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MHIC > Bidding and Estimating > Flashcards

Bidding and Estimating Flashcards

1
Q

Quantity Take-off Method

A

Counting the number of items associated with a particular construction project, determining the associated materials and labor costs, and formulating a bid.

Consider:
Subcontractors if needed
Project overhead
Company overhead
Labor burden
Project equipment
Contingencies
Allowances
Add markup for profit being careful to keep your bid competitive

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2
Q

What is Bid Shopping? (unethical practice)

A

Bid shopping is the practice of revealing a contractor’s or subcontractor’s bid to other prospective contractor(s) or subcontractor(s) before the award of a contract in order to “shop” around, inviting other competitors to beat it.

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3
Q

What is Bid Peddling? (unethical practice)

A

Bid peddling is bid shopping in reverse. Bid peddling occurs when a subcontractor who is not selected for a construction project tries to induce the prime contractor to substitute his or her company by offering to reduce their price

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4
Q

What is Bid Rigging? (unethical practice)

A

Coordination among bidders that undermines the bidding process and can be illegal. Bid rigging can take many forms, but one frequent form is when competitors agree in advance which firm will win the bid

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5
Q

Process of Estimating

A

Flowchart

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6
Q

What is included in the labor burden?

A

The extra administrative costs of employing laborers. The cost of employment taxes and insurance (Medicare, Social Security, unemployment insurance, workers’ compensation, liability insurance, etc.) must be considered. These obligations add approximately 30% to your labor costs

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7
Q

What are Allowances?

A

These are funds allocated to specific items in the budget. For example, the lighting allowance will establish that all light fixtures be purchased for a certain amount. If the owner changes his/her mind, and chooses more expensive fixtures, they must be purchased by the owner above and beyond the contract price.

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8
Q

What is a Project Overhead?

A

These are costs that are associated with the project but are not labor and materials. Examples of project overhead are utilities, temporary storage and office costs, security, dumpsters, and sanitation.

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9
Q

How to add Markup & determine profit

A

Markup in the construction industry is 15%. The cost of the project, plus overhead and markup is the most common way to arrive at a bid. Markup should be applied to direct costs (labor, materials, equipment, project overhead and subs).

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10
Q

What is a Conceptual estimates

A

Using information from previous projects to arrive at a rough cost for budget purposes without designing the entire project.

After this process is complete the owner will enter into the design stage.

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11
Q

What is a Square-Foot estimates?

A

Square-foot total - measuring the square-foot of the entire building and multiplying a square-foot unit cost number based on past project history.

Square-foot area - measuring the square-foot of the specific trade work and multiplying a unit cost number for their perspective work.

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12
Q

What is a Unit Price Estimate?

A

This is a form of construction estimating that bundles all the cost components like labor, materials, equipment and subcontractors to arrive at a unit price for the entire job.

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13
Q

What are Common Sources of Error in estimating?

A
  1. Errors in Calculations & Measurements.
  2. Incorrect Labor Rates.
  3. Improperly Priced Materials and Supplies.
  4. Using Incorrect Units of Measure.
  5. Failure to Visit the Project Site.
  6. Overlooking or Miscalculating Haulage Costs.
  7. Failure to Review Building Codes, Permits and Inspections.
  8. Failure to Consider Quality of Workmanship Required.
  9. Omitting Items Considered to be Minor.
  10. Failure to Review the Bids of Subcontractors.
  11. Taking Shortcuts in Cost Estimating.
  12. Not Allowing for Realistic Contingencies.
  13. Overlooking Items.
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14
Q

What is the importance of Job Cost Recording?

A

Information can be learned from keeping track of actual costs in comparison to estimated costs, and be later used in future estimating and bidding process. It is recommended to use Construction Specifications Institute (CSI) forms, specifically 2004/2010 CSI Masterformat Cost Codes.

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15
Q

__________ are used to monitor and evaluate a contractor’s costs during the course of a construction project.

A

Cost codes

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16
Q

Is profit considered a cost? And should it be factored into your cost codes?

A

No

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17
Q

What are the benefits of using estimating software?

A
  1. Professional looking reports
  2. Alleviate many errors
  3. Reference databases
18
Q

What is profit?

A

Profit is the amount of money left over after a project is 100 percent complete, and referred to as net, or clear profit.

19
Q

Items not specified in the project plans, such as plumbing fixtures, electrical fixtures, flooring…. can be handled by negotiating a budget for these items not yet decided upon. These additional monies set aside for the owner to go shopping with are called?

A

allowances

20
Q

The cost of having employees includes their hourly wage, and other expenses not included in their wage such as, matching Social Security and Medicare contributions and unemployment and workers compensation expenses. These additional costs, over and above wages is called _________________.

A

labor burden

21
Q

Requiring bidders to include qualifications in a bid helps to ensure _________ .

A

competence, capacity, and experience

22
Q

An excavation project requires the removal and hauling of an undetermined amount of fill material. Since the amount of work is not defined, the contractor quotes a certain amount per cubic yard on the bid form. This amount incudes equipment rental and maintenance costs, labor costs, fixed overhead costs and profit. This is an example of what type of estimate?

A

unit price estimate

23
Q

When using subcontractors, be sure to clearly describe the level of quality expected in their job specifications, this will help them _____ the job accordingly.

A

bid

24
Q

Temporary storage facilities, dumpsters and utilities are considered _________ overhead

A

project

25
Q

Indirect labor costs like taxes and insurance are sometimes referred to as ______________________________.

A

Labor Burden

26
Q

What does a contractor need to consider in addition to costs of equipment needed to build the project?

A

The operating/maintenance expenses, repair of, storage, delivery, finance cost, insurance, and taxes of equipment.

27
Q

When adding profit to an estimate, the value is usually ___________________________.

A

A percentage of the total job cost

28
Q

What are the first steps in completing an estimate?

A
  1. Review project documents
  2. Conduct environmental assessments
  3. Inspect the job site
29
Q

What is the Unit price estimates consist of?

A

Assigning costs to each separate unit of construction

30
Q

A complete list of all of the materials and items of work that would be required to complete a project are __________________ .

A

quantity surveys (take off)

31
Q

What would be the best source to use when estimating job site overhead?

A

Historical job site overhead costs records

32
Q

Recognizing that delays are inevitable, the schedule should plan for this by considering ____________________.

A

Contingency time

33
Q

Adding an amount of money to cover unexpected costs are ______________________.

A

Contingency costs

34
Q

______________________are reasonable estimates of funds set aside for a particular item in a project (such as lighting fixtures). The contractor is not held to that price.

A

allowances

35
Q

The basic hourly wage incurred while an employee is being productive in the building process is known as ______________________________________.

A

Direct labor cost

36
Q

An advantage to renting equipment can be __________ .

A

short term need, distant job location, no maintenance costs

37
Q

This is a form of construction estimating in which a fixed price is given for the entire project.

A

lump sum method

38
Q

The importance of pre-qualified bids is to ensure ___________ .

A

experience, capacity , competence

39
Q

Quality of construction, materials and work methods should be addressed in the specifications. Companies that are bidding can take these expectations into consideration when they are doing their estimates.

A

True

40
Q

What are some examples of annual company overhead?

A

office rent, taxes, accounting fees

41
Q

Lack of ________ definition could lead to a skewed bid and could result in the contractor actually losing money on a project.

A

design and work scope

MHIC (11 decks)

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