PreLim Flashcards
Means and include the cost of the entire construction of the project including all supervisions, materials, supplies, labor, tools, equipment, transportation and/or other facilities, furnished, used or consumed, without deduction on account of penalties, liquidated damages or other amounts withheld from payment to the contractor or contractors.
Construction Cost
Regarded as a valuation based on opinion or roughly made from imperfect or incomplete data. Not professedly exact in regard to the cost of certain work
Estimate
Indirect cost required to build the project
Overhead
Costs for any potential unforeseen work
Contingencies
Cost for compensation for performing the work
Profit
Distinct task in estimating
- To determine the probable real cost
- To determine the probable real time to build a project
Types of Estimates
- Approximate Estimates
- Detailed Estimates
Cost of various work item, such that cost per cubic meter of foundations, cost per kilogram of structural steel and cost per square meter of a finished room
Approximate Estimates
A comprehensive and well-defined organization of work items is essential to the preparation of an estimate for any project.
Organization of Estimates
Cost of project is prepared by determining the cost of materials, labor, equipment, subcontract work, overhead, and profit. Are generally prepared by contractors from a complete set of contract documents prior to submission of the bid or formal proposal to the owner
Detailed Estimates
Two basic approaches in Organizing Work for Estimating
- Construction Specification Institute (CSI)
- Work Breakdown Structure (WBS)
This approach is to identify work by the categories contained in the project’s written specifications
Construction Specification Institute
(CSI)
Approach is to identify work items by their location on the project
Work Breakdown Structure (WBS)
First step in preparing the cost estimates. Involves all materials in the project plus earth excavation and fill
Quantity Takeoff
Normally prepared for the purpose of submitting a bid for projects with a complete set of plans and specifications that have been prepared to construction
Lump-Sum Estimates
Cost per unit includes the furnishing of materials, labor, equipment, supervision, insurance, taxes, profit, and bonds for completely installing a unit
Unit-price basis
Usually done when the owner wants to start construction at the earliest possible date in order to benefit by an early completion and use of project.
Negotiated work
Documents that contain all the drawings and written specifications required for preparation of complete estimate and are used throughout the construction process.
Contract Documents
Unique to each project for their use in evaluating and comparing contractor’s bid
Owner’s bid form
Chargeable to a project involve many items other than materials, labor, and equipment
Indirect (Overhead) cost
Includes cost which can be charged specifically for a project.
Job Overhead
Share of the cost incurred at the general office of the company
General Overhead
It ranges from 3 to 6 percent of the total direct cost
Material Taxes
Include 7.50 percent of the government and 3 percent unemployment tax.
Labor Taxes
Umbrella term for various policies offering protection to everyone with a financial interest in a building project, from contractors to property owners. Comparable to health insurance, has a purpose with set conditions.
Construction insurance
Also known as “course of construction insurance, it covers buildings under construction. Coverage kicks in when any of these circumstance happen, such as hail, theft, vandalism, hurricanes, lightning, etc.
Builder’s risk insurance
Its an all-encompassing liability policy for contractors and subcontractors
Wrap insurance
Known as “ contractor general liability or commercial general liability insurance”. Protects you and your business if someone files a claim due to body injuries or property damage
General liability Insurance
Protects business from lawsuits and financial disadvantages
Commercial auto insurance
Shelters business from alleged claims regarding a mistake in providing the service.
Errors and Omissions Insurance
Manages risks if employees get injured or ill at work.
Workers compensation insurance
Lets you sidestep the negative consequences if sa subcontractor fails to do their part .
Subcontractor Default insurance
Is a form of protection for the owner against non-payment, lack of performance, company default, and warranty issues. Known as contract bonds
Construction bond
Three main parties to a bond
- Principal
- Surety company
- Obligee
Person or company purchasing the bond. Usually the general contractor or a subcontractor
Principal
Party responsible for arranging the completion of the contract if the contractor fails to perform
Surety company
Party protected by the bonds. Usually property owner, public agency, or other party requiring the bond
Obligee
Types of construction bonds
- Performance bond
- Payment bond
- Bid bond
Guarantees that a contractor will perform the work according to the conditions and requirement. Protects the owner from financial loss as a result of a contractor default.
Performance bond
Protects the owner from liens against the property by guaranteeing that the policyholder will pay all subcontractors and suppliers for work and materials. Required most on public projects, but frequently used on commercial jobs
Payment bond
Reassurance to a project owner that a contractor will follow through with their commitment. Assures the project owner that the principal has the capability to complete the job as bid
Bid Bonds
