quantities. After that, the information of “Time” and

“Cost” can

create 5D BIM for simulation and cash flow forecast.

`

The following met

aims and objectives.

1)

2)

The information of “Time” is obtained by construction programme scheduling and the



“Cost” can be input into the 3D model by linking with the construction elements to


Figure

The following met


Literature Review

literature review is conducted in order to establish a deep knowledge base and

understanding abou

construction cost management techniques. The literature

books, journals, conference papers, seminars,

Pilot Study

drawing, 2) BIM quantities takeoff and measurement, 3) Bills of Quantities

3D Model

•Model

Drawing

Following

HKSMM

formation of “Time” is obtained by construction programme scheduling and the



be input into the 3D model by linking with the construction elements to


Figure 1.1 Process of 5D Simulation and cash Flow Forecast

The following methodologies are applied for the purpose of achieving the research


Literature Review: In the outset of this research study, a comprehensive


understanding about the current development and research of BIM technology and


s, journals, conference papers, seminars,

Pilot Study: The processes in the pilot study include the s


3D Model

Model

Drawing

Following

HKSMM

Time

•Construction

Programme

Scheduling






Process of 5D Simulation and cash Flow Forecast

hodologies are applied for the purpose of achieving the research

: In the outset of this research study, a comprehensive


t the current development and research of BIM technology and



The processes in the pilot study include the s


Time

Construction

Programme

Scheduling

5















Construction

Cost

•Automatic

Quantity

Takeoff and

measurement

•Pricing in Bills

of Quantities












s, journals, conference papers, seminars, workshops



Automatic

Quantity

Takeoff and

measurement

Pricing in Bills

of Quantities

Chapter 1










construction cost management techniques. The literature review ranges from

workshops etc.

The processes in the pilot study include the steps of 1)3D model


5D BIM

Simulation

&Cash Flow

Forecast

1: Introduction










review ranges from

teps of 1)3D model


5D BIM

Simulation

&Cash Flow

Forecast

: Introduction









review ranges from

teps of 1)3D model



6

production and pricing, 4) construction programme planning, 5) cash flow

forecasting, and 6) 5D simulation. The progress of this pilot study starts with the

3D model drawings in accordance with the 2D drawings of a completed simple

project. After the model drawings, the quantities of materials can then be taken off

from the 3D model by Revit’s inherent functions and other third party softwares.

The Bills of Quantities are produced by abstracting and billing those quantities

measured. After pricing of the BQ, the cost for construction works can then be

obtained. Together with the construction programme scheduling, the time and

schedule for the construction activities can then be linked with the associated cost.

By inputting data of schedule and cost into the 3D model, a 5D BIM model can be

created to simulate the construction progress and coinstantaneous cash flow. The

monthly and cumulative cash flows for planned and actual construction programs

can then be plotted and deduced in the graph to produce the “S” curve. With the

assistance of BIM construction management software, the 5D BIM simulation

with visualization of construction activities, programme schedules and cash flows

can therefore be produced for the whole project for construction cost control and

interim payment.

1.5 Research Procedures

The following are research procedures in order to achieve the research aims and

objectives.

1) To conduct literature review on BIM and construction cost management;

2) To draw a 3D BIM model of a simple project in compliance with the Hong Kong

Standard Methods of Measurement;

3) To generate automatic quantity takeoff and measurement from the BIM model;

4) To produce Bills of Quantities and then to obtain prices of items in the Bills of

Quantities for construction cost;

5) To generate planned and actual construction program to obtain schedules for

construction activities;

6) To embed schedule(time) and cost into 3D model and generate the 5D

construction cash flow forecast;


7

7) To create integrated 5D BIM simulation and compare actual cash flow against

planned cash flow;

8) To analyze benefits of 5D BIM cash flow forecast and describe difficulties

encountered;

9) To suggest possible solutions and recommendations for improvement.

1.6 Outline Structure of the Thesis

This thesis is separated into 12 chapters in order to provide a clear and concise

account of the content. The outline structure of the thesis is summarized in the

following.

Chapter 1 introduces the background to the study, statement of the research problems,

research aims and objectives, and explanation of the research methodology. It is the

foundation of this thesis.

Chapter 2 develops the theoretical basis of the thesis by reviewing the literature

relating to Building Information Modeling (BIM). The current development of BIM

technology and its applications in the construction planning, model-based estimating

are examined. The adoption of BIM in Hong Kong and worldwide BIM standards and

policies are investigated and reviewed.

Chapter 3 is to overview the process of construction cost management and the

techniques for producing cash flow forecast.

Chapter 4 sets out the research design and methodology adopted in this research. The

primary research methodology adopted for this study is pilot study. The research

framework is designed for this study.

Chapter 5 is to demonstrate the principles and process of drawing 3D model in

accordance with the principles laid down in the Hong Kong Standard Methods of

Measurement.

