Estimating & Tendering

Methods of Estimating & Tendering

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A contractor may use a combination of estimating methods in developing a cost for a design and build project 1. Approximate Estimating Elemental Estimating Cost Modeling 2. Later Stage Estimating ( Multi Rate Methods) i. Preliminary Estimate a.Methods of Estimate Methods of Estimating / Type of Construction Estimate Methods of estimating. Unit Method Cube Method. Single Rate Methods i. used in the early stages of cost planning. ii. ii. Story Enclosure Unit Method Superficial Area Method b. Contractor detail estimate i. iii. iii. Engineering Estimate 3. ii. Unit Quantity Method Total Quantity Method 2 . iv. depend on reliable historical cost data whereas an analytical approach to estimating is based on applying current prices for resources to a well-developed design.

and hauling distances.purchase equipment Purchase on lease. or smaller excavators in greater number. Equipment characteristics Type of equipment considered suitable for the task. and the means of transportation Daily or hourly forecast of planned production Distribution of work at site Quality of work and tome allowed for completion Interference expected and interdependence with other operation. Task Consideration Nature of work This cost depends on the size of the job. 3 . serviceability condition and delivery time of each equipment available. Site condition:Accessibility to location Maneuverability at site primary site condition factors are type of material to be handled. Larger volumes of excavation will require larger excavators. The type and condition of the soil is important when choosing the most adequate equipment since each piece of equipment has different outputs for different soils. Moreover. models and size of special purpose.WHAT ARE CONSIDER SELECTION OF EQUIPMENT COST? Equipment costs rank second to labor costs in term of uncertainty and in their effect on the outcome of anticipated profit for a construction project. Physical constains onsite. the distance of transportation. Operating costs Re-sale or residual value after use Replacement costs of existing equipment Commercial considerations Buy second ± hand or new equipment Rent equipment Hire. Economic considerations Owning costs. Many factors can influence the selection of equipment in the construction project. Make. one excavation pit could have different soils at different stratums. and general purpose equipment available that can handle the task Production capability. These factors are considering equipment selection.

However. The units adopted to facilitate this analysis depend on the type of project under consideration. Site condition Specification changes Market conditions Regional changes Inflation Using this estimating method can generate a rough estimate quickly. this method ids often used to determine the very first notion of a price in early discussions of a project and as a crude means of comparing the known costs of differet buildings.costs per car space The technique is based on the fact that there is usually some close relationship between the cost of a construction project and the number of functional units it accomodates. 4 . This method is extremely useful on occasions where the building¶s client requires a preliminary estimate based on little more information than the basic units of accommodation.costs per bed place Roads ± per Kilometers Car parks . Functional units are those factors which express the intended use of the building better than any other. but the lack of accuracy will render it of little use in the cost planning procedure outlined earlier.UNIT METHOD ESTIMATING The unit method estimating consists of choosing a standard unit of accomodation and multiplying an approximate cost per unit Estimate = Standard units of accommodation X Cost/Unit for example: Schools ± costs per pupil place Hospitals .

The building volume method became very popular in some European countries like in Germany and Switzerland. Costs per cubic meter may be difficult to find in countries where the method is not current. Calculation of volume is subject to rules of measurement 1. for example. A point three quarters from the ceiling to the apex of the roof where roof space is occupied b. Buildings with distinct types of occupation should have corresponding volumes assessed separately. like building types. foundations and external works ought to be assessed separately by using cost comparisons or approximate quantities.CUBE METHOD ESTIMATING The Cube method estimating is specific for building projects and aims to overcome the current criticism to the floor area method that does not take into account possible variations of the storey height. where building costs are often expressed in cubic meter prices. A point midway between the ceiling and the apex of roof 2/3 where roof space is un-occupied ii. The total cost of the project will be given by: Estimate = Volume X Unit Cost (Cost/m ) External plan area X height X Cost (cost/ m3) In order to use the method. Actually. Measured from external faces of external walls 2. the building volume must be first assessed and explicit rules exist in some countries for that purpose. Specific works like excavations. For pitched roof. Height of the building is taken from the top of foundation to a. i. shopping areas and office areas in a commercial building. proportion of wall area per floor area. car park areas. A point 610mm (2feet) above the roof structure 3 5 . quality of finishes and so on. for example. such costs depend on a number of variables. For Flat roof i.

