Cost model: Building services

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Services installations are crucial to the smooth running of construction projects, as well as the finished product, but their complexities are too often ignored. Mott Green and Wall, the specialist building services team within Davis Langdon & Everest, examines the specification, procurement and costs of a City office’s building services

Why building services are becoming more complicatedBuilding services installation plays a vital role in the successful functioning of a building and its occupants. Although issues related to user comfort, low-energy consumption and sustainability have gained a higher profile, most organisations are absolutely dependent on the security of their IT operations and communications systems. In response to these demands, a number of trends have emerged in the design of M&E systems:
Complexity of systems
The principal drivers behind the increasing complexity of M&E systems have been:

The need to build in flexibility This could include providing multiple services risers and control zones to allow the subdivision of floor plates.
Modern working patterns Organisations require more flexible work settings so that they can support team-based working, hotdesking or quiet work carried out in dedicated cellular spaces. The building services installation needs to allow local control and flexibility so that the building can support these different work settings. Research by architect DEGW and the BRE (New Environments for Working, published in 1997) concludes that distributed systems, such as fan coil based air-conditioning or mixed-mode systems provide the most suitable mechanical services solutions for offices designed for flexible working. Similar flexibility requirements also need to be considered when developing the specification for the lighting, power and communication systems.
Tenants’ bespoke requirements Tenants often require enhanced control systems, dedicated air treatment for specialist areas, and investment in back-up installations to provide secure, diversified power supplies and systems to reduce or eradicate harmonics in the power supply.
The growing complexity of IT installations
Increasing investment
Increased complexity and functionality comes at a cost, and the capital cost of building services fit-out installations have increased significantly, in real terms, over the past 10-15 years. A massive rise in investment in secure power supplies and uninterruptible power supply systems has seen total electrical fit-out costs increase by 30-40%, and increasingly sophisticated controls systems and requirements for dedicated plant, to areas such as communications rooms, have also increased mechanical services costs by 15%. By contrast, the cost of communications and IT installations have not increased significantly over the past 10 years, despite a huge growth in the number of points required.
Range of design options
In addition to the increase in the cost and complexity of M&E systems, the range of options available to the designer has also increased. For instance, chilled ceilings have become a credible alternative to air-conditioning in city-centre developments. And the increasing modularisation of main plant means that the specification can be tailored to the particular needs of the project.
On air-handling units, for example, a wide range of options for heating, humidification, heat reclaim and so on need to be considered by the project team. The selection process should consider key issues such as performance and initial capital costs, as well as floor area take-up, programme, methods of installation, waste reduction, ease of maintenance, energy consumption and replacement cycles.
Sustainability
Sustainability needs to be examined from two perspectives: sustaining the business and sustaining the environment.
Systems need to be configured so that an organisation can respond to a change in working patterns with the minimum of disruption. Sustainable features include plug-in IT, the ability to re-stack organisations without having to reconfigure main plant, or the selection of plant in accordance with an anticipated refit and refurbishment cycle.
Green issues currently receive limited attention on many developments because there is often no economic case and no financial incentives available to support the investment. Low-energy options such as natural ventilation or ground water cooling are now widely adopted where their specification does not affect building performance or financial viability. However, it is hard to establish a business case for systems that increase the net present cost of a development, such as ice storage or photovoltaic cells.
Causes of poor performance on M&E installationsThere are many areas of project performance – such as over-specification, cost certainty, on-site performance, testing, commissioning and client handover – where improvements can be made. The following issues can be addressed:
Client briefing
The specification of M&E services involves complex trade-offs between performance, floor space take-up, capital and whole-life costs, maintenance and renewal strategies, and environmental concerns. Different clients have different priorities, which need to be reflected in the design.
However, building services are often not discussed in sufficient detail at meetings, as the client and project team are more concerned with, and able to understand, broader design issues associated with aesthetics and function.
Input from consultants and contractorsThe designer’s focus on aesthetic issues can also have an effect on costs and functionality. In particular, the use of non-standard or non-modular components causes difficulties. Circular luminaires in office areas, for example, require a higher density of fittings to achieve an even illumination than standard luminaires. The cost and maintenance implications of bespoke manufacture should be considered at an early stage.
Some main contractors do not have the expertise to effectively manage and co-ordinate the work of M&E specialists. A contractor taking a cautious approach to the detailing of a builder’s work in connection with services, for example the use of over-sized brackets and supports, can add to site installation costs.
The cost management of M&E requires specialist knowledge founded on an engineering-based approach to identify the best-value design options and to appreciate the full implications of design changes.
Maximising valueSpecifying extra capacity is a major source of poor value in M&E installations. It is more efficient to provide the facility to accommodate additional plant if and when it is needed. Institutions and agents are particularly influential in setting excessive requirements for extra capacity. The design criteria table above shows that there is a wide variation of standards adopted on projects and considerable scope for rationalising building services design.
The end value of a scheme will depend on the client’s objectives and investment strategy. Key variables include capital and running costs, space efficiency and the maintenance regime. All of these factors can be assessed on the basis of whole-life costs.
The space taken up by plant rooms, risers and lift shafts can have a significant effect on end value. All-air systems, such as variable air volume, require 60% more riser space than comparable fan-coil unit-based systems, contributing £160/m² to the costs in the table.
