FOR YOUR REFLECTION

1. Why are most general contractors and subtrades enter into lump-sum estimated
contracts on the terms that they will perform a defines scope of work, and not
detailed estimates, when they submitted their bids?
The general contractors and subtrades create a specific estimated amount to a bidding
because a simple contract means an easy to understand and a straightforward bid. In this subject
matter, the client/s can see the competence and skills of the contractor/s in terms of estimation of
the total project price. The client/s can also look at the most favorable amount among the
submitted bids that will serve as a guide on what contract they should sign with a relation to the
project’s budget.

2. There are number of different types of contracts, other than lump-sum, that call for
different types of estimates. Differentiate and discuss briefly Cost-Plus Contracts
from Unit-Price Contracts.
Cost-Plus Contracts is the opposite term of a fixed price agreement since the owner will
pay the contractor the actual costs paid for the labor and materials. The owner will also pay a
charge to the contractor for managing the project, which may take the form of a set fee, a
percentage of the overall cost, an hourly rate, or a combination of these options. There is no
certain cost for this term since it can always add up any amount. However, a certain level of
transparency is required since this is a liability from the contractors to the owner. On the contrary,
Unit-Price Contracts are the most accurate and transparent when quantifying the work performed.
It conveys high performance, competitive and compliant pricing in the bidding stage since
additions and deletions are easy and fair. Additionally, each unit price embodies all costs,
overhead, and profit for completing the specific work item. The commonly factored costs into
unit prices are labor, material, overhead, profit, taxes, permit and inspection costs.
SUMMATIVE ASSESSMENT
1. Why is it important for the estimator to carefully examine the site of the work
before the estimate is prepared?
The estimators do not just magically estimate the owner’s site; they need to
thoroughly research the materials, equipment, excavation and such to accurately assess for their
clients. This will be beneficial for the estimators because, with their careful examination, their
clients will be able to consider the budget for the upcoming project. The estimator also needs to
fact-check every detail from the site since the working drawings or specification might be
inaccurate in terms of measuring the backfill or excavation.

2. What is the purpose of a soils report, and how can the information it contains assist
the estimator?
Every type of soil with various moisture content or impact of the structure that will
be built has its difference in cost and materials. The estimator can have the ability to take this
information into account to further research about the type of soil and the cost in materials and
such that will be used for the construction.

3. Explain the meaning of the following terms as they relate to the estimating process:

 Bank Measure – the measurement of a volume of soil or rock from its original
position as given by portion.
 Swell Factor – a soil increases in volume when it is excavated. The percentage
volume increase caused by digging up soil is known as swell. The soil is physically
divided into clods (large lumps of dirt) and smaller particles during excavation. This
increases the volume of the soil's voids and the number of air pockets in the soil.
 Compaction Factor – a procedure that results in an increase in soil weight or
density and a decrease in air volume. It can improve the strength and stiffness of soil.
REFERENCES
 4 Types of Construction Compensation: Lump Sums, Unit Prices, Time & Materials, and
Actual Costs [Gaille Energy Blog Issue 93] (linkedin.com)
 Unit Price Contracts: How do they Compare and What makes them Special? -
(contractcomplete.com)
 Fixed Price vs. Cost-Plus Construction Contracts – Pihl Law
 What Is a Unit Price Contract? When Should It Be Used? | Construction Contracts
(levelset.com)
 What Is a Unit Price Contract & When to Use It? | NetSuite