Chapter 6 is to demonstrate the procedures of quantity takeoff and measurement from

the 3D model.


8

Chapter 7 is to describe the process of producing Bills of Quantities floor by floor in

the 3D model and pricing on the bills of quantities to obtain the construction cost.

Chapter 8 is to describe the procedures to create planned and actual construction

programme planning and scheduling in accordance with the 3D model drawing.

Chapter 9 is to demonstrate the process of creating planned and actual cash flow

forecasting by linking elements in the 3D model with associated time and cost.

Chapter 10 is to demonstrate the procedures to create 5D BIM simulation with

visualization of construction activities together with simultaneous construction

schedule and cost.

Chapter 11 is to discuss the findings of this study including the benefits of 5D BIM in

construction cost management and the difficulties encountered during this study.

Chapter 12 is to present the conclusions of the research result, research limitations,

recommendations for applying 5D BIM for construction cost management and

suggestions for further study.

Chapter 2: Literature Review-BIM

9

2. CHAPTER 2: LITERATURE REVIEW-BIM

2.1 Introduction

This chapter presents a summary of the literature reviews relating to Building

Information Modeling (BIM). The topics of the literature reviews about BIM can be

summarized into eight categories including 1) introduction to BIM, 2) adoption of

BIM in the construction industry, 3) BIM and construction planning, 4) model-based

estimating and quantity takeoff, 5) BIM and Quantity Surveying practices, 6)

adoption of BIM in Hong Kong, 7) worldwide BIM standards and policies, and 8)

future and preparations for BIM. In the following, the literature reviews about these

topics are discussed in detail.

2.2 Introduction to BIM

In the following, the introduction to BIM includes 1) definition of BIM, 2) BIM

maturity diagram, 3) BIM vs. 2D drawings, 4) 4D, 5D and 6D BIM and 5)

applications of BIM.

2.2.1 Definition of BIM

BIM is widely used as the acronym for ‘Building Information Modeling’. As provided

by Schwegler (2001), BIM is defined as the process of creating an information

database for a project in which lifecycle information is expressed in an interoperable

manner to create, engineer, estimate, illustrate and construct a construction project.

The Department for Business Innovation and Skills of the United Kingdom (2012)

defined BIM as a collaborative way of working, underpinned by the digital

technologies which unlock efficient methods of designing, creating and maintaining

the assets. It embeds key product and asset data into the 3D model for effective

management of information throughout a project lifecycle, i.e. from the earliest

concept through to operation.


10

2.2.2 BIM Maturity Diagram

As suggested by the Royal Institute of British Architects (RIBA) (2012), the most

effective way to understand BIM is to refer the BIM Maturity Diagram which is

prepared by Mark Bew and Mervyn Richards, as shown in Figure 2.1. In accordance

with this diagram, the maturity of BIM can be categorized into Level 0, Level 1,

Level 2 and Level 3.

Figure 2.1 BIM Maturity Diagram (Bew and Richards, 2008)

1) Level 0-CAD: The Level 0 is to use 2D Computer Aided Design (CAD) files

for producing information, which has been used by majority of the design

practices for many years.

2) Level 1- 2D and 3D: In this level, the uses of 2D and 3D information are both

increased. However, 3D software is only used as a conceptual design tool

during the early project stages and for visualization of the finished project. In

this level, BIM is also referred to as ‘Lonely BIM’ because it cannot be shared

with other members of the team.

3) Level 2- BIM: In level 2, 3D models are collaboratively produced by all key

members of the integrated team. But they need not co-exist in a single model.

Therefore the full potential of the intelligent data contained in the models may

not be realized at this level.

4) Level 3 – iBIM: The move from Level 2 BIM to Level 3 Integrated BIM

(iBIM) is the most challenging one. In the Level 3, the integrated BIM model

provides shared data for information in the facility management and lifecycle


11

costing. As illustrated by RIBA (2012), the Level 3 BIM will make it possible

to:

• Implement early design analysis on environmental performance and

minimize iterative design time;

• Quickly derive cost from the model using new costing interfaces;

• Analyze health and safety associated with the construction and

maintenance of the building; and

• Align asset management, key performance indicators, and other

feedback information with intelligent briefing, and to inform and

improve future projects.

2.2.3 BIM vs. 2D Drawing

As stated by K. Pramod Reddy (2011), the 2D drawing only enabled the coordination

in two dimensions and did not validate the space in any other dimension. This results

in inconsistent and repeatable outcomes from meeting to meeting and project and

project. BIM provides a much greater level of accuracy, which benefits all of the

trades and builders involved in the coordination process.

2.2.4 4D, 5D and 6D BIM

As illustrated in the “BIM Overlay to the RIBA Outline Plan of Work” issued by the

RIBA (2012), data and information can be linked with 3D components or assemblies

in the BIM model to provide 4D, 5D and 6D BIM.

