1

Construction Cost Analysis

Lt. Col. Dr. Abbas Atef Hassan

2 Bid Unbalancing
What is bid unbalancing?
Raising the bid prices on certain bid items and decreasing the bid prices on
others, while maintaining the same total bid amount for the project

Why do bid unbalancing?

 Maximize early income (improve cash flow)
 Maximize profit
 Other

Lt. Col. Dr. Abbas Atef Hassan

3 Bid Unbalancing
Maximize Early Income
 Finance cost/cash flow unbalancing in contrast to the error exploitation
unbalancing.
 Cash flow unbalancing involves the contractors marking up prices on
quantities that are scheduled for early completion trading off quantities for late
completion

Lt. Col. Dr. Abbas Atef Hassan

4 Bid Unbalancing
Maximize Early Income
 Finance cost/cash flow unbalancing in contrast to the error exploitation
unbalancing.
 Cash flow unbalancing involves the contractors marking up prices on
quantities that are scheduled for early completion trading off quantities for late
completion

Schedule of Values is a Revenue Schedule and has Nothing to do with Cost

Lt. Col. Dr. Abbas Atef Hassan

5 Bid Unbalancing- Maximize Early Income
How to do bid unbalancing to maximize early income?
 Raise bid prices of items that will be finished earlier in the project.
 Start from the item that will be finished the earliest in the project.
 Decrease bid prices of items that will be finished later in the project.
 Start from the item that will be finished the latest in the project.
 Deal with total items price ( increase or decrease by max 20% ) then
calculate unit price based on the new price
 Maintain the same total bid price.

Lt. Col. Dr. Abbas Atef Hassan

6 Bid Unbalancing- Maximize Early Income
A bid form for a highway bridge project
Item Estimated Unit Bid Sequence
Bid Item Unit
No. Quantity Price ($) Total ($) Number
1 Excavation CY 3,250 17.09 55,536.24 1

2 Backfilling & Compaction CY 1,540 17.26 26,575.21 5

3 Concrete-Footings CY 435 225.88 98,257.24 3

3 Concrete-Abutments CY 467 304.58 142,238.68 4

4 Concrete-Slab Sq.Ft 580 129.70 75,224.28 7

5 Steel Piles Ft. 7,510 60.62 455,235.68 2

6 Steel Girders Lb. 69,010 1.96 135,214.93 6

7 Reinforcement-Footings Lb. 44,100 1.69 74,457.54 3

8 Reinforcement-Abutments Lb. 58,050 2.04 118,254.25 4

9 Reinforcement-Slab Lb. 25,870 2.19 56,583.35 7

10 Guardrail Ft. 258 288.23 74,363.39 8

11 Painting LS 1 18,540.00 18,540.00 9

Total Lt. Col. Dr. Abbas Atef Hassan

1,330,480.79
7 Bid Unbalancing- Maximize Early Income
A bid for a highway bridge project
Unit Bid Unit Bid (Unbalance)
Item Estimated Sequence
Bid Item Unit Price 1 Total 1 Price 2 Total 2 Note
No. Quantity Number
($) ($) ($) ($)

1 Excavation CY 3,250 17.09 55,536.24 63,866.68 1 Raised by 15%

Estimated Quantity
2 Backfilling & Compaction CY 1,540 17.26 26,575.21 22,588.93 5 Decreased by 15%
Raised by

𝑩𝒊𝒅 𝒕𝒐𝒕𝒂𝒍 𝟐
Concrete-Footings CY 435 225.88 98,257.24 107,521.93 3
3 9.4290196%

3 Concrete-Abutments CY 467 304.58 142,238.68 120,902.88 4 Decreased by 15%

4 Concrete-Slab Sq.Ft 580 129.70 75,224.28 63,940.64 7 Decreased by 15%

5 Steel Piles Ft. 7,510 60.62 455,235.68 523,521.03 2 Raised by 15%

6 Steel Girders Lb. 69,010 1.96 135,214.93 114,932.69 6 Decreased by 15%

7 Reinforcement-Footings Lb. 44,100 1.69 74,457.54 85,626.17 3 Raised by 15%

𝑼𝒏𝒊𝒕 𝑷𝒓𝒊𝒄𝒆 𝟐 =
8 Reinforcement-Abutments Lb. 58,050 2.04 118,254.25 100,516.11 4 Decreased by 15%

