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CON 4003 CVE 4073/5073

CON 4003 CVE 4073/5073. The Estimating Process Prof. Ralph V. Locurcio, PE. Contract Documents or Bid Set. Contract Documents…. The Agreement or Contract The Specifications The Drawings Important Note: Unless otherwise specified this list is the

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CON 4003 CVE 4073/5073

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  1. CON 4003 CVE 4073/5073 The Estimating Process Prof. Ralph V. Locurcio, PE

  2. Contract Documentsor Bid Set

  3. Contract Documents… The Agreement or Contract The Specifications The Drawings Important Note: Unless otherwise specified this list is the “order of precedence” of the contract documents

  4. Where Estimates are Used…

  5. Estimating

  6. The Estimating Process-1 • Decision to bid • Form the estimating team • Estimate work plan • Type of estimate • Procedures • Documentation • Risk & contingency analysis • Review & check the estimate • Finalize the estimate

  7. The Estimating Process

  8. Estimate work plan Type of estimate required Deliverables by subcontractors Budget for the estimate Staffing Schedule Methodology Controls & reviews Presentation format & production

  9. Types of Estimates • Conceptual estimate • Decision on units • Adjustments for time & location • Detailed estimate • Material take-off • Equipment & cycle time • Labor & productivity • Admin + overhead+ logistics+taxes+profit

  10. Basic estimating procedure Read the plans, specs & contract Conduct a site investigation Decide on construction method Consider the construction schedule Material quantity takeoffs Plan for equipment Plan for subcontracts Estimate costs of labor & materials Assess risks Determine contingency Finalize bid

  11. Basic estimating procedure

  12. Conduct thorough site visit Physical characteristics Sub-surface conditions Site logistics for construction layout Condition of roads & bridges Storage space for lay-down Security requirements Operational requirements

  13. Read the plans, specs & contract Contract terms & conditions Payment & penalties Scope and quantities Complexity of construction Completeness of plans Quality of materials required

  14. Decide construction method Basic approach & teaming Work breakdown structure & sequence Skills of work crews Decision on work to be subcontracted Timing of individual activities Phasing of crews on site Procurement of equipment Flow of materials & laydown Cash flow projection

  15. Work schedule Based on contract provisions Sequence of work Operational constraints Site constraints Weather & safety factors Lead time for materials Availability of subcontractors

  16. Material quantity takeoff Study plans & specs Systematic breakdown of units Bid instructions, format & alternates Follow sequence of construction CSI category of materials & labor Check for duplicates & omissions Document all work Review & check for errors

  17. Direct costs Materials, labor, equipment Subcontractor bids Contact suppliers Market factors apply Establish and update cost data base

  18. Indirect costs Mobilization Field office Insurance Bonds Taxes & permits Cleanup Demobilization

  19. Risk analysis Complexity of plans & specs Terms of contract & penalties Experience with owner Timing of project Market factors for labor & materials Weather & safety Other uncertainties effecting execution Probability of occurrence of each

  20. Determine contingency Percentage of base estimate Determine high-cost risk factors Expected net risk based on probability Aggregate total project risk Establish contingency

  21. The Estimating Process

  22. CSI Master Format-1

  23. CSI Master Format-2

  24. CSI Master Format-1

  25. CSI Master Format-2

  26. Typical Excel Format

  27. RSMeans

  28. Bid summary • One line item cost for each CSI category • 01 – General conditions = $3000 • 02 – Concrete = $1000 • 05 – Metals= $ 500 • 06 – Wood, Plastics= $1500 • Total …………………………. $6000 • Contingency…………………... $ 600 • Taxes…………………………. $ 396 • Profit…………………………. $ 700 • Your bid……………………… $7696

  29. Bidding

  30. Issuance of Bid Documents… • Prepare adequate bid sets • Make “reproducible” set of Mylar drawings • Plan bidding process carefully • May issue pre-bid notice • May include pre-bid conference to clarify owner’s intent • Issue amendments to correct errors • Avoid “irregularities” • Documents are “close hold” to ensure competition • Issue bid documents • All sets must be identical • Keep accurate log of documents issued • Addenda must be mailed to all bidding firms • Answers to questions to all bidders • Avoid bid protest • Process stopped pending review • May be cause for rebid • Financial problems result

  31. Bonds… • Bid bonds • Avoids loss if bidder cannot/does not accept contract • 5%-10% of bid price • Returned when agreement signed • Common on public contracts • Bonds purchased from “surety” company • Performance & payment bonds • Intent is to protect owner from contractor failure • Insurance (surety) company guarantees completion • Payment bond pays labor & material debts of contractor • Prime often requires bonds of subcontractors • Ability to obtain bonds depends on prior performance

  32. Insurance… • General liability insurance • Operations • Personal injury • Liability during construction • Automobile medical & physical payments • Post-project liability • Builder’s Risk Insurance • Covers perils during construction • Fire, lightning, vandalism, windstorm • Additional perils: collapse, terrorism, rupture, etc…

  33. Bid Opening & Evaluation… • Technical evaluation & review • Will bid achieve owner’s intent • Is bidder’s plan competent & safe • Are subcontractors qualified • Price evaluation • Rank order by low to high bid • Are all bids “responsive”; i.e.. meet all requirements • Bids may not be “qualified” in any way • Review of “schedule of values” or estimated payment schedule • Determine “apparent” low bidder • Bid qualification • Is bidder disqualified for any reason • Are bonds, insurance & certifications adequate • Recording of bids & recommend award

  34. Questions?

  35. That’s all for today… Slides are on my web site My web site: www.my.fit.edu/~locurcio

  36. Schedule of Values

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