Building Estimates and Tendering - Section A

What is the importance of accurately identifying and pricing cost significant preliminaries to maximise chances of winning a tender?

Preliminary documents known as site overhead are important tender documents, which allow the contractor to determine the costs not covered by the individual contract works and the costs not included in the composite tariffs (Institute of Civil Engineers 2019). The cost of the management of a project not included in the tariffs, including staffing, general plant and installations and sites-based facilities, is, in accordance with the Chartered Institute of Construction (2020). The mean percentage of preliminary items includes workers with 26.5%, 22.3% mechanical factory, 18%, site accommodation with a capacity of 11.8%, 6.3%, site cleaning with a capacity of 4.8% and 2.1%, phone / fax and signs and watching, lighting, insurance and other items making an average 6.4%, according to (Smith A.J. 1995). The preliminary steps are typically priced in proportion to a project and the contracted company calculates the operational costs for the project (Design Buildings 2018). Preliminary work is also particularly valuable if it is priced appropriately or if the project is over budget and the contracting company doesn't win the tender. The preparatory projects usually constitute 10 to 15% of the overall works, and if works can be delivered better, the contracting company would see a decrease in the duration of the project and in money invested (Dean Suttling 2020).

The first phase requires that the contractor notice general conditions, like: the requisite provisional job, involvement of subcontractors, the total amount of the contract and the trade description. The first stage requires the prizing process. The second step is to draw a drawing of the site layout, which would display access roads, storage areas, lodging facilities, and site services. The drawing would display a drawing. Step 3 demands that the contractor prepare staff, works and temporary work on the tendering programme, and that the duration of the building period must be specified in this step. This phase also includes the time needed to complete the project while the project is being developed, developed, and developed. The fourth step is to read the award documents and the remaining customer specific needs, forcing the contractors to consider the cost of the customer's needs in the preliminary measures. The fifth stage is provisional pricing.

In the preliminary work, the most important considerations are the proposed site location, site requirements, contract form and business conditions , availability and schedule and constraints or responsibilities placed by the employer (Hansen's Kammer 2020). The most important elements for this project are The cost of the head office and the cost of the head office depend on the cost of the contracting enterprises to operate are another factor that can affect the price. These costs include corporate administration, required motor vehicles, insurance and cost estimates. The majority of contracting firms assign 5 percent (Design buildings 2020) of the project expense to cover services rendered by the headquarters. The contractors have to weigh these considerations when pricing the cost of preliminary proceedings, otherwise the cost of the preliminary shall be misleading and which contribute to an acceptance of the offer and thereby to loss of profit for the contracting party. Some advantages include calculating the overall cost of the building for customers, controlling the project budget and expenses, establishing the necessary project materials and enabling the customer to find the project 's best contractor (Qtoestimating 2020).

Most clients select their contractor based on the price of their contract; therefore, it is important that the contractors make an accurate estimate of the preliminary proposals to allow them to make a profit margin for the completion of their contract. The estimates based on direct costs did not vary significantly among different bidders according to Taha et al. (1994) in most of the bids submitted. Much of the differences in the cost of various deals is based on indirect costs (preliminary) and the extra costs for these indirect costs. Solomon (1993) considered the modification of preliminaries to give a contractor a market advantage in relation to competitive tenders to be the simplest way. It was concluded that if a subtracter operates, a similar situation happens and the cheapest quotation is obtained, the job is submitted equivalent or similar quotations. (Taylor 1994). It can therefore be decided that the tender price should be precise and additional resources aimed at developing the methods to estimate indirect costs to increase the chances of winning a tender.

Building Estimates and Tendering - Section B

Project Cost

The Granny Apartment was supposed to have attached to the previous building, and thus it was estimated that a brick walls housing 50-75 square metres in Sydney cost between $1775 and 1910 per square metre, using Figure 1 (Rawlinson 2020). The cost of the planned granny flat, since it had a footprint of 59, 90 square metres, was $1910 per square metre. Furthermore, Figure 1 (Rawlinson 2020) cost the fit-out and service for the bathroom $25500 and the cost of kitchen furnishing and services from Figure 1 (Rawlinson 2020) $21000, which would entail an addition to the price of a granny flat. Consequently, $160,909 was estimated for the planned granny flat. For the entire 17 weeks, the organisation has now employed a site manager for an extra $44,132. A waste storage shed and an office on the property costs respectively $1777.35 and $1159.06. To limit noise and dust emissions, the security fence must be installed between the granny flat and the property, the fence costs $257.30. For 5 days and costs, $350 a concrete mixer is required and to construct the base of the grandmother is flat. When working on the roof of the granny flats, external skidding is important because it is higher than 2 metres and falls down from that height could hurt somebody and it costs $373.19. The full cost of skimming around the granny flat perimeter. A four m2 combined skip is to be rented for the entire 17 weeks for a total of $7680.94 for the removal of waste. This figure would be assumed as the value of a gross contracted amount for the estimation of insurance for the total expense of the project not including the insurance costs $216638, 84. The insurance totals $55892.13, which provide security for public duty and contract work. The overall cost of the project would therefore be $272,530.97 after all these expenses have been integrated.

Project Length

The project design & documentation time was determined to be 23 weeks and the construction times was determined to take 17 weeks according to figure 5 (Building Cost Index 2020) for a project costing under $200,000.

Management and Staff

The costs of having a site manager according to (Neuvoo 2020) is $2596 a week. The total length of the project is 17 weeks; the site manager would be required to supervise the construction of the project from the start to the finish. Therefore, the total costs for the site manager was calculated to be $44132.