9 Reinforcement-Slab Lb. 25,870 2.19 56,583.35 48,095.85 7 Decreased by 15%

10 Guardrail Ft. 258 288.23 74,363.39 63,208.88 8 Decreased by 15%

11 Painting LS 1 18,540.00 18,540.00 15,759.00 9 Decreased by 15%

Total 1,330,480.79 1,330,480.79

Lt. Col. Dr. Abbas Atef Hassan
8 Bid Unbalancing- Maximize Early Income
A bid for a highway bridge project
Unit Bid Unit Bid (Unbalance)
Item Estimated Sequence
Bid Item Unit Price 1 Total 1 Price 2 Total 2 Note
No. Quantity Number
($) ($) ($) ($)

1 Excavation CY 3,250 17.09 55,536.24 19.65 63,866.68 1 Raised by 15%

2 Backfilling & Compaction CY 1,540 17.26 26,575.21 14.67 22,588.93 5 Decreased by 15%
Raised by
Concrete-Footings CY 435 225.88 98,257.24 247.18 107,521.93 3
3 9.4290196%

3 Concrete-Abutments CY 467 304.58 142,238.68 258.89 120,902.88 4 Decreased by 15%

4 Concrete-Slab Sq.Ft 580 129.70 75,224.28 110.24 63,940.64 7 Decreased by 15%

5 Steel Piles Ft. 7,510 60.62 455,235.68 69.71 523,521.03 2 Raised by 15%

6 Steel Girders Lb. 69,010 1.96 135,214.93 1.67 114,932.69 6 Decreased by 15%

7 Reinforcement-Footings Lb. 44,100 1.69 74,457.54 1.94 85,626.17 3 Raised by 15%

8 Reinforcement-Abutments Lb. 58,050 2.04 118,254.25 1.73 100,516.11 4 Decreased by 15%

9 Reinforcement-Slab Lb. 25,870 2.19 56,583.35 1.86 48,095.85 7 Decreased by 15%

10 Guardrail Ft. 258 288.23 74,363.39 245.00 63,208.88 8 Decreased by 15%

11 Painting LS 1 18,540.00 18,540.00 15,759.00 15,759.00 9 Decreased by 15%

Total 1,330,480.79 1,330,480.79

Lt. Col. Dr. Abbas Atef Hassan
9 Bid Unbalancing- Maximize Early Income
Total Prices adjusted to avoid change in total bid amount resulting
Unit
Item Estimated Bid Total
from rounding
No.
off
Bid Item Unit
Quantity
Price
($)
Note
($)

1 Excavation CY 3,250 19.65 63,862.50 Raised by 15%

2 Backfilling & Compaction CY 1,540 14.67 22,591.80 Decreased by 15%

Decreased unit price by
Concrete-Footings CY 435 246.77 107,344.95
3 $0.41 from previous table
3 Concrete-Abutments CY 467 258.89 120,901.63 Decreased by 15%

4 Concrete-Slab Sq.Ft 580 110.24 63,939.20 Decreased by 15%

5 Steel Piles Ft. 7,510 69.71 523,522.10 Raised by 15%

6 Steel Girders Lb. 69,010 1.67 115,246.70 Decreased by 15%

7 Reinforcement-Footings Lb. 44,100 1.94 85,554.00 Raised by 15%

8 Reinforcement-Abutments Lb. 58,050 1.73 100,426.50 Decreased by 15%

9 Reinforcement-Slab Lb. 25,870 1.86 48,118.20 Decreased by 15%

10 Guardrail Ft. 258 245.00 63,210.00 Decreased by 15%

Raised unit price by $ 4.21
Painting LS 1 15,763.21 15,763.21
11 from previous table
Lt. Col. Dr. Abbas Atef Hassan
Total 1,330,480.79
10 Bid Unbalancing- Maximize Early Income
A bid form for a highway bridge project
Unit
Item Estimated Bid Total
Bid Item Unit Price
No. Quantity ($)
($)
1 Excavation CY 19.65 63,862.50 63,866.68