1) 4D BIM

4D BIM is to add time to the project 3D model. It is useful to simulate the

construction process of the project in order to identify issues such as critical path

activities, logistical delivery and refining the construction process. It can also be used

to examine ways to make up time. The contract administrator can also use the

programme to assess delays and applications for Extension of Time (EOT) raised by

the contractor. A 4D enhanced model enables a diverse team of project participants to

evaluate and comment on the project scope and corresponding schedules in a very

proactive and timely manner (K. Pramod Reddy, 2011).


12

2) 5D BIM

5D BIM is to incorporate programme schedules and cost information into the project

3D model. It will allow cost estimation of design options to be produced faster. It also

makes different design options to be assessed accurately at the concept stage and

makes the design to be more aligned with a client’s budget.

3) 6D BIM

6D BIM is to add data of facilities into the model. It enables the facilities management

teams to have a powerful tool to manage the assets. For example, if a door is damaged,

the FM team can click the door tag in the model and find its supplier and then order or

repair the door in accordance with the supplier’s data.

2.2.5 Applications of BIM

The applications of BIM can be demonstrated in the following aspects, which include

construability analysis, automatic measurement, facility management, as well as

energy analysis.

1) BIM & Construability Analysis

Latham (1994) reported that design deficiencies and associated constructability

constraints are the largest factors responsible for the poor performance of the

construction industry. With data of the project stored in the BIM model, designers and

constructors can simulate real life situations before commencing project on site.

Therefore it is likely that conflicts in design and construction can be reduced by BIM.

2) BIM & Automatic Measurement

BIM has the powerful function of automatic measurements. The Cooperative

Research Centre for Construction Innovation has reported successful attempts to

produce Bills of Quantities automatically using the Industry Foundation Class (IFC)

data (O.A. Olatunji et al, 2010). A data-rich BIM contains all of the potential building

information, including the specifications and quantities, which allow the Quantity

Surveyors to run takeoffs and opt for the exact quantities used in estimating the pre-

bid budget (K. Pramod Reddy, 2011).

3) BIM & Facility Management


13

BIM enables an organization to virtually build the building before the actual

construction start. This helps to eliminate many of the inefficiencies of the

construction process. Upon completion, the data-rich model can be delivered to the

owner or the facility manager for operating the building throughout its entire life

cycle (K. Pramod Reddy, 2011). As reported by Hong Kong Housing Authority

(2011), it has planned to apply BIM technology to streamline the maintenance, repair

and management of HA facilities.

4) BIM & Energy Analysis

BIM can analyze and predict energy cost during the early design phase. It will help

architects to understand how their design would impact energy consumption and costs

during the building’s life cycle. Facility managers can also use data in BIM to

benchmark a building’s energy consumption (K. Pramod Reddy, 2011). As reported

by the Hong Kong Housing Authority (2011), BIM enables them to simulate the time

of sunrise and sunset at a site and the direction the sun travels. This enables to

determine the best location for sitting buildings and for planting greenery. Therefore

the design can be enhanced by leveraging natural resources like sunlight and airflow,

which eventually reduces the use of air-conditioning and consumption of energy.

2.3 Adoption of BIM in the Construction Industry

In the following, the discussions about the adoption of BIM in the construction

industry include the issues about 1) construction industry and technology, and 2) the

slow adoption of BIM in the construction industry.

2.3.1 Construction Industry and Technology

The construction economy is important to the society in terms of employment and

economies contribution. However, it is well recognized that construction industry is

conservative to technology adoption (O.A. Olatunji et al, 2010). In accordance with

the research undertaken by the Center for Integrated Facility Engineering in Stanford

University, U.S., the productivity of construction industry relative to all non-farm

industries in the U.S., during the period from 1964 to 1998, showed that the

construction productivity had declined slightly while productivity in all other


14

industries had almost doubled in this period, as shown in Figure 2.2 (Benedict et al,

2001).

Figure 2.2 Productivity of Construction Industry in U.S. (Stanford University, 2001)

2.3.2 Slow adoption of BIM in Construction Industry

As reported by Phillip G. and Jon H. Pittman (2004), the productivity and economic

benefits of BIM were widely and increasingly acknowledged and well understood.

The technology of BIM is also readily available and rapidly maturing. However, the

adoption of BIM is slower than anticipated. Although lack of interoperability between

software applications is one significant point of friction, it is neither the singular nor

most important factor impeding BIM adoption. As suggested by Phillip G. and Jon H.

Pittman (2004), there are three interrelated barriers to BIM adoption as:

1) the need for well-defined transactional business process models;

2) the requirement that digital data be computable; and

3) the need for well-developed practical strategies for the purposeful exchange of

meaningful information between the many tools applied to industry processes

today.


