Estimation 1 – S8
P&G’s
Lara Tookey
• So, you have priced your own work, and you
have selected your subcontractors…. it can
therefore be said that the “construction
items” have been priced (labour, plant &
materials),
• what other items then need to be priced in
order to ascertain the tender price?
BRAINSTORM EXCERCISE
• Working at your table, provide 10 examples of
the various ‘costs’ that still need to be
included.
Tender
= gross bill
Mark Up (Profit)
Adjudication
Head Office Overheads
Preliminaries i.e. Site Overheads
Prime Costs + Provisional Cost +
Own Sub-contractors + Own
Labour + Materials + Plant
= net bill
Components of a Rate
• Remember, unit rates are a combination of
rates for labour, plant, materials & subcontractors.
• Only the direct site costs are included at this
stage.
– Management are able to develop better
appreciation for project if indirect costs are dealt
with separately.
PRICING PRELIMINARIES &
GENERAL
PROJECT APPRECIATION & ENQUIRIES
Send out material & subcontractor enquiries
Examine documents
Method statements
& schedules
Programmes &
Temporary works design
Site visit
RESOURCES & PREPARATION OF THE ESTIMATE
Select material &
subbie quotations
Establish
outputs for
labour &
plant
Build up rates
Establish rates for
labour & plant
Price
preliminaries
Prepare estimator’s report
Definition
“The site cost of administering a project and
providing general plant, site staff, facilities and
site-based services and other items not
included in all-in-rates”.
“The cost of providing for the above are not
practical or convenient to include in the unit
rate.”
Quick test to see if an item is P&G
Is the expense incurred for a construction
activity forming part of the permanent
structure?
Yes – work
section cost
No
If the project did not
exist would the cost be
incurred?
Yes –
overhead
cost
No – P&G
Cost
What is the purpose of the
preliminaries section?
• Make allowance for those costs which are
necessary for the running of the project but
are not specifically related to any one item or
operation.
What is the function of the various
sections in preliminaries?
• Legal & general obligations – the Contract.
– Guarantees, insurance, etc.
• Project overheads & temporary requirements.
– Management of the works, site huts, programming, toilets,
telephones, etc.
What is the function of the various
sections in preliminaries?
• Special requirements – to meet particular
requirements of specific project.
– Specific security requirements, limited access, etc.
P&G Clause
• “Tenderer's are referred to the Conditions of
Contract, including the Invitation to Tender,
Conditions of Tendering Sections and all
associated Addendums. Tenderers are to make
full allowances in their tender for the content
and intent of these documents”
• The prices and rates throughout the Schedule of Prices shall include
(unless otherwise stated) all labour and materials including necessary
nails, screws, spikes, plugs, glue or other fixings, waste on materials,
conveyance and delivery, storage, unloading, returning packings,
preparation, hoisting, lowering, setting, fitting and fixing in position,
lapping of materials, square cutting, waste, the forming of fair edges,
ends, angles, mitres and junctions between straight and raking or
circular work unless specifically measured herein, all taxes payable,
transit insurances, import duty and customs charges, awards and
conditions payable to workers and also for profit, overheads and
establishment charges. The prices and rates shall also include for all
overtime and holiday work necessary to ensure delivery of the works
on the date stated in the Contract Documents.
• The words "Allow for Attendance" shall include for
the Contractor to attend upon, unload, provide
storage space and working space for all SubContractors (except in such respects as the latter
definitely undertake to provide their own
attendance) and afford all firms or persons
engaged upon the Works or requiring to take
measurements or other legitimate business all
reasonable facilities thereof and the use of such
cranage, hoisting facilities, scaffolding, ladders,
water, watching, lighting and power as required for
the purpose of the Works.
• Sections further sub-divided into Fixed, Value
& Time related costs.
• “Fixed cost”
– Those that do not vary with time
• Plant item – transportation to & from site involves two
single costs which do not alter irrespective of whether
the plant is on site for two or six weeks.
• “Time related cost”
– Those that do vary with time
• Once plant on site, consumer costs directly
proportional to time
• “Value related cost”
– Based on the value of the contract
Heath &
safety
Management
/ Staffing of
the project
Charges,
Levies,
Consultants
Temporary
works &
services
Temporary
Construction
accommodation
equipment
& storage
Access
equipment /
systems
Sequence of events - pricing of the
preliminaries:
 Make notes of general requirements
 Temporary works, subcontract attendances
 Prepare site layout indicating position of:
 Accommodation, access routes, storage areas,
services. Inspect site features & potential impact!
 Use tender programme for planning
 Staff, plant & temporary works
 Read client’s specific requirements
Visit & Inspect Site
 Take time inspecting site & preparing a report on
all aspects of site conditions
 Inspection of sewers & checking of levels, open up
works for inspection;
 Location, site conditions i.e. fire risks, security risks,
radiation hazards, underground conditions




Transportations costs
Accommodation costs
Possible cost of employing specialists for reports
Provision of bulk bins & dumping of debris &
waste.
P&G Clause
• Allow for visiting and inspecting the Site and its
surroundings to ascertain the nature and extent of
the Works, the means of access thereto and any
other matter or item which may influence the
Contractor in making up the tender.
• Allow for uplifting the Building Consent as specified
(The Principal has lodged for Consent and paid all
fees).