2 Backfilling & Compaction CY 14.67 22,591.80 22,588.93

Concrete-Footings CY 246.77 107,344.95 107,521.93
3
3 Concrete-Abutments CY 258.89 120,901.63 120,902.88

4 Concrete-Slab Sq.Ft 110.24 63,939.20 63,940.64

5 Steel Piles Ft. 69.71 523,522.10 523,521.03

6 Steel Girders Lb. 1.67 115,246.70 114,932.69

7 Reinforcement-Footings Lb. 1.94 85,554.00 85,626.17

8 Reinforcement-Abutments Lb. 1.73 100,426.50 100,516.11

9 Reinforcement-Slab Lb. 1.86 48,118.20 48,095.85

10 Guardrail Ft. 245.00 63,210.00 63,208.88

11 Painting LS 15,763.21 15,763.21 15,759.00

Total Lt. Col.1,330,480.79
Dr. Abbas Atef Hassan
11 Bid Unbalancing- Maximize Early Income
 Bid unbalancing to maximize early income applies to:
A: Lump sum contracts
B: Unit price contracts
C: Both

Lt. Col. Dr. Abbas Atef Hassan

12 Bid Unbalancing- Maximize Profit
How to do bid unbalancing to maximize Profit?
 Raising bid prices of expected quantity overrun items
 Decreasing bid prices of expected quantity underrun items (if any)
 If there are no quantity underrun items, decrease bid prices of later items to
maintain the same total bid price and increase early income in parallel
 Maintaining the same total bid price for the project

Payment is based on actual quantities (unit price contract)

Lt. Col. Dr. Abbas Atef Hassan

13 Bid Unbalancing- Maximize Profit
A bid for a highway bridge project
Bid
Item Estimated Unit Actual
Bid Item Unit Total 1
No. Quantity Price ($) Quantity
($)
1 Excavation CY 3,250 17.09 55,536.24 3,250
2 Backfilling & Compaction CY 1,540 17.26 26,575.21 1,540
3 Concrete-Footings CY 435 225.88 98,257.24 620
3 Concrete-Abutments CY 467 304.58 142,238.68 467
4 Concrete-Slab Sq.Ft 580 129.70 75,224.28 580
5 Steel Piles Ft. 7,510 60.62 455,235.68 7,510
6 Steel Girders Lb. 69,010 1.96 135,214.93 69,010
7 Reinforcement-Footings Lb. 44,100 1.69 74,457.54 64,100
8 Reinforcement-Abutments Lb. 58,050 2.04 118,254.25 58,050
9 Reinforcement-Slab Lb. 25,870 2.19 56,583.35 25,870
10 Guardrail Ft. 258 288.23 74,363.39 258
11 Painting LS 1 18,540.00 18,540.00 1
Total 1,330,480.79
Lt. Col. Dr. Abbas Atef Hassan
14 Bid Unbalancing- Maximize Profit
A bid for a highway bridge project
Item Estimated Unit Bid Actual Actual
Bid Item Unit
No. Quantity Price ($) Total ($) Quantity Total price ($)