15

2.4 BIM and Construction Planning

In the following, the discussions about the applications of BIM in the construction

planning include 1) introduction to BIM construction planning, 2) functions of BIM

construction planning, 3) applications of BIM in construction planning, 4) benefits of

BIM construction planning and 5) the examples of applying BIM construction

planning in Hong Kong.

2.4.1 Introduction to BIM Construction Planning

It is claimed that by using the BIM platform together with the construction process

management software like Autodesk Navisworks Manage, the workflow of the

construction process can be simulated to effectively plan construction operations,

identify potential problems, and explore and evaluate alternatives (Autodesk, 2012).

2.4.2 Functions of BIM Construction Planning

The functions of BIM construction planning include simulating planned sequences of

construction activities, identifying clashes and interference problems, finding

opportunities for improving construction schedules, tracking materials and managing

the supply chain (Autodesk 2012).

2.4.3 Applications of BIM in construction planning

As reported by Autodesk (2012), BIM can be applied in the construction planning in

terms of the following areas.

1) 4D Modeling

The 4D modeling can simulate the planning sequence of construction activities and

space requirements on site, provide powerful visualization and identify the problems

well in advance of construction activities.

2) Site Utilization Planning

The use of BIM can help to evaluate the locations of facilities on site during multiple

phases of the construction process.

3) 3D Coordination and Clash Detection


16

It is to identify potential conflicts by comparing all building systems and thus to

reduce field conflicts.

4) Identify Time-Based Clashes

By using the time-based clash testing, BIM can be used to verify the planned

sequence of construction operations on the constrained sites.

5) Construction System Design (Virtual Mockups)

BIM can be used to create a model and conduct analysis on the construction of a

complex building system for the detailed construction planning.

6) Materials Planning and Management

By linking the building elements in the project model and the associated task schedule,

the dates when elements are needed on site for installation can be forecasted.

2.4.4 Benefits of BIM Construction Planning

As claimed by Autodesk (2012), traditional scheduling methods, such as bar charts or

critical path method network diagrams, can be difficult to address the spatial aspect

and they are not linked to the design or building model. The advantages of using 4D

simulations include:

1) informing design decisions by considering the impact on construction of

proposed design features;

2) identifying and resolving problems earlier;

3) accessing and managing project risks; and

4) improving project schedules and bringing facilities to client sooner.

2.4.5 Example of BIM Construction Planning in Hong Kong Housing Authority

As reported by the Hong Kong Housing Authority (2011), BIM enabled them to

monitor the construction progress closely and ensure a six-day construction cycle for

a typical floor. One example of using BIM for site planning is the Kwai Chung Tai

Pak Tin Street project in which the site is very congested and has slopes on its three

sides. BIM has assisted to define the best routes for site workers and trucks, the best

location for soil disposal, as well as the optimum works sequence for transporting


17

formworks and steel bars. The detailed programme and workflow simulated by BIM

have enhanced both work efficiency and site safety.

2.5 Model-based Estimating and Quantity Takeoff

The discussion for model-based estimating and quantity takeoff includes the issues

about 1) traditional cost estimating, 2) definition of model-based estimating, 3)

functions of model-based estimating, 4)benefits of model-based estimating, 5) model-

based estimating in stages, and 6)methods for exporting BIM to cost estimating

system.

2.5.1 Traditional Cost Estimating

In the traditional approach, the estimators will typically begin cost estimating by

digitizing the architect’s drawings, or importing their CAD drawings into a cost

estimating software, or manual takeoff from the drawings. However, human errors

will be introduced and inaccuracies in the original drawings will be propagated in

such traditional process (Autodesk, 2007).

2.5.2 Definition of Model-based Estimating

Model-based estimating is to use features in the BIM model to create conceptual

estimates. It can be used to compare the cost of proposed alternatives and prepare

preliminary estimates to confirm cost feasibility and evaluate proposed design

changes (Autodesk, 2012).

2.5.3 Functions of Model-based Estimating

As claimed by Autodesk (2012), model estimating can be used to accurately generate

quantity takeoffs and assist in the creation of cost estimates throughout the lifecycle

of a project. It enables the project team to see the cost effects of their design decisions

and proposed changes during all phases of the project. It will also support better

design decision-making and can help curb excessive budget overruns due to project

modifications.


18

2.5.4 Benefits of Model-based Estimating

As reported by Autodesk (2007), the benefits of BIM Cost Estimating include the

following aspects:

1) consistent information with design:

By using BIM, measurements and quantity takeoff can be generated directly from the

model. Changes in the design can automatically ripples to all related measurement,

schedule and documentation.

2) Efficient, Cost Effective and Reduce Human Error

BIM cost estimating can enable estimators to save time, cost and reduce the potentials

of human errors.

3) Enable focusing on high value project factors

With quantities takeoff and measurement automatically done by BIM, estimators can

focus on high value project-specific factors such as identifying construction

assemblies, generating pricing, factoring risks and so forth.

