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A Guide to the Pricing and Use of Preliminaries in the Formulation of Budgets, Quotations and Tenders.
Pricing Preliminaries is also clearly a key stage at which clients begin make commercial judgements relating to their desire to secure the work. For these reasons builders should NOT rely on the average percentage allowance set out on the on the Estimate Analysis Form We do not, unless specifically instructed, have enough information about each individual companies working practices to properly cost this area of the work. Our allowance should be removed and replaced with a properly costed figure based on your own calculation.
Preliminaries (extract of TFPBW) v1 Trevor Sadd Associates Ltd Page 1 of 16 Last Edited January 2005
The estimator can start to cost the known Preliminaries (once the key factors have been established) using a check list such as the Preliminaries Tables. At this stage it is essential that the estimator is aware what has been allowed for in the non-preliminary site costs and the overheads so as to avoid the duplication of costs The estimator should also restrict the pricing to a best assessment of how the project will be undertaken noting any concerns to be costed at the second stage. A concern, for example, relating to overtime may require knowledge of how the projects program will impact upon and be affected by other contracts.
The desire to win the work will be further effected by the businesses workload and any other opportunities in the market, for example: secure projects outstanding tenders (and the likelihood of success) other opportunities.
In an ideal world, it is assumed that a builder would already have rejected projects with high levels of risk. However, in practice, contracting usually involves some risk and this can be dealt with in a number of ways, for example costed by the builder on an item by item basis, (based on the level of risk) offset or sub-contracted to others offset within the tender through the use of exclusion clauses (usually agreed prior to tender) instituting procedures and training insurance
Further details of factors effecting such commercial decisions are set out in the Formulating Tenders section and the Sub-contract Pricing Considerations section of the booklet Building Costs and Sources of Supply In most cases the analysis proposed can be simply achieved by pricing the items in two columns.
P14 Notes
Sections P01, P10-13 = Nil cost
Cost Base June 2002
Wks 14 14 14 14
Total
Notes
Preliminaries Summary
Category Notes Total Comment
P01 Employers Requirements P02 Management & Staff P03 Site Accommodation P04 Attendant Labour Costs P05 Miscellaneous Labour Costs P06 Facilities & Services P07 Temporary Works P08 Mechanical Plant P09 Non-Mechanical Plant P10 Miscellaneous and Unlisted P11 Contractual Conditions P12 Adjustments P13 Specifier Costs Site Costs Preliminaries %
Preliminaries Costs
P01 Employers Requirements
Ref 01 02 03 04 05 06 Category Cost Description Unit Wks Rate Total Comment
Contracts Manager Programmer Project Plan Site Plan Quantity Surveyor Agent Engineer Support Staff Site Forman Trade Forman Watchman Others
-
Site Office Mess Room Drying Facilities Storage Containers / Stongbox Toilets Others
-
Transport & Haulage Unloading & Distribution Attendance On DSC Cleaning As Work Proceeds Cleaning On Completion Reinstatement Others
-
Travel Allowances Lodging Allowance Parking Charges / Costs Congestion Charges Insurances % Employers Liability Contract Works Others Unrecoverable Costs Exclusions Theft Inclement Weather (Exceptional) Overtime Unproductive Time Costs Excluded In 'All In Rates' Others
-
Cost Description
Unit
Wks
Rate
Total
Comment
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Power & Lighting Connect & Disconnect Installation Units Used Fuels Water Connect & Disconnect Installation / Standpipes m3 Used Temporary Drainage Security General Measures Site Perimeter Compounds Other Clearing & Disposal Of Rubbish Drying & Humidity Contractors Testing & Samples Asphalt / Concrete Seasonal Building Others
-
Cost Description
Unit
Wks
Rate
Total
Comment
Setting Out Access Roads / Paths Provide Maintain Hardstandings Pumping & Dewatering Hoardings & Fencing Advertising & Notice Boards Support Existing Structures Protection Weather (Water, Temperature) Site Features Maintain Live Services Finished Work Materials Others
-
Cost Description
Unit
Wks
Rate
Total
Comment
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
General Use / Standing Forklifts To/From Site General Use / Standing Dumpers To/From Site General Use / Standing Mixers / Batching Equipment Limited Vehicle Access Hoists Mixers / Batching Equipment Pumps Breaking Compressing, Consolidating Wackers, Vibrators Rollers To/From Site Finishing Others
-
Cost Description
Unit
Wks
Rate
Total
Comment
Small Plant & Hand Tools Hand & Power CCTV (Drains) Ladders & Access Warning & Traffic Traffic Control Road Signs Props & Trenching Others Surveying Equipment Scaffolding (Internal) Scaffolding (External) Putlog Independent Alter & Adapt Hire After First Month Support Access Mobile & Towers Coverings Lifting Equipment Other
Cost Description
Unit
Wks
Rate
Total
Comment
Defect Liability Period Firm Price Allowance Inflation Before Contract Inflation During Contract Cost Of Cash Flow Local Authority & Utility Fees Licenses & Fees Bonds & Warranties Performance Bonds General Conditions Special Conditions Restrictions Phased Work / Specific Order Partial Possession Limited Working Hours Limited Working Space Late Completion Rates & Taxes Professional Fees
-
P12 Adjustments
Ref 01 02 03 04 05 Category Cost Description Unit Wks Rate Total Comment
Deduct General Attendances (Double Entered) Deduct Items Charged To Rates Deduct Items Charged To Overheads General Adjustment
-
P14 Notes
On smaller sites, Contracts Managers and Quantity Surveyors (with their attendant costs) usually form part of a builders overhead charge. However these costs may be moved to Preliminaries where such staff: are based exclusively on one site (i.e. larger projects) are contracted in for a specific project
Working in or near occupied premises - for example works to a partially occupied shop or school could require higher allowances for: Unproductive time due to higher levels of regulation, control, implementing increased security, safety routines, limited working hours, etc., as set out in other sections Overtime rates or incentives to reduce complete certain areas of work during times when the premises are closed or to reduce overall contract period
A project program should be used to identify the potential for overtime and can assist in identifying potential period of unproductive time.
Inclement Weather - for example works to the exteriors of building, especially works involving re-roofing. Unproductive time where trades cannot work due to exceptional wind, rain, frost, etc.
Most rates make a limited provision for inclement weather. However the decision to allow an additional cost is usually a case of balancing in the risks of loss against other works you are likely to be available for those trades to undertake during the same period. Allowance should be made to protect or cover in certain works in P07 A substantive allowance would be required if you had to complete un-seasonal works (such as external decorating in winter) where you had sufficient internal work over the same time period.
Alternatively builders may, in some circumstances, be able to set out their own terms and as such reduce their risk and costs
P12 Adjustments
In costing preliminaries contractors will also need to take care to ensure that they have not duplicated any costs included in the rated work or in the off site overheads. Furthermore care must be taken to ensure that costs are not duplicated within the Preliminaries section. For example a foreman allowed for in P03 may undertake much of the safety works required in section P06. Ideally the duplicated costs would be removed fro the relative section and a note inserted explaining how allowance has been made Alternatively the duplicated charge could be noted and deducted in this section
P14 Notes
Most Preliminaries calculations require a significant level of judgement and it is recommended that estimators record the significant factors affecting their views. These notes are often invaluable when analysing performance or considering the costs of future projects