1 Excavation CY 3,250 17.09 55,536.24 3,250 55,536.24

2 Backfilling & Compaction CY 1,540 17.26 26,575.21 1,540 26,575.21

Concrete-Footings CY 435 225.88 98,257.24 620 165,252.87

3
3 Concrete-Abutments CY 467 304.58 142,238.68 467 142,238.68

4 Concrete-Slab Sq.Ft 580 129.70 75,224.28 580 61,683.91

5 Steel Piles Ft. 7,510 60.62 455,235.68 7,510 455,235.68

6 Steel Girders Lb. 69,010 1.96 135,214.93 69,010 135,214.93

7 Reinforcement-Footings Lb. 44,100 1.69 74,457.54 64,100 127,705.66

8 Reinforcement-Abutments Lb. 58,050 2.04 118,254.25 58,050 118,254.25

9 Reinforcement-Slab Lb. 25,870 2.19 56,583.35 25,870 55,757.67

10 Guardrail Ft. 258 288.23 74,363.39 258 60,977.98

11 Painting LS 1 18,540.00 18,540.00 1 15,202.80

Difference =
Total 1,330,480.79 1,419,635.87
Lt. Col. Dr. Abbas Atef Hassan
$89,155.08
15 Bid Unbalancing- Maximize Profit
A bid for a highway bridge project
Item Estimated Unit Bid Unit Bid Sequence
Bid Item Unit Note
No. Quantity Price 1 ($) Total 1 ($) Price 2 ($) Total 2 ($) Number

1 Excavation CY 3,250 17.09 55,536.24 55,536.24 1

Estimated Quantity
2 Backfilling & Compaction CY 1,540 17.26 26,575.21 26,575.21 5

𝑩𝒊𝒅 𝒕𝒐𝒕𝒂𝒍 𝟐
Concrete-Footings CY 435 225.88 98,257.24 115,943.54 3 Raised by 18%
3
3 Concrete-Abutments CY 467 304.58 142,238.68 142,238.68 4

4 Concrete-Slab Sq.Ft 580 129.70 75,224.28 61,683.91 7 Decreased by 18%

5 Steel Piles Ft. 7,510 60.62 455,235.68 455,235.68 2

6 Steel Girders Lb. 69,010 1.96 135,214.93 135,214.93 6

7 Reinforcement-Footings Lb. 44,100 1.69 74,457.54 87,859.90 3 Raised by 18%

𝑼𝒏𝒊𝒕 𝑷𝒓𝒊𝒄𝒆 𝟐 =
8 Reinforcement-Abutments Lb. 58,050 2.04 118,254.25 118,254.25 4
Decreased by
Reinforcement-Slab Lb. 25,870 2.19 56,583.35 55,757.67 7
9 1.04592%

10 Guardrail Ft. 258 288.23 74,363.39 60,977.98 8 Decreased by 18%

11 Painting LS 1 18,540.00 18,540.00 15,202.80 9 Decreased by 18%

Total 1,330,480.79 1,330,480.79

Lt. Col. Dr. Abbas Atef Hassan
16 Bid Unbalancing- Maximize Profit
A bid for a highway bridge project
Item Estimated Unit Bid Unit Bid Sequence
Bid Item Unit Note
No. Quantity Price 1 ($) Total 1 ($) Price 2 ($) Total 2 ($) Number

1 Excavation CY 3,250 17.09 55,536.24 17.09 55,536.24 1

2 Backfilling & Compaction CY 1,540 17.26 26,575.21 17.26 26,575.21 5

Concrete-Footings CY 435 225.88 98,257.24 266.54 115,943.54 3 Raised by 18%

3
3 Concrete-Abutments CY 467 304.58 142,238.68 304.58 142,238.68 4

4 Concrete-Slab Sq.Ft 580 129.70 75,224.28 106.35 61,683.91 7 Decreased by 18%

5 Steel Piles Ft. 7,510 60.62 455,235.68 60.62 455,235.68 2

6 Steel Girders Lb. 69,010 1.96 135,214.93 1.96 135,214.93 6

7 Reinforcement-Footings Lb. 44,100 1.69 74,457.54 1.99 87,859.90 3 Raised by 18%

8 Reinforcement-Abutments Lb. 58,050 2.04 118,254.25 2.04 118,254.25 4

Decreased by
Reinforcement-Slab Lb. 25,870 2.19 56,583.35 2.16 55,757.67 7
9 1.04592%

