Determining the Project Cost
Project cost is based on the estimation of the construction cost plus the addition of costs associated with moveable equipment, professional fees, administrative costs, and the owners’ reserve. Each of these costs must be understood by the nurse executive because decisions made by the clinical planning teams directly affect these costs. If the hospital must also acquire new land for the building to be completed, this cost is also included in the calculation of the total project cost. Site acquisition cost (line item F) is a fixed cost and is simply added to the construction cost in determining the total project cost.
Moveable Equipment or Furniture, Fixture, or Equipment
Fixed equipment was previously described as any equipment or furnishing attached to the building itself, whereas line item G relates to any furniture, fixtures, or equipment that is not permanently fixed to the building. One architect described it this way. ‘‘If you turn the building upside down and shake it, it is all the things that would fall to the bottom.’’ Line item G is estimated to be approximately 22% to 25% of the construction cost (line item E). Decisions made about patient beds, over-bed tables, side tables, lighting systems, furniture selection, and medical equipment all affect the total project cost. It is critical for the nursing leadership to identify what existing equipment and furnishing will move to the new building or renovated space or if all new furniture and equipment will be ordered. Integrating existing furniture or equipment can dramatically affect the total project cost. Depending on the financial strength of the hospital, the nurse executive may opt to purchase some of the medical equipment in advance of the new building’s opening through the usual capital acquisition process. Making this decision will also decrease the total project cost because the newly purchased equipment is placed into operation before the new project is completed.