2.5.5 Model-based Estimating in Stages

As reported by Autodesk (2012), model-based cost estimates are very valuable to

project teams at every stage of the design process, as shown in Table 2.1.

Table 2.1 Stages of Model-based Estimating (Autodesk, 2012)

Stage Action Purpose

1) Early Design

Stage Cost estimates based on area or

volume of a proposed conceptual

design and comparison to

historical data.

To confirm that the design is

feasible and in alignment

with budget.

2) Design being

developed Material takeoff and quantify

key building elements to

compute real-time preliminary

cost estimates.

To confirm that the evolving

design is staying on-track

and evaluate the cost impact

of proposed design


19

enhancements.

3) Design

matures with

construction

details

accurately

modeled

Precise quantity takeoffs

extracted from BIM model to

compute very detailed cost

estimates.

To analyze factors in the

planned construction process

and consider labor, materials,

equipment, and subcontractor

costs for all building

elements.

4) Increased

detail level of

each element

in BIM model

Increase level of costing detail. To make more precise cost

estimates.

2.5.6 Methods for Exporting BIM to Cost Estimating System

The approaches to export quantities and descriptions from BIM into a cost estimating

system include Application Programming Interface (API), Open Database

Connectivity (ODBC) and Output to Excel. The selection of approach to be adopted

shall be in accordance with the estimating workflow, the costing solutions, the pricing

database and other factors of the organization (Autodesk, 2007).

1) Application Programming Interface

This approach is using a direct link between the costing system and BIM software like

Revit. The user can export the building model from BIM software using the costing

program’s data format and send it to the estimator. The estimator can then open it

with the costing solutions to begin the costing process.

2) Open Database Connectivity

It typically uses the ODBC database to access the attribute information and dimension

data in the building model. Such kind of estimating software applications include

CostX and ITALSOFT.

3) Output to Excel

This method is to take off quantity within Revit and then output to an Excel program.

It is most suitable for some projects with simple costing workflow.


20

2.6 BIM and Quantity Surveying Practice

The topic about BIM and Quantity surveying practices will cover the discussion about

1) role of Quantity Surveyors, and 2) effect of BIM on Quantity Surveying practices.

2.6.1 Role of Quantity Surveyors

Quantity surveying is regarded as an important discipline responsible for cost and

contract within the construction industry. The conventional services provided by the

Quantity Surveyors include preliminary estimates, feasibility studies, cost plans, and

bills of Quantities preparation. They are also responsible for construction contract,

tender analysis, contractor selection and financial management of all construction

works. In addition, some quantity surveying firms provide other services such as

value management, management contracting, construction dispute resolution and so

on (Nkado, 2000).

2.6.2 Effect of BIM on Quantity Surveying Practices

As reported by Masidah and Khairuddin (2005), while some professional services

provided by Quantity Surveyors might be unnecessary, measurement and preparations

of Bills of Quantities are important functions underpinning quantity surveying

practices. It is predicted that BIM will have the potential to revolutionize current

practices of quantity surveying. It is central to the contention that BIM’s potential in

automatic measurement might threaten clients’ requirements for quantity surveying

services (O.A. Olatunji et al, 2010).

2.7 Adoption of BIM in Hong Kong

BIM has been adopted in several projects in Hong Kong. In 2011, the Hong Kong

Institute of Building Information Modeling (HKIBIM) has issued a report about the

use of BIM in Hong Kong since 2005. It was reported that projects in MTR and other

private developments have attempted the implementation of BIM in producing

drawings in recent years (HKIBIM, 2011).


21

In the public sector, the Hong Kong Housing Authority claimed that it had introduced

BIM in its public housing projects since 2006. In fact, BIM system has been adopted

in more than 19 public housing projects by the Hong Kong Housing Authority at

various project stages for identifying and resolving construction and demolition

difficulties. As reported by the Hong Kong Housing Authority (2009), it had set up

plans for BIM as:

1) starting from 2014-2015, use BIM as a standard design tool for housing

projects;

2) from 2006, pilot BIM for more than 19 public housing projects at various

project stages;

3) prepare in-house BIM standards, user guide, library component design guide

and references;

The projects utilizing BIM technology include So Uk Demolition, So Uk

Redevelopment, Kwai Chung Area 9H, and Kai Tak Site 1B. It is reported that the

application of BIM enabled the Hong Kong Housing Authority to perform building

analysis to avoid clashes in design and improve communication among project teams,

contractors and the public. It has also pilot several projects using BIM environmental

analysis, 4D construction planning and it has planned to apply BIM technology to

streamline the maintenance, repair and management of HA facilities (Hong Kong

Housing Authority, 2011).

2.8 Worldwide BIM Standards and Policies

The discussion about the worldwide BIM standards and policies will cover the

adoptions of BIM in countries of Singapore, China, Korea, the United States and the

United Kingdom.