10 Guardrail Ft. 258 288.23 74,363.39 236.35 60,977.98 8 Decreased by 18%

11 Painting LS 1 18,540.00 18,540.00 15,202.80 15,202.80 9 Decreased by 18%

Total 1,330,480.79 1,330,480.79

Lt. Col. Dr. Abbas Atef Hassan
17 Bid Unbalancing- Maximize Early Income
Total Prices adjusted to avoid change in total bid amount resulting
Unit
Item Estimated Bid Total
from rounding
No.
off
Bid Item Unit
Quantity
Price
($)
Note
($)

1 Excavation CY 3,250 17.09 55,542.50

2 Backfilling & Compaction CY 1,540 17.26 26,580.40

Concrete-Footings CY 435 266.54 115,944.90 Raised by 18%

3

3 Concrete-Abutments CY 467 304.58 142,238.86

4 Concrete-Slab Sq.Ft 580 106.35 61,683.00 Decreased by 18%

5 Steel Piles Ft. 7,510 60.62 455,256.20

6 Steel Girders Lb. 69,010 1.96 135,259.60

7 Reinforcement-Footings Lb. 44,100 1.99 87,759.00 Raised by 18%

8 Reinforcement-Abutments Lb. 58,050 2.04 118,422.00

Decreased unit price by $ 0.02
Reinforcement-Slab Lb. 25,870 2.14 55,361.80
9 from previous table

10 Guardrail Ft. 258 236.35 60,978.30 Decreased by 18%

Raised unit price by $ 251.43
Painting LS 1 15,454.23 15,454.23
11 from previous table
Total 1,330,480.79 Lt. Col. Dr. Abbas Atef Hassan
18 Bid Unbalancing- Maximize Early Income
A bid form for a highway bridge project
Unit
Item Estimated Bid Total
Bid Item Unit Price
No. Quantity ($)
($)

1 Excavation CY 3,250 17.09 55,542.50

2 Backfilling & Compaction CY 1,540 17.26 26,580.40

Concrete-Footings CY 435 266.54 115,944.90

3

3 Concrete-Abutments CY 467 304.58 142,238.86

4 Concrete-Slab Sq.Ft 580 106.35 61,683.00

5 Steel Piles Ft. 7,510 60.62 455,256.20

6 Steel Girders Lb. 69,010 1.96 135,259.60

7 Reinforcement-Footings Lb. 44,100 1.99 87,759.00

8 Reinforcement-Abutments Lb. 58,050 2.04 118,422.00

9 Reinforcement-Slab Lb. 25,870 2.14 55,361.80

10 Guardrail Ft. 258 236.35 60,978.30

11 Painting LS 1 15,454.23 15,454.23

Total 1,330,480.79
Lt. Col. Dr. Abbas Atef Hassan
19 Bid Unbalancing- Maximize Profit
Summary
 Raising bid prices of expected quantity overrun items
 Decreasing bid prices of expected quantity underrun items (if any)
 If there are no quantity underrun items, decrease bid prices of later items to maintain
the same total bid price and increase early income in parallel
 Maintaining the same total bid price for the project
 Calculate the unbalanced unit price of each bid item by dividing the unbalanced total
price of the item by its ESTIMATED quantity
 Recalculate the total bid price of each item by multiplying its unbalanced unit price by
its estimated quantity (slight change might result due to rounding off)
 IF needed, go back to make adjustment to the unit prices & total prices of items to
EXACTLY maintain the total bid amount
Lt. Col. Dr. Abbas Atef Hassan
20 Bid Unbalancing – Maximize Profit
 Bid unbalancing to maximize early income applies to:
A: Lump sum contracts
B: Unit price contracts
C: Both

Lt. Col. Dr. Abbas Atef Hassan