Presentation on theme: "Estimating for Heavy Construction and Unit Price Bids"— Presentation transcript:
1Estimating for Heavy Construction and Unit Price Bids Hal JohnstonFaculty of Civil EngineeringDepartment of Economics and ManagementCZECH TECHNICAL UNIVERSITY IN PRAGUE
2Short Bio Hal Johnston Professor (20 years) Construction Management DepartmentCalifornia State Polytechnic University (Cal Poly)San Luis Obispo, California, USAProfessional Construction Experience (17 years)Bechtel – EPC/CMMorrison Knudson – Design Build/General/CMThe Austin Company – Design BuildR.E. Bayley Construction – General ContractorMason/Johnston General Contractors – GeneralEducationB.S. in Building Theory and Practice – Washington State UniversityMasters in Building Construction – University of FloridaOther2 books, many scholarly papers, given many professional seminarsLatest seminar for the ASCE – Atlanta (2 days)– Fundamentals of Construction EstimatingAnd ASCE – Panama (Panama Canal Authority – 10 days) Const. EstimatingShort Bio
3Learning Outcomes for (Estimating for Heavy Construction and Unit Price Bids) The attendee will be able to:Discuss how heavy construction estimating is different from commercial estimatingDescribe a unit price bidDecide when and where the different types of estimates are usedIllustrate the different parts of the unit price estimate and describe themExplain how the different types of cost play a role in heavy construction estimating
4Session Outline Construction organizations (review) Construction contracts (review)Contract documentsStandard specificationsStandard specifications for DOTsUnit pricesUnit bid itemsWSDOT Unit bid itemsShort in-class exerciseQuality control / acceptancePrice adjustments
5History of Project Delivery in US Legal Separation of Design and ConstructionThe Miller Act (1935)Public contracting laws mandating separation of design from construction & contractor selection solely on costProfessional licensing requirements
6Project Delivery Defined A comprehensive process including planning, design, construction and other services, necessary for organizing, executing and completing a construction project.Three fundamental owner decisionsType of project delivery systemType of procurement methodType of contract format
7Project Delivery Process Framework PerformanceCriteriaProjectFeasibilityCriticalOwnerDecisionsFacilityOwner’sProfileContractFormatSelectionProjectDeliverySystemSelectionProcurementMethodSelectionProgramming& Scope DefinitionTeamSelectionConfirm ProjectScope and ProgramProjectFinancingDesign & ConstructionNOTE: Chart shows logic flow, not timing or sequence of steps, which vary depending on methods used.Operation & Maintenance
8Project DeliveryAlways 3 or 4 major parties involved in the project delivery processOwner (public or private)Designer (Engineer or Architect)ContractorConstruction Management Firm (can also be one of these parties)
9The Method Selected will: Determines the contractual relationships among the parties.Establishes when the parties become engaged.Influences impact of changes and modifications on project cost.
10Project Delivery Types Design-bid-build (Lump Sum or Unit Price)Multi-prime (often under CM)Construction management-at-riskConstruction Management agencyDesign-build (DB, EPC, etc.)
11Procurement DefinedProcurement is the methodology used to buy design and construction services.
12Construction Contracts Method of pricingFixed-priceLump sum contractUnit price contractCost-plusCost plus percentage of costCost plus fixed feeCost plus fixed fee with a targeted maximum costCost plus incentive feeGuaranteed Max PriceGMP plus percentage of costGMP plus fixed feeGMP plus a fixed fee plus share of savings - incentiveMethod of awardCompetitively Bid contractsWith designer doing Project SupervisionWith CM – agencyCM at RiskDesign BuildNegotiated contractsGMPNegotiated Lump sum
13Procurement Options Sole Source/Direct Selection Negotiated procurementCompetitiveQBS – Qualification Based SelectionBVS - Best Value SelectionLow BidDBIA has MOP #203 The Design-Build Process Utilizing Best Value or Qualification Based Selection. DBIA has MOP #201 The Design-Build Process Utilizing Competitive Selection. DBIA has MOP #204 The Design-Build Process Utilizing Negotiated Selection.
