I was faced with the responsibility of examining the consultant’s submission on fence cost. Like previously stated in my previous week blog, the consultant never did a design for a retaining wall along the swampy part of the fence line. We were now left with no other option than to prepare our estimate and invite technically qualified bidders.
In preparing the estimate, the following were adopted:
WBS: This was clearly absent in the earlier estimate; as this had the entire work lumped into a single work package and was not suitable for project management and measuring of work progress. [1] A WBS was made to create the cost breakdown structure with external perimeter solid, external perimeter see-through, retaining wall and internal boundary sections as Level 1. Each work package broken down further into Level 2 using CSI masterformat of Division Two - Existing conditions, Division Three – Concrete, Division Four – Masonry etc.
Estimating costs: We had detailed design concluded and ready for commercial bid. A Class 1 (AACE) or Unit price estimate was adopted because of the level of definition available (detailed design). The design drawings and specification were carefully studied to come out with a comprehensive bill of quantities (BOQ). The following was carried out to arrive at the BOQ.
>Quantity Takeoff: After going through the design and specification, takeoff for materials and work item done. This involved scaling, counting and calculating of materials and work items via a Quantity sheet. The quantities arrived are tabulated for pricing purpose.
>Unit costing: Pricing of the unit cost was the next step after quantity takeoff. This involved two types namely direct costs (labour, equipment, material and subcontract costs associated with each work item ) and indirect cost ( taxes, site/office overheads, profit and contingencies associated with the work item execution)[2]
The estimate met everyone’s satisfaction and budget approved for the fence. The unpriced BOQ was sent out for contractors to bid on.
In preparing an estimate, i recommend that the estimator should have a clear understanding of the scope, be able to interprete design and specification. This allows for reliable estimate after the application of the estimating principles of takeoff and pricing.
References:
1. Giammalvo, P. D. Day 2: AACE Certification Prep Course November 2010.
2. RSMeans Estimating Handbook, 3rd Edition
3. Pearl Garden Estate BOQ, Monigha Idubamo January 2011
January 22, 2011
January 19, 2011
Week#5_Monigha Idubamo_ poor contracting and over valuation
As the Vice-Chairman staff co-operative society estate development steering committee. I was recently asked to co-ordinate the re-award of the estate’s perimeter fence. A look at previous fence contract awarded in the past indicated that project was poorly done and so much money paid for little or nothing.
Upon assumption of duty, we asked for the scope of the previous contract and found out that there was none, other than quote on which the contract was negotiated and awarded. The intent was to find out what went wrong and we discovered that there was no proper selection process for the past contractor and he was paid without a measure of valued work pay mechanism.
In my capacity as the project adviser, I suggested the following:
A. Bidders’ selection through Technical pre-qualification.
In line with above, invitation was sent out to about twenty three contractors. Seventeen of them returned bid and six others did not. A panel with set criteria evaluated and twelve were successful into the commercial round. Presently, the commercial bid has just been concluded awaiting recommendation for award.
B. Payment to be based on earned value system
This met a lot of reservation from other members of the steering committee and the society’s management committee. When the process was explained, they accepted and asked that it be done similarly to the successful bidders during the commercial pre-bid meeting. – 1it was explained to the bidders that the days of poor quality and advance payment were over. They all agreed to abide with the new way of working.
2Criteria for payment will be based on the following:
i. Physical site inspection of extent or work.
ii Work must be in conformance with technical specification through QC inspection
Reports/Tests.
iii. Contractual obligations met.
The first test of the earned value system is in place already with the design consultant. Their milestone payment was reduced to earned value for not meeting up with design of a retaining wall stipulated in their scope; the true value of the retaining wall scope was deducted.
The general lesson learnt here is that we should use only contractors that are capable using the right selection process and pay for only what is deserved. As the project progresses, we shall be informed of its progress and final outcome.
References:
1. Pearl Garden Estate Minutes of meeting 21/12/2010, page 2 item 2.9
2. AACE Certification Preparation Course Material, Dr. Paul Giammalvo November 2010; Page 47 of 94.
Upon assumption of duty, we asked for the scope of the previous contract and found out that there was none, other than quote on which the contract was negotiated and awarded. The intent was to find out what went wrong and we discovered that there was no proper selection process for the past contractor and he was paid without a measure of valued work pay mechanism.
In my capacity as the project adviser, I suggested the following:
A. Bidders’ selection through Technical pre-qualification.
In line with above, invitation was sent out to about twenty three contractors. Seventeen of them returned bid and six others did not. A panel with set criteria evaluated and twelve were successful into the commercial round. Presently, the commercial bid has just been concluded awaiting recommendation for award.
B. Payment to be based on earned value system
This met a lot of reservation from other members of the steering committee and the society’s management committee. When the process was explained, they accepted and asked that it be done similarly to the successful bidders during the commercial pre-bid meeting. – 1it was explained to the bidders that the days of poor quality and advance payment were over. They all agreed to abide with the new way of working.
2Criteria for payment will be based on the following:
i. Physical site inspection of extent or work.
ii Work must be in conformance with technical specification through QC inspection
Reports/Tests.
iii. Contractual obligations met.
The first test of the earned value system is in place already with the design consultant. Their milestone payment was reduced to earned value for not meeting up with design of a retaining wall stipulated in their scope; the true value of the retaining wall scope was deducted.
The general lesson learnt here is that we should use only contractors that are capable using the right selection process and pay for only what is deserved. As the project progresses, we shall be informed of its progress and final outcome.
References:
1. Pearl Garden Estate Minutes of meeting 21/12/2010, page 2 item 2.9
2. AACE Certification Preparation Course Material, Dr. Paul Giammalvo November 2010; Page 47 of 94.
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