Maintenance and refit cycles also need to be considered. Other than plant, displacement ventilation systems have no periodic replacement requirements, whereas fan-coil units have a working life of 15 years. Where a client anticipates a refit over a short timescale, investment in high-quality systems with an extended service life may not be justified.
How to design M&E installations more effectivelyThe performance and cost effectiveness of building services installations can be enhanced through various strategies, such as:
Eliminating complexity Overly complex building management and lighting control systems, often specified by clients and the project team, should be avoided.
Putting plant on the roof Locating main plant at roof level increases useable floor area, freeing up basement space for the user, and reduces the costs of vertical distribution and the surface area of ducts and risers. Boiler flues alone cost £350/m, so significant capital cost savings can be made if the building design and planning authorities permit roof-level plant. Easier access for maintenance and replacement of plant also reduces running costs.
Using modular plant Modular plant offers all the benefits of prefabrication and enables quicker installation, testing and commissioning, much of which can be completed off site. The compact size of most modular plant can also reduce the size of plant rooms.
Standardisation The design team might not like it, but standard components can make a major contribution to eliminating project risk. Use of bespoke products can affect quality control, co-ordination and the certainty of programme. The premium charged by contractors for fabricating bespoke components could outweigh the benefit of the use of the non-standard fittings. Replacing components for bespoke products can also cause problems.
Using alternative and labour-saving technologies A good example of alternative technology, which is still relatively uncommon, is the specification of electric reheat in fan-coil units instead of hot water heating. If electric reheat is adopted, boilers, risers and on-floor hot water distribution can all be eliminated, reducing costs and plant room space. Electric reheat systems also save energy, as the heat source is only switched on when heating is required. Direct gas-fired air handling units can also reduce costs and simplify site installations.
Site labour requirements can be reduced using innovations such as suspending ductwork on cable supports (gripples) rather than on unistrut; splitting the main incoming supply by locating high-voltage switchgear closer to the source of loads (this also simplifies the electrical cable distribution and reduces cable costs); maximising the use of flexible ductwork to simplify the primary ductwork design; using armoured cable instead of conduit; and using plug-in wiring to minimise requirements for on-site hard wiring.
Procurement of building servicesAn appropriate procurement strategy for building services depends on:
The clear demarcation of the design and co-ordination responsibilities between the designers and contractors.
The pre-selection of specialist contractors.
The early involvement of specialists in design and co-ordination so that problems can be dealt with before they disrupt materials procurement or work on site.
The development of a non-confrontational approach to problem solving.
The use of competitive tendering to deliver best value rather than lowest cost.
The programming of M&E site works to ensure that contractors are given clear possession of large working areas. In practice, it is often more efficient to delay bringing M&E contractors on site until unobstructed access can be provided. Delaying the start date for the M&E installation will not affect the overall project duration as long as unobstructed access to working areas can be provided.
Conventional procurement based on competitive lump-sum tenders does not generally provide the right conditions for the successful letting of specialist building services contracts. Issues that require careful consideration include:
The importance of basing the tender on complete information according to the defined division of responsibility for design.
The clear definition of design responsibility. For example, there are multiple definitions of a services engineer’s “abridged duties”, and it is important that the tender document provides an explicit definition. Engineers need to be specific about the extent of their responsibility for design and then should consistently work in accordance with the definition.
Tenders for M&E services should be obtained from known and approved contractors only. The tender assessment should take into account the quality of the contractor’s team as well as prices.
Fully quantified schedules of rates should be obtained as part of the tender documentation in order to check pricing levels and to establish the basis for post-contract cost control.
Where feasible, a two-stage tender approach is the most effective approach for appointing M&E contractors. The early appointment of contractors, based on the competitive tendering of preliminaries and overheads, facilitates the early involvement of specialists in design development, co-ordination and procurement of specialist plant and materials. The benefits obtained from the contractor’s input into the economic layout of ductwork and pipework, together with the improved co-ordination of works on site, will outweigh the loss of benefit resulting from the reduced levels of competition associated with two-stage tenders.
Cost breakdownThe cost breakdown features the building services installation of a high-quality City of London office development, completed to a Category A finish, with a gross internal floor area of 22 000 m2. The costs, based on standard engineering solutions, are compared with target costs that illustrate the potential for cost savings using a value engineering approach.
The installation is based on a four-pipe fan-coil air-conditioning system. Cooling loads, lighting and small power provision are specified in accordance to standards set in the British Council for Offices specification. In the target cost model, simplified engineering solutions that reduce costs, such as electric reheat to fan-coil units, are specified. Best-practice measures relating to the positioning of plant and risers also reduce capital costs and increase useable floor area.
The costs in the model are based on packages procured by construction management. Costs are current at first quarter 2000 price levels.
The costs of the trade contractor’s preliminaries are included. The following items are excluded: external services; below-ground services; tenant enhancements to the base build specification; fit-out works beyond the scope of category A works; specialist services to computer rooms and so on; wiring and equipment to voice, data and other IT installations. The construction manager’s fees and on-costs, professional fees, contingencies and design reserve, and VAT are also not included. Adjustment should be made to the costs to account for variations in specification, procurement type, programme and market conditions. Any adjustment of costs for location should take into account local variations in labour costs only, as the costs of main plant and materials are relatively consistent throughout the UK.