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CHAPTER III
CONSTRUCTION COST ESTIMATION
AND
3.1 Planning and Design:
BIDDING
Introduction:
 A plan is an image, map or vision setting future goals
for organization and choosing the actions to achieve it.

 There may be several programs within a plan or

development plan.

 "If you fail to plan, you are bound to fail“

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Introduction…
Principles of planning
• The plan should be easily understandable.
• The plan should be realistic, not an optimistic.
• The plan should be flexible.
• The plan should be comprehensive .
• The plan should incorporates the system of monitoring
and controlling.
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Features of Planning:
1. Process
2. Future/goal oriented
3. Intellectual Process
4. Primary Function
5. Pervasiveness
6. Continuous
7. Aims at efficiency
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2.2 Steps and stages of Planning

Steps of Planning:
1) Setting Objective
2) Determining the alternatives
3) Evaluating the alternatives
4) Selecting the best alternatives
5) Formulating the real plan

Stages of Planning:
1) Preplanning
2) Detailed planning
3) Monitoring and controlling
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2.3 Planning by Contractor and Client in

different stages:
Planning by the Client /Owner/Employer:
I) Pre-tender stage planning:
1. Clients sets clear objectives of the project
2. Client communicate the objectives to all the parties and
stakeholders
3. Select the consultant
4. After proper investigations of the project, client
prepares quantity estimates and determines the
quantum of money required for the completion of the
work.
5. Take respective approval of the project from the
concerned authority
6. Bidding and contract award
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Planning by Client…
(II) Construction Stage Planning
1) Make site available for the contractor
2) Timely payment and settlement of claims
3) Keep the changes less
4) Timely decision
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(
Planning
III) Post construction stage planning
by Client…
1) Project ownership
2) Prepares project operation schedule
3) Prepares project maintenance schedule

Planning by Contractor:
(I) Pre tender stage planning
1. Careful Study of tender documents and
drawings
2. Study of specifications and workout the
detailed quantities of materials required for
different items
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Planning by Contractor…
3) Determine the availability of construction
materials at site or nearby site.
4) Determine the method of work execution i.e. by
labor or equipment
5) Thorough study of site and site investigations

(II) Construction stage planning

1) Studying the alternative methods of
construction and to decide about subcontracting

2)Working out detailed quantities of materials

required and examine and fixing the methods of
procurement and sources of them
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Planning by Contractor…
3) Working out detailed about construction
workforce like skilled and unskilled manpower
4) Working out details of plants, equipment their
layout and repair & maintenance strategy
5) Planning for camp facilities, access,
accommodations, site offices and layout
6) Planning for surveillance like proper lighting,
ventilation, drinking water, sanitation, first aid
treatment
7)Study interdependence of different items of
works and fixing the sequence of them
8) Finalize the work program of each item of work
and to decide the dates of their starting and
completing
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Planning by Contractor…
)
(III Post construction stage planning
1) Demobilization of plants and equipment
2) Demobilization of labors
3) Clearance of materials inventory and its
stock
4) Handover the project to client in targeted
date
5) Responsible for the defect liability
construction within its period
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3.3 Elements of Cost Estimation

Cost Estimate:
A cost estimate is the approximate of the cost
Types of Cost
(I) Direct Cost
 Money spent on materials, machine and manpower is
known as direct cost.
(II) Indirect Cost:
 Cost other than direct cost and that may be fixed or
variable. Eg: Administrative cost, O&M cost,etc
 Contingency : Unexpected Cost and generally (3-5)%
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Approaches to Cost Estimation

(I) Production Function
(II) Empirical Cost Inference
(III) Unit Cost for BOQ
(IV) Allocation of Joint Cost

Types of Construction Cost Estimates:

(1) Design Estimate
(2) Bid Estimate
(3) Control Estimate
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Methods of Estimation
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Project Budgeting
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Bidding
The process of offering a tender or bid to execute some
specified work or to supply some specified goods at a
certain rate/amount or to give service within a fixed time
frame under certain condition of agreement.
It is a process of procurement.
Tender or bid
It is an offer in written by the tenderer (the person who
offers the tender).
 It is the first step in the formulation of contract.
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In making procurement by bidding, an invitation to bid can

be made by the following process:-
• Inviting open bids by determining prequalification
• Inviting open bids without determining prequalification.
Bidding Stages:
(1) Single stage Single-Envelope Bidding Procedure
In the single-stage one-envelope bidding procedure,
bidders submit bids in one envelope containing both the
Financial Proposal and the Technical Proposal
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Bidding Stages…
(ii)Single stage Two-Envelope Bidding Procedure
• In the single-stage, two-envelope bidding procedure,
bidders submit two sealed envelopes simultaneously, one
containing the Technical Proposal and the other the Price
Proposal, enclosed together in an outer single envelope.
(iii) Two-Stage Two-Envelope Bidding Procedure.
• In the two stage two envelope bidding procedure, at the
first stage, Bidders submit two sealed envelopes
simultaneously one containing the Technical Proposal and
the other the Price Proposal, enclosed together.
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Why Tendering?
To select the best consultant
To select the best contractor
 To get quality work
 To get work at competitive price
 To maintain transparency
 Public private partnership ( encourage
contracting procedure)