14Market Penetration of Major Project Delivery Systems
15Design-Bid-Build Contractual Relationship OwnerSub ConsultantsDesignerContractorCharacteristicsThree linear phases: Design, bid and buildThree prime players: Owner, designer, constructorTwo separate contracts:Owner to designerOwner to constructorResponsibilitiesOwnerDesignerConstructorProgram, finance, managementPrepares plans & specs, normal servicesPrime and sub constructionSubcontractors
16Design-Bid-Build Advantages Established way of doing thingsSuitable for competitive biddingA/E directly works for ownerExtensive litigation has resulted in well established legal precedentsNo legal barriers in procurement and licensingInsurance and bonding are well defined
17Design-Bid-Build Disadvantages Two contracts for owner to manageDisagreements go through ownerOwner bears design adequacy riskAll parties have different agendas/objectivesInitial low bid might not result in final best valueBids over budget presents most difficulties in reducing costs / creates significant delayNo constructor involvement in designSlowest project deliveryMost litigious delivery process
18Design-Bid-Build Unique attributes and challenges Utilization helps to avoid potential conflicts of interestProvides a check and balance between design and construction functionsOwners less familiar with the design and construction process may benefit from Design- Bid-Build because it is so well understood throughout the building industry.
19Primary Reasons for Choosing Design-Bid-Build Low first cost is the priorityProject is simpleProcurement laws restrict use of anything elseOwner wants to control designNo need for value engineering or innovation
20Project delivery selection influences when contractor gets on board. Influence vs. CostProject delivery selection influences when contractor gets on board.Contractor on-board early allows best opportunity to achieve objectivesRAPIDLYDECREASINGINFLUENCEMAJORINFLUENCELOWINFLUENCELargeHighCOSTINFLUENCELowSmallPlanning & Design Construction & Operations
21Risk in Heavy Construction Equipment productivityLabor productivityHow material may react differently in different circumstancesLocationsLower number of subcontractors on job, higher risk to the GeneralFuel costsSoil Conditions (acting different than expected)Risk in Heavy Construction
22How does Risk change the Estimate? Higher profitsCommercial Profits – 1% to 5%Heavy Profits – 8% to 15%Less return on investmentsLarge cost of equipmentContingencies for potential escalation costs
23Standard Specifications for DOT (Department of Transporation) Typically do not use MasterFormat 2004Generally use 9 DivisionsGeneral RequirementsEarthworkProduction from Quarry and Pit Sites and StockpilingBasesSurface Treatments and PavementsStructuresDrainage Structures, Storm Sewers, Water Mains, and ConduitsMiscellaneous ConstructionMaterials
24Standard Specifications for most Commercial / Building Projects Typically used today is the MasterFormat edition, but a new edition has been published (2004)MASTERFORMAT 1995 EDITIONBefore November 2004, MasterFormat was composed of 16 primary divisions:Division 1 — General RequirementsDivision 2 — Site ConstructionDivision 3 — ConcreteDivision 4 — MasonryDivision 5 — MetalsDivision 6 — Wood and PlasticsDivision 7 — Thermal and Moisture ProtectionDivision 8 — Doors and WindowsDivision 9 — FinishesDivision 10 — SpecialtiesDivision 11 — EquipmentDivision 12 — FurnishingsDivision 13 — Special ConstructionDivision 14 — Conveying SystemsDivision 15 — MechanicalDivision 16 — Electrical
25Standard Specifications for most Commercial / Building Projects MASTERFORMAT 2004 EDITIONAfter November 2004, MasterFormat was composed of 49 primary divisions:The current MasterFormat Divisions are:Division
26Divisions MasterFormat 1995 MasterFormat 2004 Procurement and Contracting Requirements GroupIntroductory Information 00 Procurement andBidding Requirements Contracting RequirementsContracting RequirementsSpecifications GroupGeneral Requirements Subgroup1 General Requirements 01 General RequirementsHere we see a side-by-side comparison between MasterFormat 1995 and MasterFormat To help you follow along, numbers and titles that have been modified are shown in blue, and new ones shown in red.Note that the term “Bidding” is changed to “Procurement” to acknowledge that there are numerous methods to obtain pricing.Division one has been expanded to include performance requirements and life cycle activities.