measured from the internal face of external walls and subject to the following weightings. measured on the external face of the walls:  basement wall area X 2 (basement floor to ground floor level)  Above ground wall areas X 1 (ground floor to ceiling of top floor with no deduction for openings) When this method was suggested. overall height. it aimed at overcoming the problems detected in other single-rate estimating methods.STOREY ENCLOSURE METHOD Storey enclosure unit ± It measure the area of external walls.15 for each successive floor 2. vertical position of the floors. to the extremities of eaves: roof x 1. extra costs of providing usable floor areas below ground. the method was never totally adopted by construction professionals because it requires much more calculations than other single-rate methods and because the rates needed cannot be directly extracted from historical data Storey enclosure unit Method Estimate. Roof areas are measured in its plan projection.30 and add 0. 6 .  Historical data are not readily available  Provides a single rate  Take into account of difference in plan shape total floor area. External wall areas. Unfortunately.  basements X 3  ground floor X 2  first floor X 2.  Not much used in practice and involves greater calculation. floors and roof areas (effectively enclosing the building) and multiplying them by an appropriate weighting factor. storey height. Floor areas. by taking into account variations in plan shape and storey height.15  second floor X 2. 3.

7 . incoming services and drainage which can be signi¿cantly different for similar buildings.such as warehouse projects or open-plan of¿ces. The main reason for the popularity of the Àoor area method is its simplicity.demolitions.There are few rules to remember and the cost per square metre is well understood by property developers.This method also works well with certain external works contracts such as concrete paving or macadam surfacing.shape. There are many buildings where the unit of accommodation method is impracticable.FLOOR AREA METHOD ESTIMATING This estimate is an approximate cost obtained by using an estimated price for each unit of groos floor area.Previous similar building costs are used by dividing the construction cost by the internal Àoor area.ground conditions and standard of ¿nishes.It is unlikely that a contractor would risk signing a contract on this basis.A proposed building is measured at each Àoor level (between inside faces of external walls). This method of estimating facilities costs is frequently used in building and residential home construction.number of storeys.no deductions are made for internal walls. Sometimes contractors are asked to quote for building work using sketch drawing sand a square metre price.In these cases the super¿cial floor area method is found to be reliable with an accuracy of 10% to 15%.Subjective judgements are made for size.A separate assessment should be made for external works.The price must accurately reÀect the amount and speci¿cation of works. but speci¿cation adjustments are much more dif¿cult to estimate.Adjustments can be made for location and inÀation.stairs or lift zones.First a clear scope of works would be needed together with a site survey and soil investigation report.services.

On the other hand if the number of units is known. The accuracy of the estimate will be influenced by the state of the design information. It usual to base the pricing of such estimates on historical cost date gleaned from the analyses of the costs of similar buildings adjusted to account for any fluctuations in price levels and for project idiosyncrasies. 8 . APPROXIMATE ESTIMATES The object of the exercise is to estimate the cost to the employer of their desired scheme. it might be found that the cost of providing a study bedroom in student accommodation is £20000. Finally. If a client has an amount of money to spend (a budget) then it would be possible to consider the likely number of functional units which can be provided. the unit method is useful where a simple and quick cost range is needed in the early stages.in different locations. however to adjust the costs for speci¿c projects. so it is usual to base such an estimate on place costs or net area/volume costs. Providing there are recent comparable data available. both drawing and specification notes.a budget cost (usually expressed as a cost range) can be calculated. when the design an even more accurate estimate can be achieved by basing it on the measured accurate quantities in the bills of quantities.SINGLE-RATE APPROXIMATE ESTIMATING Unit of accommodation method This method is commonly used by national bodies such as the education and health services at the inception stage of construction. From experience. A preliminary estimate is often required when there is little or no information available.with varying ground conditions and so on. as the design information is developed it is possible to produce more refined estimate based upon element unit quantities or measured approximate quantities. Using this ¿gure an expenditure of £12 million would provide accommodation for approximately 600 students. It is dif¿cult.

