1. Lump-sum and unit-price estimates are forms of fixed-price estimates.
A = True B = False
2. The “bidding climate” refers to the anticipated weather conditions during the duration of a project.
A = True B = False
3. An employee of a contractor pays $450 per month for his/her portion of the medical insurance. This is an example of a contractor’s indirect labor costs.
A = True B = False
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1. Lump-sum and unit-price estimates are forms of fixed-price estimates.
A = True B = False
The correct answer is A = True
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2. The “bidding climate” refers to the anticipated weather conditions during the duration of a project.
A = True B = False
The correct answer is B = False
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3. An employee of a contractor pays $450 per month for his/her portion of the medical insurance. This is an example of a contractor’s indirect labor costs.
A = True B = False
The correct answer is B = False
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 Accurate quantity takeoff of material
 Accurate quantity takeoff of labor
 Determine general and project overhead
 What equipment will be needed and when
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 Begin the formation of a project schedule
 Determine how project will be managed
 Develop a list of questions (get answers)
 Begin a relationship with owner/AE
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 In the arena of competitive bidding for a contractor to stay in business?
AND
 In the arena of negotiated bidding what must happen in order to continue to attract clients to the negotiated process?
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 In the competitive arena
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Need to be low bidder on sufficient number of projects to maintain a revenue base
And realize a reasonable profit to stay in business.
 In the negotiated arena
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Reliable advanced cost information that will become the “project cost”
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Lump-Sum Estimates
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Building construction
Nature of work and quantities will defined
Great for owner – financing and risk
Unit-Price Estimates
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What type of construction is normally bid using unitprice estimates?
Nature of work is still well defined
Quantities of material or work items not precise
Who first determines quantities of work items?
Quantities shown for each work item.
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What is the term use to describe a complete listing of all the materials and items of work that will be required for a project? (foundation to a good estimate)
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Quantity survey or quantity take-off
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 Private – procedures (rules and regulations) normally established by owner and AE
 Public – procedures follow various procurement statutes developed by federal, state, county and municipal governments
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 Public bidding statutes are designed to protect the public interest, not that of the contractor or AE. Their essential purpose is to protect public funds; prevent fraud, collusion, and favoritism; and obtain quality construction at reasonable and fair prices.
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The decision to bid by the contractor depends on the bidding climate.
What is meant by “Bidding Climate”?
The bidding climate is the affected by:
1. Bonding capacity considerations
2. Location of project
3. Severity of contractual terms (contractor responsibilities and liabilities)
4. Owner and their financial status
5. Who is the architect/engineer
6. Nature and size of project as it relates to company experience and equipment
7. Labor conditions and supply
8. Completion date
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 Why is a reasonable bidding period important?
1. An accurate bid requires adequate time
2. Too little time to bid results in contractors either not bidding or bidding too high
3. Result of “rushed” or “quick” bids is NOT a lower price
4. When unsure, contractors add
CONTINGENCY $$$$$$$ to their bid
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 Preliminary Considerations
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Become familiar with
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Instruction to bidders
Proposal form
Alternates
General and supplementary/special conditions
Drawing and specifications (addenda)
Form of the contract
Prebid meeting (in-house)
Prebid meeting (with owner)
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 Jobsite visit

Observe job site specific conditions that must be covered in the bid (site access, logistics…)
 Bid invitations
 Quantity surveys (take-offs)
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Unit-price project (AE’s #’s vs contractors)
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Experience needed to do quantity surveys?
General contractor’s cost estimate of own work
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Material Costs – anything that becomes a part of the finished structure
Material Allowance – What is it? Example?
Direct Labor costs
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Basic wage rates of the labor categories
Production rate that applies to the work type
The largest areas of uncertainty
Where is the most reliable labor productivity information to found?
HISTORICAL COST DATA
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