27Divisions MasterFormat 1995 MasterFormat 2004 Facility Construction Subgroup2 Site Construction02 Existing Conditions3 Concrete03 Concrete4 Masonry04 Masonry5 Metals05 Metals6 Wood and Plastics06 Wood, Plastics, and Composites7 Thermal and Moisture Protection07 Thermal and Moisture Protection8 Doors and Windows08 OpeningsIn the Facility Construction Subgroup, most of the Division names remain the same as or very similar to the previous edition.Division 2 changes are a result of moving much of its former content to the new Site and Infrastructure Subgroup. The work that remains in Division 2 includes topics such as assessment and maintenance of existing conditions, subsurface investigations, demolition, and remediation of hazardous conditions.Division 06 has been expanded to include new types of composite materials such as structural components made with carbon fibers.Division 08 has been renamed because louvers and vents have been added to the category.
28Divisions MasterFormat 1995 MasterFormat 2004 Facility Construction Subgroup (continued)9 Finishes09 Finishes10 Specialties11 Equipment12 Furnishings13 Special Construction14 Conveying Systems14 Conveying Equipment15 – 19 ReservedDivision 14 has been renamed because industrial types of material handling systems have been move to the new Process Equipment Subgroup. And,Divisions 15 and 16 have been reserved for future use since the mechanical and electrical work has been relocated to the Facilities Services Subgroup.Note that Division 17 is reserved for future work. During the past few years, many people made up titles for Division 17 as an ad hoc way of solving the overcrowding in MasterFormat. Now, there are officially designated divisions for all the work results that used to get stuck in Division 17.
29Divisions MasterFormat 1995 MasterFormat 2004 Facility Services Subgroup20 Reserved13 Special Construction21 Fire Suppression15 Mechanical22 Plumbing23 Heating, Ventilating, and Air Conditioning24 ReservedThe facility services can amount to 30 percent or more of the total value of a building project. Yet the previous edition of MasterFormat had only two divisions for mechanical and electrical work. MasterFormat 2004, on the other hand, now has seven divisions offering flexibility in organization and room for expansion.If the following metaphors don’t work for you, don’t use them.There is now a breath of fresh air in the mechanical divisions,
30Divisions MasterFormat 1995 MasterFormat 2004 Facility Services Subgroup (continued)13 Special Construction25 Integrated Automation16 Electrical26 Electrical27 Communications28 Electronic Safety and Security29 ReservedAnd new light being shed on the electrical work.If your audience is oriented toward mechanical and electrical work, take time to discuss organization of this subgroup.
31Divisions MasterFormat 1995 MasterFormat 2004 Site and Infrastructure Subgroup30 Reserved2 Site Construction31 Earthwork32 Exterior Improvements33 Utilities34 Transportation35 Waterway and MarineReservedWide open spaces for the site work.If your audience is civil engineering oriented, take time to discuss organization of this subgroup. LLets take a few minutes and look at what is being covered under these new Divisions 31-thru 35
32Division 31 - EARTHWORK MasterFormat 2004 31 00 00 EARTHWORK SITE CLEARINGEARTH MOVINGEARTHWORK METHODSSHORING AND UNDERPINNINGEXCAVATION SUPPORT AND PROTECTIONSPECIAL FOUNDATIONS AND LOAD-BEARING ELEMENTSTUNNELING AND MININGReservedReservedLets take a quick look at what is covered under Division 31, Earthwork. If you notice, What used to be covered under 1 section title, like Site Clearing is nowDivision 31 - EARTHWORK
33Divisions MasterFormat 1995 MasterFormat 2004 Process Equipment Subgroup11 Equipment40 Process Integration41 Material Processing and Handling Equipment42 Process Heating, Cooling and Drying Equipment43 Process Gas and Liquid Handling, Purification and Storage EquipmentAnd you can finally make something of the process engineering divisions.If your audience is process equipment oriented, take time to discuss organization of this subgroup.I invite you to get a copy of MasterFormat and take time to get familiar with the divisions in which you work.CSI has also prepared a Transition Matrix. Available in an excel file that shows the MF04 equivalents to both the 1988 MF and 1995 MF.In the back of the hard copy of the MF04 books that I’m passing around, you will see a KEYWORD index. It lists common terms and then recommends the section numbers which apply to them. This is a very handy resource.
