Detailed Cost Estimate

Question 1

What are the steps for producing a detailed cost estimate?

Answer 1

1. The direct costs are evaluated using a bill of quantities and unit rates.
2. The total indirect costs are calculated as a percentage of the direct costs.
3. The construction cost is found by multiplying the total costs (indirect + direct) by the inflation factor and location adjustment factor.
4. The contingency cost is found as a percentage of the construction cost.
5. The markup is found as a percentage of the construction cost.
6. The total cost is found by summing the construction cost, contingency cost and markup.

Question 2

What are the differences you would see between the outcome of a preliminary and detailed cost estimate and why?

Answer 2

A detaied cost estimate would be much lower than a preliminary cost estimate because the former only accounts for civil engineering costs whereas the latter accounts for all disciplines.

Question 3

What is a bill of quantities?

Answer 3

A document that tracks the type of task, units, quanity of work, cost rates and total cost of activities.

Question 4

What is a classification of work?

Answer 4

A 4 digit code that classfies the type of work that an activity is. The first digit is a letter for the major catagory and each subsequent number describes it in more detail.

Question 5

What are the 3 components of a total cost rate in the SPONS book?

Answer 5

Labour rate - cost of labour per unit work.
Plant rate - cost of machinery per unit work.
Material rate - cost of material per unit work.