Site Accommodation

A wastewater shed consisting of two toilets, one urinary basin and one pad for a total of $104.55 per week is required for the site accommodation according to figure three (Cordell 2020). Because of the number of construction contractors, two toilets are required for the duration of the project. The toilets can be linked to the previous sewers due to the distance from the current building. The expenses will be reduced. The ablution cottage price was estimated to be less than 2 separate toilets, which according to Figure 2 would cost $2472.82 (Cordell 2020). The selected ablution shed therefore costs $104.55 a week for 17 weeks, leaving the overall cost to accommodate the site at $1777.35.

Contract Conditions

The building company decided to acquire insurance contract works calculated by using figure 4 (Rawlinson 2020). The policy cost is 0.05 per cent to 0.14 per cent for the insurance of residential properties that are under the Total Contract Value (TCV). The rate has been assumed 0.10%. The TCV was estimated at $216,638.84 after consideration of all project costs. The contract job costs are measured with the TCV prices, therefore the contract insurance premium for the granny flat is $21663.85. The price is measured on TCV. An additional 38% of the fire services premium and stamp duty for New South Wales costing an additional $8232,28 should be charged in accordance with figure 6 (Rawlinson 2020).

In order to cover residential property with a TCV under $1000000, the public liability insurance needed is zero, 10- 0, 20, as per figures 7 (Rawlinson 2020). The assumed rate was 0.15% and 20 million losses are to be compensated. Calculated to amount to $216638.84, net of $0.12 for the public liability insurance, for a net of $25,996.67. The insurance premium for the grandfather's apartment is $55892.13.

Facilities and services

The removal of heavy waste and excavation wastes is an important service required for maintenance of the construction site. For the full seventeen weeks, the contractor can employ a 4m3 combination waste skip. According to figure 9, the price for 4-minute mix scraps costs USD 451, 82 per week (Cordell 2020). For the 17 weeks, the cost to hire the waste skip is $7680.94.

Temporary works

The temporary works for the site are temporary security fencing of the granny's flat from the current building. To stop dust from damaging the existing building, protective fencing between the proposed granny apartment and the existing house is necessary. Only between the current houses as a granny flat is, protective fencing required because the current fence covers the other properties. The cost of defence clamping up to 30 meters; up to six months' cost per metre is $16.88 per metre in Figure 10 (Cordell 2020). Figure 10. Determined to be 15.24 metres in width of the property determined from granny flat drawings. The overall costs were therefore estimated at 257.30 $for temporary fencings.

Employee’s requirements

Toilets and the site office are included in the costs of loading. Since there is no construction scale and there are not many people working on the project the site office chosen for this building is 3,6 m x 2,4 m. The price of a site office, as shown in Figure 11 (Cordell2020), is $68.18, 3.6 m by 2.4 m. The site office will take 17 weeks and therefore cost $1159.06 for a total. As part of site housing, the waste dump to replace the toilet was estimated to cost 1777.35.

Mechanical plant

For the foundation of the granny apartment, the mechanical system necessary for the building will be a concrete mixer. The daily cost of one concrete mixer is $70 as per figure 8 (Cordell 2020) and 5 days are required on-site. The overall cost would be $350 per mechanical factory.

Non-Mechanical plant

The non-mechanical installation needed for the granny apartment is external fabrics to improve safety when the entrepreneurs work on the granny float roofing. By measuring the lengths of the exterior walls of the granny floor, the amount of scalping required is determined. The overall length of the granny floor scaffolding ought to be 33, 5 square metres. The scaffolding can be hired two times, one way is for each m2 and the second is weekly. The rate of the hiring of the towers per m2 is 11, 14 deliveries, installations, dismantling and selection as per Figure 12 (Cordell 2020). The cost per week of recruiting scaffolding, as seen in Figure 12 (Cordell 2020), is $1,226.93, which is more costly than the cost of hiring the scaffold per m2, for a total of $373.19 per week.

References for Preliminaries in Construction

Designing buildings 2020, Preliminaries in construction, viewed 22nd September 2020, <>.

Designing buildings 2019, Project overheads, viewed 22nd September 2020, <>.

Dean Suttling 2020, Preliminaries in Construction, viewed 22st September 2020, <>.

Designing buildings 2020, Profit and overheads on construction projects, viewed 22nd September 2020, <>.

Khaled El Nahel 2014, What Are Preliminaries in Construction Contracts? How to Use Preliminary Costs in Claims, viewed 22nd September 2020, <>.

Practical 2017, Preliminaries (Prelims), viewed 22nd September 2020, <>.

Smith, AJ 1995, "Pricing Preliminaries" in Estimating, Tendering and Bidding for Construction: Theory and Practice, ed. A.J. Smith, Macmillan Education UK, London, pp. 98-115, <>.

Hansen's Kammer 2020, Pricing Preliminaries, viewed 22nd September 2020, <>.

Designing buildings 2020, Overheads, viewed 22nd September 2020, <>.

Qtoestimating 2020, Preliminary Estimate of Construction Projects, viewed 22nd September 2020, <>.

Taylor, GR 1994, "The importance of estimating your overhead: a Publication of the American Association of Cost Engineers", Cost Engineering, vol. 36, no. 2, pp. 15, ProQuest Central, SciTech Premium Collection database.

Tah, JHM, Thorpe, A and McCaffer,R 1994, “A Survey of Indirect Cost Estimating in Practice”, Construction Management and Economics, vol. 12, pp 31-36.

Solomon, G 1993, “Cost Analysis, Preliminaries, The Marketplace Effect”, Chartered Quantity Surveyors, pp 9-11

Neuvoo 2020, Site Manager salary in Australia, viewed 22nd September 2020, <>.

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