Computing Building Costs : IDEA Whose Time Has Come

With a site plan neatly centered on his computer screen, William Turner, a vice president of 3D/International of Houston, summoned a sample 12-story structure and effortlessly positioned it on the site.

He then called for design changes in a simulated pre-planning meeting of a project team.

The demonstration focused on an innovative computer software program, known by the acronym IDEA (Integrated Design and Economic Analysis)--a new tool, being introduced to the California real estate industry through Baker-3D/International, Los Angeles, and developed by the parent company.

Reportedly the only available system in its present application, IDEA allows architects and developers to experiment visually with a “what if” graphic format, discarding or incorporating a vast range of design choices and to immediately see how the total building economics are affected.

Assuming the role of developer with a predetermined budget, the visitor experimented with design options and, when additional floors were requested, algorithms built into the spreadsheets instantly projected new construction costs to reflect the additional structural expenditure for heavier columns.

Additional Interest Costs

Within seconds, the program had foretold what end-result costs would be involved for the proposed design option, including the additional interest for interim financing for the longer construction period.

“The program provides a foundation for design, facilitates teamwork, speeds feedback, documents analyses and decisions and, hopefully, helps pare down overall costs for developers,” said Danford M. Baker, president of Baker-3D/International.

“Each new suggestion resulting from team input is examined, calculated, dissected and, in a flash, integrated into the total project cost for further dickering and evaluation. With each change, the team is apprised on how it has affected the total building economics,” Baker said.

The basic IDEA components include: a building description using computer-aided design (CAD) drawings or words and numbers; cost estimate, based on historical building type data, cost of materials and an economic analysis that may include soft and hard costs, operating and financing costs, replacement costs and multi-year cash flows.

Baker said in using IDEA, assumptions are made about construction costs, rent rates or market conditions. “These factors are, of course, influenced by future events. We can never accurately predict changes in the future, but what the computer model gives us is useful feedback information for judgment decisions and allows us to evaluate a variety of options, given the same set of facts.”

Turner started to work on the system last fall as a company-funded research project, and came up with the concept name--Integrated Design and Economic Analysis. He also wrote the programs capable of transferring CAD drawings, measuring everything three-dimensionally, and linked directly to performance spreadsheets.

Original Concept

The original concept was first implemented as a pro bono project for the federal government in Washington, for the Judiciary Office Building of the U.S. Courts. Presented to the architects of the capitol and secretary of transportation in December of 1986, IDEA aided the firm in its assignment to develop a major new federal administrative building.

“In a broader sense, one would best describe the concept as an economics tool and framework for team collaboration that allows us the flexibility to study the many options available within a given project before putting pen to the paper. That is the best possible foundation for any viable product,” he stated.

“Other programs in use by architects and engineering firms are capable of factoring in building costs,” Baker added. “But what is different in the software program developed by 3D/International is that it is capable of measuring--in virtually seconds--just about anything connected with a project’s construction costs and its long-term performance.”