Plant, Tools and Other Equipment
• Schedule of plant should be prepared at outset
showing the cost, based on the length of time the
plant is required and appropriate charge-out rate.
• Must consider:
– Initial capital cost, depreciation, maintenance, loss of
interest on capital, licenses, fuel etc
• If not included in unit rate, plant must be priced in
Prelims.
Temporary Facilities & Services
• Definition: Services required for carrying out
the project works.
– Inclusion: Installation, operation, maintenance
and removal.
Temporary Facilities & Services








Power / Lighting / Heating
Water / Sewer
Telephone
Stationery & postage
Office equipment, desks, chairs, filing cabinets etc
Computers (+ consumables)
Humidity / temperature control
Security & safety measures
 Perimeter fencing, lighting, alarm systems, cameras.
 Temporary electrics
 Waste skips
– Mess sheds (incl tables, bench seating, vinyl floor
covering, sink bench unit)
– Store sheds
– Ablutions and latrines
– Cost of erection, dismantling & removal, and
cartage to and from site of temporary buildings.
– Labour & material for cleaning & general
maintenance incl consumables
Supervision
• Contractors employees partially or wholly on
site to carry out general duties.
– Inclusions: Employees in head office carrying out
work directly associated with the project. Salaries,
overtime, travelling, fares.
– Exclusions: Managers in head office carrying out
organization management and the occasional site
visit.
Site Personnel (Management & Staff)
–
–
–
–
–
–
–
–
–
–
Site Manager
General Foreman
Engineer & Assistants
Planning / Scheduling engineer
Quantity surveyor / Cost Engineer & Assistants
Sub-contract co-ordinator / purchasing office
Clerk / Typist
Security patrols / Night watchman / Guard dogs
Health & safety officer (First Aid)
Overtime payment & bonus;
Site Meetings
• All expenses incurred in organising,
accommodating, attending and minuting site
meetings must be included
– Generally based on records of similar jobs.
Hoardings & Scaffolding
• Temporary structures installed to protect workers
and/or the public, to provide safe access to and
around the site and to provide temporary support to
existing work being altered or extended.
– Often a quotation is obtained from a specialist firm for
supply, erection, hire and removal.
• Area of external wall to be covered usually stated in
item description to assist in pricing.
Signboard
• Provision, erection, maintenance and removal.
• Sign writing for Contractor, Arch, principal
consultants etc.
Insurance
• Insurance policies taken out in relation to
construction site activity and associated items.
Footpath Crossing
• Could involve
– Providing temporary protection to footpaths,
grass berms etc
– Making good damage caused as required by Local
Authorities
Access Roads, Paths and Carparks
• Could involve
– Provision of metal etc for temporary roading
– Labour and plant of placing metal
– Reinstatement of roads, grassed areas, as required
if damabed
– Removal and making good
Temporary Services
• Installation, maintenance and removal of a
variety of services, incl cost of all notices,
permits & fees not covered in the building
permit.
– Water
– Drainage for temporary installations
– Electricity
– Telephones
Keep site free of water
• Dewatering, pumping or some other approved
method to ensure site free from water at all
times.
Security of the Works
• Night watchman &/or Security firm
• Security alarm system
Cleaning Building ready for Occupation
• Works carried out at completion of the project
works.
– Housekeeping & fire safety on site, cleaning up &
reinstatement of works on completion.
Other things to think about
•
•
•
•
•
•
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Screens, barricades, rails and nightlights
Notices, permits and Fees
Protection of Public & Private Property
Contract Guarantee Bond
Deposit with Tender
Fire fighting equipment
Guarantees, warranties, testing and samples
HOW DO YOU THINK YOU COULD
REDUCE PRELIMINARIES?!!
How do you think you could reduce
preliminaries?!!
• Minimize temporary storage
– deliver to/near installation locations.
• Move materials once only, with cheapest
labour possible.
• Maximise handling productivity
– Use optimum equipment (capacity, availability,
etc)
Identification, and pricing of preliminaries.
WORKSHOP
Brief
• You are :
– building a new administration building (159m2
GFA) and;
– Undertaking remedial modifications to 296m2
GFA.
• At a school, which will remain operational.
• The new building comprises a single story
structure with slab-on-ground concrete floor
slab over reinforced concrete strip footings
and pad foundations. The structure is light
timber framed construction generally to
NZS3910 (Conditions of Contract for
Building and Civil Engineering Construction)
and NZS3604 (Timber framed buildings).
• Siteworks comprises the construction of a
staff and visitor's carpark including
associated timber retaining walls, hard
landscaping elements including fencing,
concrete paths, raised planter boxes and
exterior lighting. Topsoil and grassing is
required to part of the site but other soft
landscaping (planting) is by Others.
• It is envisaged that approximately 200
meters of perimeter security fencing will be
required for the full length of the contract to
comply with the School's Health and Safety
policies and the project's specification. Note
that part of the site perimeter is adjacent to
existing buildings and it has been
determined that there is no need for
security fencing to these areas.
• For the purposes of this brainstorm activity
(primarily for determining Preliminary &
General costings) you are to assume the
contract period will be 8 (eight) calendar
months commencing one month after
acceptance of Tender.
WHAT ARE YOUR INITIAL
THOUGHTS?
WHAT ISSUES DO YOU HAVE TO
DEAL WITH?
HOW DO YOU PRICE THE ITEMS?