2.8.1 Singapore

The Singapore Government is encouraging the adoption of BIM technology in the

construction industry. The Singapore Building and Construction Authority (BCA)

mandates that all architectural, structural, mechanical and electrical plans for building

works shall be in e-submission for regulatory approval by 2015. It is expected by the


22

Singapore BCA that 80% of the organizations in the construction industry will use

BIM by then. The BCA has also set up a BIM fund in order to encourage construction

firms to implement BIM technology in actual projects (Singapore BCA, 2012).

2.8.2 China

In the Twelfth Five Years Plan released in 2011, the Chinese Government has realized

the importance of using information system to improve the qualities and standards in

the construction industry. In a report issued by the Ministry of Housing and Urban-

rural Development of the People’s Republic of China (2011), the government planned

to:

1) encourage application of BIM technology for clash analysis in the construction

projects;

2) apply information management in the construction industry to improve

productivity and management standards.

3) use BIM to visualize design in the design stage and to reduce errors in

information transmission during construction stage.

4) investigate possibilities of implementing BIM in complex and large projects.

5) incorporate BIM to synchronize information in architecture, structure and

mechanics.

2.8.3 Korea

The Korean government agencies including the Korean Public Procurement Service

and the Korea’s Ministry of Land, Transport and Maritime Affairs, are encouraging

the adoption of BIM. In January 2010, the Korean Ministry of Land, Transport and

Maritime Affairs has compiled a BIM application guide for architectural and civil

engineering works which include detailed descriptions of methods and conditions for

using BIM technology for owners, architects and engineers (Korean Ministry of Land,

2012).

2.8.4 The United States

As reported by K. Pramod Reddy (2012), some government agencies and building

owners in the United States such as the General Services Administration (GSA) and


23

the U.S. Army Corps of Engineers have taken extreme steps regarding mandating the

use of BIM. They believe the adoption of BIM will have benefits for every key player

in the construction process, from design to construction to facility management.

2.8.5 The United Kingdom

In May 2011, the Cabinet Office of the United Kingdom announced its Government

Construction Strategy for BIM. In accordance with this report, the Cabinet Office will

coordinate with the industry stakeholders to develop standards for BIM. As outlined

in this report by the Cabinet Office of U.K. (2011), the major BIM strategies set by

the Government are to:

1) allow time for industry stakeholders to prepare for new standards and training

for BIM;

2) complete agreed pilot projects using BIM;

3) starting from March 2012, post BIM to the completion process such as facility

management;

4) starting from April 2012, define and mandate BIM standards for Government

projects;

5) starting from summer 2012, roll out BIM to all government projects;

6) by July 2012, achieve goal of fully collaborative delivery via 3D models for

trial projects in multiple departments;

7) by 2016, require fully collaborative 3D BIM with all data and documentation

being electronic;

8) use BIM to integrate design and construction with facility management.

From the summer of 2012, the UK government has made commitments to have all of

its projects utilizing BIM based on the “Government Construction Strategy - UK

Government Cabinet Office, May 2011” as well as “BIM overlay to the RIBA Outline

Plan of Work” (Department for Business Innovation and Skills of U.K., 2012).


24

2.9 Future & Preparation for BIM

In the discussion for the future and preparation for BIM, the two issues will be

discussed, i.e. 1)the future impacts of BIM and 2)the suggested preparations for BIM.

2.9.1 Future Impacts of BIM

As reported by O.A. Olatunji et al (2010), BIM could have a marked impact on the

pre-construction processes, however, complying BIM with the relevant Standard

Methods of Measurement could be one of the chief challenges. BIM is regarded as a

major challenge to the conventional professionals in the AEC industry including

Quantity Surveyors, which may redefine the traditional professional boundaries.

2.9.2 Preparations for BIM

AEC industry will face a great challenge as the shift from Level 0 BIM to Level 3

BIM as described in the BIM maturity diagram is more significant compared with the

shift from drafting on tracing paper to CAD. The following are some approaches as

suggested by RIBA (2012) as to:

• provide training, especially in relation to teamwork and collaborative approaches

in design and construction to embrace new working methods;

• examine current successful private sector integrated team models and set out how

different models might be appropriate depending on the client’s aspirations and

risk profile;

• adopt industry-wide process;

• consider ways to build and manage successful project teams; and

• contribute to the debate on the best forms of procurement which will truly

encourage collaboration and innovation.

Therefore, the Quantity Surveyors and other construction professionals need to have

some preparations for BIM, e.g. reviewing quantity surveying curricula in education

(O.A. Olatunji et al, 2010).

Chapter 3: Literature Review-Construction Cost Management

25

3. CHAPTER 3: LITERATURE REVIEW-CONSTRUCTION COST

MAN AGEMENT

3.1 Introduction

This chapter presents a summary of the literature reviews about construction cost

management. The topics covered in the literature reviews for construction cost

management include 1) process of construction cost management, 2) cash flow

forecast, 3) cash flow curve, and 4) cumulative cost curve. In the following, the

literature reviews about these topics are discussed in detail.