34Divisions MasterFormat 1995 MasterFormat 2004 Process Equipment Subgroup (continued)11 Equipment44 Pollution Control Equipment45 Industry-Specific Manufacturing EquipmentReserved16 Electrical / Special Construction48 Electrical Power Generation49 Reserved
35Unit PricesStandard UnitsDefined in Standard Specifications
36Unit Bid Items / Bid 03-0E2004 BID245 03-SIE-49-2 C O N T R A C T P R O P O S A L O F L O W B I D D E R PAGE 704/23/08 04/27/08ITEM ITEM UNIT OF ESTIMATEDNO. CODE ITEM DESCRIPTION MEASURE QUANTITY BID AMOUNTCONSTRUCTION SITE MANAGEMENT LS , ,000.002 (S) WATER POLLUTION CONTROL PROGRAM LS , ,000.00TEMPORARY CONC WASHOUT FACILITY EA , ,500.004 (S) CONSTRUCTION AREA SIGNS LS , ,000.005 (S) TRAFFIC CONTROL SYSTEM LS 1 150, ,000.006 (S) PORTABLE CHANGEABLE MESSAGE SIGN LS , ,000.00REMOVE METAL BEAM GUARD RAILING LF 6, ,120.00REMOVE ASPHALT CONCRETE DIKE LF ,400.00REMOVE PRECAST CONC POST SUPPORT EA , ,000.0010 (S) COLD PLANE ASPHALT CONC PAVEMENT SQYD ,500.00CLEARING AND GRUBBING LS , ,000.00ROADWAY EXCAVATION CY ,250.00STRUCTURE BACKFILL (SLURRY CEMENT) CY ,250.00CLASS 2 AGGREGATE BASE CY ,750.00HOT MIX ASPHALT (TYPE A) TON ,000.00PLACE HOT MIX ASPHALT DIKE (TYPE F) LF 1, ,050.00PLACE HOT MIX ASPHALT (MISC AREA) SQYD 2, ,300.0018 (F) MINOR CONCRETE (MINOR STRUCTURE) CY , ,000.00PRECAST CONC POST SUPPORT (8 FOOT) EA , ,000.00PRECAST CONC POST SUPPORT (6 FOOT) EA , ,000.0021 (SF) MISCELLANEOUS IRON AND STEEL LB ,580.00DELINEATOR (CLASS 2) EA ,760.00OBJECT MARKER (TYPE L-1) EA24 (S) METAL BEAM GUARD RAILING (STEEL) LF 6, ,975.00METAL BEAM GUARD RAILING (ELEMENT) LF ,200.0026 (S) TRANSITION RAILING (TYPE WB) EA , ,000.0027 (S) TERMINAL SECTION (TYPE C) EA28 (S) END ANCHOR ASSEMBLY (TYPE SFT) EA , ,000.0029 (S) ALTERNATIVE FLARED TERMINAL SYSTEM EA , ,000.0030 (S) PAINT TRAFFIC STRIPE (2-COAT) LF ,100.00MOBILIZATION LS , ,000.00TOTAL 980,685.00
3703-0E2004 BID24503-SIE-49-2 C O N T R A C T P R O P O S A L O F L O W B I D D E R PAGE 704/23/08 04/27/08ITEM NO. ITEM UNIT OFCODE DESCRIPTION MEASUREESTIMATED UNIT BIDQUANTITY PRICE AMOUNT2 (S) WATER POLLUTION CONTROL PROGRAM LS $ 1, $ 1,000.00____________________________________________________________4 (S) CONSTRUCTION AREA SIGNS LS $ 3, $ 3,000.00_____________________________________________________________5 (S) TRAFFIC CONTROL SYSTEM LS $ 150, $ 150, _____________________________________________________________REMOVE METAL BEAM GUARD RAILING LF 6, $ $ 39,120.00REMOVE ASPHALT CONCRETE DIKE LF r $ $ 8,400.00REMOVE PRECAST CONC POST EA $ 2, $ 5,000.0010 (S) COLD PLANE ASPHALT CONC PAVEMENT SQYD $ $ 16,500.00
38UNIT OF ESTIMATED UNIT BID MEASURE QUANTITY PRICE AMOUNTLS $ 98, $ 98,000.00TOTAL $ 980,685.00
39Heavy Estimates take on two styles: Detail Estimates for Lump Sum Contracts and SubcontractsUnit Price Estimates for DOT and other Unit Price ContractsRemember that Heavy/Civil Contractors may act as Subcontractors on many projects
