Prelims & Inflation

Question 1

855 What are the contractors prelims?

Answer 1

Items which cannot be allocated to specific elements of the works. Items which are necessary to carry out the works but will not actually become part of the works once the project is complete:
* Management and staff
* Site establishment
* Temporary services
* Security
* Safety and environmental protection
* Insurance

Question 2

856 When assessing contractors prelims at tender stage what are the key considerations to determine if they are fair and reasonable?

Answer 2

• Length of the contract
• Type of project
• Size and overall build cost
• Need for temporary works
• Security requirements
• Method of sequencing the works
• Extent of the contractors design responsibility

Question 3

857 Can you give an example of contractors prelims that might be abnormal? (334)

Answer 3

• Tower cranes
• Evening/weekend working
• Road closures/traffic management
• Closing infrastructure like train lines

Question 4

858 What are the difference between fixed and time related prelims?

Answer 4

Fixed prelims are one off costs like the delivery of site cabins. Whereas the weekly hire of those cabins is a time related one.

Question 5

859 What is inflation?

Answer 5

NRM1 – Sustained increase in the general price level of resources.
It is included as an allowance in the order of cost estimate and cost plans for fluctuations in the basis prices of labour, plant, equipment and materials.

Question 6

860 What are the two types of inflation under NRM1?

Answer 6

Tender inflation – Allowance included in the order of cost estimate or cost plan for fluctuations in basic prices of L, P, E & M from the estimate base date to the date of tender return.
Construction inflation – An allowance included in the order of cost estimate or cost plan for fluctuations in the basic price of L, P, E & M for the date of tender return to the midpoint of construction.

Question 7

861 What does TPI stand for?

Answer 7

Tender Price Indices