3.2 Process of Construction Cost Management

In Hong Kong, the normal processes of construction cost management include the

procedures as in the following:

1) providing preliminary cost estimate;

2) controlling the design development within budget;

3) measuring the quantities of construction works in the Bills of Quantities;

4) controlling cost in post-contract stage, including

a. payment assessment

b. valuation of variation

c. cash flow forecasting

d. settlement of final account

The process of construction cost management in different stages can be summarized

in Table 3.1.

3.3

In the discussion for cash flow forecast, the following issues are discussed as 1)types

of cash flow forecast, 2) employer’s vs. contractor’s cash flow forecast, 3) function of

cash flow forecast, 4) reten

format of cash flow forecast.

3.3.1

There are mainly two types of cash flow forecast, i.e. 1) cash flow forecast of a

company, and 2) cash flow forecast of a particular projec

study, only

BIM technology

3.3.2

Generally, the approach adopted by the employer for producing cash flow for

different from the approach adopted by the contractor. It is due to different

considerations in terms of payment dates, presentation of the cash flow forecast, and

some issues differ between one party and another,

In this

Cash Flow Forecast





3.3.1 Types of Cash Flow Forecast



study, only the cash flow of a project, i.e.

BIM technology

3.3.2 Employer’s





In this dissertation

Chapter

Table 3.1

Cash Flow Forecast





Types of Cash Flow Forecast



the cash flow of a project, i.e.

BIM technology.

Employer’s vs. Contractor’s Cash Flow Forecast





dissertation, only the cash flow for the

Chapter 3: Literature Review

1 Process of Co

Cash Flow Forecast



cash flow forecast, 4) retention percentage and period, and 5) accurate graphical





the cash flow of a project, i.e.

Contractor’s Cash Flow Forecast





, only the cash flow for the

: Literature Review

26

Process of Construction C



tion percentage and period, and 5) accurate graphical




the cash flow of a project, i.e. project cash flow






, only the cash flow for the client

: Literature Review-Construction Cost Management

nstruction Cost Management





company, and 2) cash flow forecast of a particular project (RICS, 2012). In this pilot

project cash flow





some issues differ between one party and another, e.g. retention money (RICS, 2005)

client will be discussed.

Construction Cost Management

ost Management





t (RICS, 2012). In this pilot

project cash flow, will be





retention money (RICS, 2005)

will be discussed.







will be created using

Generally, the approach adopted by the employer for producing cash flow forecast is



retention money (RICS, 2005)







created using

ecast is



retention money (RICS, 2005).


27

3.3.3 Function of cash flow forecast

The function of cash flow forecast is to assist the employer early in the process with

funding agreements and for procurement and contract choice. The cash flow profiles

may also be affected by the different procurement routes and contracts (RICS, 2012).

3.3.4 Retention Percentage and Period

The provision of retention is usually included in the construction contract. It is usually

10% of certified value excluding Nominated Subcontractors’ values, plus retention

retained for each Nominated Subcontractor. The limit of retention is usually 5% of

main contract sum excluding Nominated Subcontractors’ sub-contract sums, plus

limit of retention for each Nominated Subcontractor. Half of the total retained sum

shall be released upon the issue of the Practical Completion Certificate. The

remaining half shall be released upon the issue of Making Good Certificate which is

usually 12 months (or otherwise months agreed in contract) after the Practical

Completion Certificate (Ramus, 1996).

3.3.5 Accurate Graphical Format of Cash Flow Forecast

The retention shall be taken account of in the accurate cash flow forecast. There will

also be a long period between practical completion and the final certificate where the

cash flow is static with a final jump at the end which signals the return of the final

part retention (RICS, 2005).

3.4 Cash Flow Curve

In the following, the topics about 1) definition of cash flow curve, 2) function of cash

flow curve, and 3) preparations of the cash flow curve are discussed.

3.4.1 Definition of Cash Flow Curve

The cash flow curve is produced by a detailed estimate combined with a detailed

construction schedule. It is a graphical estimate of when the contractor expects to

have work in place and the estimated cost of that work. It is often one of the first

things the employer will ask the project manager (Len et al., 2005).


28

3.4.2 Function of cash flow curve

In the design process, cash flow cures are often used as a guide to the employer for

the predicted cash flow forecast (RICS, 2005). The cash flow curve serves the

function of a forecast to the employer of anticipated monthly payment to the

contractor for the completed work.

3.4.3 Preparation of cash flow curve

The cash flow curve is prepared by applying the estimated costs across the schedules

of activities. For example, if an activity has a value of $100,000 and takes five months

to complete, then $20,000 is spread over each of the five months. The other costs such

as the administration, taxes, and fees should be distributed proportionately over the

entire project. The cost data are summed at the bottom of the schedule for each month

to develop the anticipated monthly expenses (Len et al., 2005).