40A Heavy Civil Detail Estimate looks much like a Detail Estimate for a Commercial Project Major DifferencesLarger labor componentLarger equipment componentVery few SubcontractorsMore self performed workNot as many activities or work itemsWork items are often quantified by the agency for Unit Price Estimates
41Structure of a Lump Sum Estimate and Bid Summary Sheet HeadingsDescriptionLaborMaterial (often called Permanent Materials)Consumables / Expendables (often called Expendable Materials)SubcontractorsEquipment Operating Costs or ExpenseRepair Costs (Labor item)Rental Costs or Company Equipment CostsTotal
42Typical Lump Sum Bid Description Labor Materials Expendables Subs Equip OperatingCostsRepairsRentTotalDirect CostsJobsiteIndirectEnd of BidItemsTotal Bid
43Typical Unit Price Bid 03-0E2004 BID245 03-SIE-49-2 C O N T R A C T P R O P O S A L O F L O W B I D D E R PAGE 704/23/08 04/27/08ITEM ITEM UNIT OF ESTIMATEDNO. CODE ITEM DESCRIPTION MEASURE QUANTITY BID AMOUNTCONSTRUCTION SITE MANAGEMENT LS , ,000.002 (S) WATER POLLUTION CONTROL PROGRAM LS , ,000.00TEMPORARY CONC WASHOUT FACILITY EA , ,500.004 (S) CONSTRUCTION AREA SIGNS LS , ,000.005 (S) TRAFFIC CONTROL SYSTEM LS 1 150, ,000.006 (S) PORTABLE CHANGEABLE MESSAGE SIGN LS , ,000.00REMOVE METAL BEAM GUARD RAILING LF 6, ,120.00REMOVE ASPHALT CONCRETE DIKE LF ,400.00REMOVE PRECAST CONC POST SUPPORT EA , ,000.0010 (S) COLD PLANE ASPHALT CONC PAVEMENT SQYD ,500.00CLEARING AND GRUBBING LS , ,000.00ROADWAY EXCAVATION CY ,250.00STRUCTURE BACKFILL (SLURRY CEMENT) CY ,250.00CLASS 2 AGGREGATE BASE CY ,750.00HOT MIX ASPHALT (TYPE A) TON ,000.00PLACE HOT MIX ASPHALT DIKE (TYPE F) LF 1, ,050.00PLACE HOT MIX ASPHALT (MISC AREA) SQYD 2, ,300.0018 (F) MINOR CONCRETE (MINOR STRUCTURE) CY , ,000.00PRECAST CONC POST SUPPORT (8 FOOT) EA , ,000.00PRECAST CONC POST SUPPORT (6 FOOT) EA , ,000.0021 (SF) MISCELLANEOUS IRON AND STEEL LB ,580.00DELINEATOR (CLASS 2) EA ,760.00OBJECT MARKER (TYPE L-1) EA24 (S) METAL BEAM GUARD RAILING (STEEL) LF 6, ,975.00METAL BEAM GUARD RAILING (ELEMENT) LF ,200.0026 (S) TRANSITION RAILING (TYPE WB) EA , ,000.0027 (S) TERMINAL SECTION (TYPE C) EA28 (S) END ANCHOR ASSEMBLY (TYPE SFT) EA , ,000.0029 (S) ALTERNATIVE FLARED TERMINAL SYSTEM EA , ,000.0030 (S) PAINT TRAFFIC STRIPE (2-COAT) LF ,100.00MOBILIZATION LS , ,000.00TOTAL 980,685.00
49Major Difference: Distribution of Indirect Cost into Unit Prices In-directs are totaledEach big item is calculated as a percentage of the total direct costsUsing this percentage, we multiply the total direct costs by each percentageThat number is than added to the base direct cost to come up with a total.It is divided by the quantity to generate a unit priceMajor Difference: Distribution of Indirect Cost into Unit Prices
50How do we do this Distribution of In-directs? First the In-directs and end of bid items are totaled.A total of direct costs is also established with a totalA column of each bid item direct cost is made into a % of the total direct costs.This % is then multiplied by the total indirect costThis % of the indirect costs is than added to the direct costsHow do we do this Distribution of In-directs?
