Lesson 4 Flashcards
is the process of forecasting the cost of building a physical structure.
It is not an exact science.
Construction Cost Estimate
Types of Construction Estimates
Detailed Estimate
Approximate Estimate
Includes determination of the qualities & costs of everything
required to compute the project which includes material, labor, equipment, insurance, subcontract work, overhead profit etc
detailed estimate
a. Preliminary Estimate ( Volume and Area Method )
b. Conceptual Estimate
Approximate estimate
Key Components of Estimates
Direct cost and Indirect Cost
broadly classified as those directly associated with a single area (such as a department or a project).
direct cost
cannot be associated with a specific cost center and are instead incurred by a number of projects simultaneously,
Indirect Cost
Common Types of Expenses
Labor
Material
Equipment
Services
Software
Hardware
Facilities
Contingency Cost
The cost of human effort expended towards project objectives.
Labor
The cost of resources needed to create products
Materials
The cost of buying and maintaining equipment used in project work.
Equipments
The cost of external work that a company seeks for any given project
Services
Non-physical computer resources.
Software
Physical computer resources.
Hardware
The cost of renting or using specialized equipment, services, or locations.
Facilities
Costs are added to the project budget to address specific risks.
Contingency cost
is a schedule which categories, details and quantifies the materials and other cost items to be used in construction projects.
It is important to know that, direct costs & indirect costs are to be considered for complete cost of the project which are covered in different parts of the BOQ.
Bill of Quantities
Types of Bill of Quantities
Firm
Approximate
Advantages of Bill of quantities
Provide work details
Assist in Evaluation and Comparison
Assist in Project Planning
Transparency
Avoid Guesswork
Provide better Project Management.
an offer to do a job for a particular price.
BID
Types of Bid
Competitive bidding
Negotiated bidding
Involves contractor submitting a lump sum bid in competition with other contractors to build the project. The lowest bidder is usually awarded with the project provided proper procedures have been followed.
competitive bidding
Involves combination of arrangement between owners, architects or engineers and contractors.
negotiated bidding
the systematic application of function-oriented techniques by a multi-disciplined team to analyse and improve the value of a product, process or service.
Value Engineering
Decrease the use of resources
Improve Project Schedule
Improve Constructability
Resolve Stakeholder Issues
Reduce Operating Costs
Reduce Overall Project Costs
Reduce Risks
use of value engineering
Selection
Information
Analysis
Teamwork
Attitudes
Elements of value engineering