3.5 Cumulative Cost Curve

The discussion about cumulative cost curve will cover 1) the definition of cumulative

cost curve, and 2) the function of S-curve.

3.5.1 Definition of Cumulative Cost Curve

The cumulative cost curves are graphic representation for the planned expenditures

for a project. In the cumulative cost curve, x-axis represents the time periods and the

y-axis represents the cumulative costs expended at any particular time. The curve is

created by connecting the cumulative cost points of a project during each time period

over the entire duration of the project. The cumulative cost curve is usually in the

shape of a somewhat flattened “S” due to the higher expenditures during the middle of

the project and the lower expenditures in the beginning and end of the project. Thus,

the curve is also usually referred as “S-Curve” (James, 2008).

3.5.2 Function of S-Curve

As reported by James (2008), the S-Curve has many valuable functions in the

construction project management as to:


29

1) Help project manager see the total planned budget and communicate it in a

shorthand way;

2) Serve as an excellent briefing tool and easily to be read;

3) Serve as an excellent way of summarizing progress including both planned

and actual cost curves on the same graph for comparison; and

4) Analyze the earned value.

Chapter 4: Research Methodology

30

4. CHAPTER 4: RESEARCH METHODOLOGY

4.1 Introduction

The fundamental knowledge of the Building Information Modeling, cost management

and quantity surveying practices has been discussed in the literature review. With the

established knowledge, a pilot study about the innovative generation of cost

management using the 5D BIM technology will be carried out in order to find out

whether BIM can be used by the Quantity Surveyors for the cost management in the

cash flow forecasting.

4.2 Background of Research

With the development and maturing of BIM technology, the adoption of BIM

technology in the construction industry is inevitable. In fact, the Hong Kong Housing

Authority has set the targets to apply BIM to all new projects from design stage by

2014/2015 (Fung, 2011). BIM is expected to have a marked impact on the existing

practices for professionals in the AEC industry including the Quantity Surveyors. In

this dissertation, a pilot study of applying 5D BIM technology in the cost management

will be conducted to investigate the feasibility and efficiencies of using 5D BIM by

Quantity Surveyors. The difficulties encountered during the study will be discussed.

Some solutions for the problems will be suggested, while for some problems which

cannot be solved will be considered as the limitations of BIM adoption.

4.3 Research Framework

In order to fulfill the research objectives, a comprehensive research process including

literature review, pilot study, discussion and analysis of findings, conclusions and

recommendations are programmed at the outset of the research. The framework of the

research process is illustrated in Figure 4.1.

Analysis of Findings

•Benefits

•Difficulties and Problems

•Suggested Solutions

Recommendations &

Suggestions for Further

Literature Review

•BIM (development of BIM, 4D, 5D,

model-based estimating, standards

and policies worldwide, etc.)

•Construction Cost Management

flow forecast, cumulative cost curve,

etc.)

Discussion and


Benefits

Difficulties and Problems

Suggested Solutions

Conclusions,

Recommendations &


Study

Literature Review

(development of BIM, 4D, 5D,

based estimating, standards




Discussion and



Suggested Solutions

Conclusions,

Recommendations &


Study

Literature Review




Construction Cost Management (cash




Recommendations &


Figure 4.1

31



(cash


•3D Model Drawing

measurement rules )

•BIM Quantities Takeoff and

Measurement

CostX; Measure by floor)

•BQ Production and Pricing

Use current tender price of related BQ to

reflect true price level)

•Construction Programme Planning

(Planned and actual construction

programme planning by assumption)

•Cash Flow Forecast

model with schedule and cost; Formulate

schedule for retention money deduct and

release; Create planned and actual cash

flow)

•5D Simulation

activities and simultaneous schedule and

cash flow)

1 Research Framework

Chapter 4

Data Collection

and Viability

Checking

Conduct Pilot Study

3D Model Drawing

measurement rules )

BIM Quantities Takeoff and

Measurement(Use Revit schedule and


BQ Production and Pricing



Construction Programme Planning



Cash Flow Forecast



release; Create planned and actual cash

flow)

5D Simulation (Visulation of construction

activities and simultaneous schedule and

cash flow)

Research Framework

4: Research Methodology

Data Collection

and Viability

Checking

Conduct Pilot Study

3D Model Drawing (Follow HKSMM 4

measurement rules )

BIM Quantities Takeoff and

(Use Revit schedule and


BQ Production and Pricing (Bills by floor;



Construction Programme Planning



Cash Flow Forecast (Link elements in



Documents

This document is downloaded from CityU Institutional ...lbms03.cityu.edu.hk/oaps/ca2013-4513-lms979.pdf · technology. The steps in the pilot study include 3D model drawings, BIM