51The Result is: Example of Bid Item Item No. DescriptionHOT MIX ASPHALT (TYPE A)Unit Quantity Unit Price TotalTON $ $ 55,000.00The Result is: Example of Bid Item
52Specification are reviewed for the Item No Specification are reviewed for the Item No., what is included in each work items and how the item will be paid for.
54The Pay Quantity vs. Bid Quantity Defined as a quantity of individual units of work that represents the owner’s engineer’s estimate of the number of units of that type work included in the contract.Pay quantity -Defined as the quantity that is calculated when the work is completed and will be paid for by the owner
55Is also defined as the quantity of projected work at time of bid Is the calculated quantity by the contractor when checking engineer’s quantityMay or may not equal the engineer’s quantityWork quantity
56Relationship of the work quantity to the Bid Item It is generally thought by the engineer to be equal.This is not always true as many contractors have found out – sometimes by surprise
57Indirect Cost : Lump Sum vs. Unit Price When bidding a lump sum, the quantities are not given and certified by the owner. The contractor is responsible for quantity determination. The owner will pay the lump sum bid amount plus any changes.When bidding a unit price contract, the engineer is giving the contractor the quantities and will pay the contractor the in-place quantities. Provisions are made when quantities get substantially out of balance.Indirect Cost : Lump Sum vs. Unit Price
58Indirect Costs from Commercial compared to Heavy Major Differences are:Mobilization costs and items are substantially different. Plant and equipment of large heavy projects.Temporary access / roads etc. can be very differentTemporary power on a commercial project is much different.Surveying requirements can be much different from commercial to heavy construction.Indirect Costs from Commercial compared to Heavy
59Is there any Strategy to Distribution of Indirect Project Costs? To protect out of pocket expenses because of inaccurate bid quantitiesTo favor work performed early in the schedule to create positive cash flows on projectOther strategiesIs there any Strategy to Distribution of Indirect Project Costs?
60Unbalancing the BidWhat words should we be watchful in bidding documents?“grossly unbalanced”“substantially unbalanced”
61What Happens if there are Inaccurate Bid Quantities? First on a Balanced BidMost DOT specifications allow for change if quantities are grossly inaccurate. If there is no provision, the contractor could have the wrong equipment, too much equipment etc.Next on an Unbalanced BidContractor plays the risk of being determined as non responsive and bid being rejected.Owner could be paying a premium on the work.What Happens if there are Inaccurate Bid Quantities?
62What Happens if there are Inaccurate Bid Quantities on a Balanced Bid? Most DOT specifications allow for change if quantities are grossly inaccurate. If there is no provision, the contractor could have the wrong equipment, too much equipment, etc.
63What Happens if there are Inaccurate Bid Quantities on a Unbalanced Bid? Contractor plays the risk of being determined as non responsive and bid being rejected.Owner could be paying a premium on the work.