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the cost of which must be recovered on the job by the contractors. Little may known about the contractors ± their record. poor organization ± late completion. Cost of tendering is expensive to the client who must bear the cost of reproducing multiple copies of drawing. This method was probably the traditional method until more sophisticated techniques were accepted. type. It is lengthy operation requiring skilled estimating. private sector clients generally avoid open tendering. 4. which does not allow favoritism ± a valid point for local authorities Who are publicly accountable. Open tendering secures maximum competition.OPEN TENDERING In this procedure. etc. But In many countries. 3. b. 4. 10 . This method of tendering has the benefit of attracting number of tenders and hence the price the obtained are usually very competitive. experience. The use of open tendering on public sector contracts is required by law in several developing countries. The advertisement will carry brief details of the location. 3. Poor work ± a large number of. The process begins by the placing of an advertisement in trade. specialist subcontractors delayed. Choosing a low tender may result in a. or even permanent. Unknown contractor can tender for the work 2. practically any contractor can submit a bid for the job. There is no obligation to tender therefore all tenders received will be genuine. bills of quantities. There is no restrictive list of tenders. Disadvantage of open tendering 1. 5. The lowest tender may not necessarily be a ³bargain´. etc. A contractor may be awarded work for which he has little or no experience and which he be illequipped to deal with. etc. 6. Advantage of open tendering 1. The wrong contractor can be chosen. defects may occur unless there is close supervision by the client¶s agent. scale and scope of the proposed works. magazines and newspapers highlighting the significant features of the project. 2. The higher the proportion of unsuccessful tenders the higher the cost to be recovered on the job. standard of workmanship.

The employer or the client know the capacity of the con tractor accepting lowest tender. Without rescrutniziny the register selecting names of can tractors lead the client to undergo difficult in doing construction work. All the construction firm and the construction deportment are main taint a resister of selective contractors. 11 . Disadvantages. 1. 3. 2. 4. 3. Some con tractors may coat too higher rates for the con strum action work because they didn¶t want to do the set job but for the sake of getting next tender docents from the client. We save time in a diver tiding & publishing as in open tender. The a bore firm and the deportments wants to do a good job in there construction work then they select name of boor 7 contractors from the register whom be consider suitable for the work. The tendered rate may be hig when compared with the open tender but when consider the standard & good management it brings advantage to the client in the long run. Advantage:1. These sleeted tenders may be insert in the register by adverb tiding in papers or firm and any other technical firms every year all construction firms & departments the list of registered contractors must res cutinized leaving some names add some new names of the con tractors in the registered list.SELECTIVE TENDERING. on need for the engineer to advice the employer against accepting the low priced tender from a contractor whose technical competence doubtful. This ensure that reputable firms tender. This type of contract the client some time well know the contractor this leads to give some kind of help by the client more core needed in selective contractors. 2. All the contractors may be in the same status so they get more profit & the work is also in good quality.

can use certain checks. the previous experience of such schemes. The distinct advantage to both the contractor and the client is that tendering costs are minimized. The Code states that tenderers should be given five weeks to prepare their tender. arise from a desire to involve the builder in the design phase of a project. Negotiated tendering does not facilitate competition in the tender process but the client. An agreement will be made with the successful builder regarding the cost of the builder's input before the commencement of the design stage. Those items which cannot be priced on this basis are priced by the builder and are subject to negotiation. the personnel to work with the design team and their previous experience. suitable builders are selected in the same manner as for single stage selective tendering. Instead they will invite each tendering builder to a meeting to discuss the builder's approach to the project. a summary of the client's requirements and a notional bill of quantities. Finally following a successful negotiation the builder will make a formal offer to carry out the work for the sum of money negotiated. It is the combination of these meetings and the preliminary tenders which determines the successful builder. Many design teams. as stated above. A standard form of contract is completed. and this is formally accepted by the client. The tender documents sent to the tendering contractors comprise outline sketches of the scheme. It recommends that the tender is submitted under the same rules as for single stage selective tendering. and a list is compiled of those willing to take part in the initial competitive stage. errors etc. This method is ideal where the work is of a unique nature and the client is confident that there is only one contractor suitable to undertake the work or where the client has a strong preference to use a particular contractor. to ensure a competitive price is negotiated. do not use the preliminary tender based upon the notional bill as the sole method of selection.NEGOTIATED TENDERING When negotiated tendering is adopted the client and a preferred contractor will enter a contract through direct negotiation. TWO STAGE SELECTIVE TENDERING The majority of negotiated tenders. The notional bill of quantities is a document containing an outline specification and provisional item descriptions and quantities. The method is frequently used amongst private sector limit the use of this method to project of a unique nature. First. This method of tendering allows the choice of a builder who is capable and keen to contribute to the design while retaining the important element of competition. however. The approach will be discussed in terms of the builder's contribution to the design. with the same procedures for notification. Bills of quantities are prepared by the quantity surveyor and where possible priced at the rates in the notional bill. The aim is to ascertain whether the builder and the design team can work well together. 12 . The Code of Procedure for Two Stage Selective Tendering describes a method which allows the negotiation of a tender with an element of competition. The design stage is undertaken.