64Rejection Can be the Consequences of Unbalanced Bid. Owner will use the term: Non-responsive
6503-0E2004 BID24503-SIE-49-2 S U M M A R Y O F R E M A I N I N G B I D D E R S PAGE 904/23/08 04/27/08| |ITEM| SIXTH | SEVENTH| BID AMOUNT | BID AMOUNT1 | 8, |2 | 1,3 | 2, | 2,4 | 3, | 1,5 | 146, | 112,6 | 12, | 4,7 | |8 | |9 | 2, |10 | |11 | 10, | 15,12 | |13 | | 5,14 | |15 | |16 | |17 | |18 | 4, | 1,19 | 2, | 3,20 | 2, | 3,21 | |22 | |23 | |24 | |25 | |26 | 6, | 3,27 | |28 | 1, |29 | 3, | 2,30 | |31 | 100, | 157,TOT 1,032, ,487,484.04How can an Owner tell or why would they even question the Contractor’s Unit Prices?
66Other Bid # 3 Other Bid # 5 Item Unit Unit No Other Bid # 3 Other Bid # 5 Item Unit Unit No. Price Total Price TotalREMOVE ASPHALT CONCRETE DIKE LF 840Possible Example
67Example of Unbalancing: Fixed Costs, In-directs, etc. Remember earlier we spread our indirects and end of bid items over our direct cost items.We did that based on each cost items value and gave each item a piece of the indirect costs based on that value. More costly items got more of the indirect cost.Instead of doing a percentage of each direct cost item, one could allocate any amount of the indirect costs to that bid items.We could even go so far as moving direct costs onto another direct cost in increase its total, keeping in mind that we would want to keep the total the same as a balance bid.Example of Unbalancing: Fixed Costs, In-directs, etc.
68Flow chart of the Heavy Bid Process Quantities are checked against the EngineersEnd of bid item distributed to Bid items
69Unit Price Estimates and The Bid Process Selection\Decision & Review PhaseReview the PlansSpecs. & ContractSelect ProjectDoes work fit with-in the company business plan?Does the company have the bonding capacity to handle the work?Probability of making a profit?Is it the type of work the company and its individuals can succeed at?Does my company have the right plant and equipment?
70Preparation for Pricing SubcontractorDeterminationsEstimator determines the scope of work that will be subcontracted. This is a much smaller group of subcontractors.Begin Takeofffor Self WorkEstimator begins takeoff of quantities of work this contractor will do with their own forces. They will review the specifications for what to include in both the pay quantities and work quantities.Request forMaterial QuotesEstimator determines the scope of materials and sends out for quotes.Heavy contractors often control their own materials. i.e. rock, asphalt, concreteSite VisitEstimator schedules a site visit(Mandatory vs. Voluntary).
71Preparation for Pricing Continued: Request forSub bidsGeneral Conditionsand Indirect JobCost DeterminationJob Plan &PreliminarySchedulingMuch more time it spentOn the job plan and schedulingBecause of the plant andEquipment requirementsHistorical labor &Material CostRecords Reviewed
72Analysis and Pricing Budgeting for Sub trades Subcontract Bid Tab. Labor PricingMaterial PricingPlant andEquipment PricingIndirect Job Cost Pricing
73Cost Extensions & Finalizing the Estimate Estimate SummaryDistribution ofEnd of Bid ItemsTo the Bid ItemsEnd of Bid Items(Profit & Over-head)
74Finalizing the Estimate Bid or ProposalSubmissionAdjustment toBid or ProposalAward ofProjectOwner’s FinalReviewReview & Logfor Historical
75Can be very similar to commercial process when bidding a lump sum. But is very different when bidding a unit price type of contractMaterials can play a major role in the bid processPlant and equipment are a big portion of the workHeavy Bid Process
76The use of digitizers is used more that in commercial because of the speed of earthwork takeoff process.Also almost all heavy estimating is done with computers because of the need to distribute the indirect costs in unit price estimates.Heavy Bid Estimating
77Heavy Civil can be either Lump Sum or Unit Price. SummaryHeavy Civil can be either Lump Sum or Unit Price.The Heavy Civil world also does negotiated work.More risk is associated with Heavy Construction work vs. Commercial work.Equipment productivityLabor productivity