Estimating and tendering for construction work

380 Pages·2008·17.32 MB·English

by  Mark Brook

Estimating and Tendering for
Construction Work
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ESTIMATING AND
TENDERING FOR
CONSTRUCTION WORK
Fourth edition
Martin Brook
BEng(Tech) FCIOB

AMSTERDAM • BOSTON • HEIDELBERG • LONDON • NEW YORK
OXFORD • PARIS • SAN DIEGO • SAN FRANCISCO
SINGAPORE • SYDNEY • TOKYO
Butterworth Heinemann is an imprint of Elsevier
Butterworth-Heinemann is an imprint of Elsevier
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First published 1993
Second Edition 1998
Reprinted 1999, 2001, 2002, 2003
Third edition 2004
Reprinted 2005(twice), 2006
Fourth edition 2008
Copyright © 2008, Martin Brook. All rights reserved
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ISBN: 978-0-7506-8616-7
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08 09 10 10 9 8 7 6 5 4 3 2
Contents
Preface x
Acknowledgements xiii
List of fi gures xiv
Abbreviations used in the text xix
1 Organization of the estimating function 1
Team roles and organization 1
Quality management 9
Health, safety and welfare 10
2 Procurement paths 13
Introduction 13
Clients’ needs 14
Contractor involvement 15
Partnering 16
Apportionment of risk 17
Traditional method 19
Design and build 20
Management contracting 22
Construction management 24
Private Finance Initiative 26
3 Forms of contract 36
Introduction 36
Essentials of a valid construction contract 36
Standard forms of contract 38
Sub-contract forms 41

Understanding contractual obligations 43
4 Tender documentation 46
Introduction 46
Coordinated project information 47
Documents used as the basis of a tender 58
Formal tender documents 61
v
Contents
5 Estimating methods 66
Introduction 66
Single-rate approximate estimating 70
Multiple-rate approximate estimating 71
Approximate quantities 74
Analytical estimating 77
Operational estimating 82
6 Contractor selection and decision to tender 85
Introduction 85
Bundling projects 87
Competition and negotiation 88
Abuse of tendering procedures 91
Decision to tender 94
Inspection of tender documents 97
Competition legislation 98
7 Project appreciation and enquiries to suppliers and sub-contractors 102
Introduction 102
Estimate timetable 102
Pricing strategy 104
Schedules 104
The estimating team 106
Visits to consultants and site 109
Enquiries to suppliers and sub-contractors 111
Enquiries for materials 113
Enquiries to sub-contractors 115
8 Tenders with cost planning 118
Introduction 118
Terminology 119
Cost plan aims 121
Funding and affordability 123
Benchmarking 124
Cost benchmarking 125
Re-basing cost data 125
Target cost plans 126
Design to cost 128
Design to cost tools 131
Controlling areas 134
New build and refurbishment 136
Pricing the refurbishment of buildings 136
vi
Contents
Condition surveys 138
Furniture, equipment and ICT 139
Fixtures, fi ttings and medical equipment in hospitals 141
Aspects of good practice 143
Adjustments for location 144
Cost plan format 145
‘Linear’ bill of quantities 145
Tender timetable and reviews 146
Final review 147
Value drawdown charts 150
9 Tender planning and method statements 152
Introduction 152
The role of the planning engineer 152
Method statements 153
Logistical planning 154
Tender programmes 156
10 Resource costs – labour, materials and plant 160
Introduction 160
Labour rates 160
Material rates 163
Plant rates 165
11 Unit rate pricing 168
Introduction 168
Components of a rate 168
Method of measurement 169
Pricing notes 169
Model rate and pricing examples 171
12 Sub-contractors and market testing 214
Introduction 214
Domestic sub-contractors 214
Nominated sub-contractors 219
Market testing rates for cost planned tenders 221

13 Risk, opportunities and fl uctuations 223
Introduction 223
Risks and opportunities 224
Risk management 225
Collaborative projects 226
Risk workshops 226
vii
Contents
Pricing risks 227
Range of possible outcomes 228
Comparison of common distributions 230
Monte Carlo simulation 230
Standard fl uctuations clauses 230
Calculation of non-recoverable increases 232
Infl ation calculations for tenders with cost planning 237
14 Provisional sums and dayworks 239
Introduction 239
Provisional sums for undefi ned work 239
Provisional sums for defi ned work 239
Dayworks 240
Overheads and profi t 241
15 Preliminaries 246
Introduction 246
Pricing preliminaries 246
Pricing the preliminaries bill 249
Preliminaries for tenders based on cost planning 263
Benchmark data for preliminaries 263
Preliminaries workbook 264
Design fees and charges 265
16 Cashfl ow forecasts 267
Introduction 267
Cashfl ow calculations 267
Example of a contractor ’s cashfl ow forecast 268
17 Completing the estimate and fi nal tender review 277
Completing the estimate 277
Estimator ’s report 279
Comments on tender summary form 282
Tender summary for a cost-planned tender 284
Overheads and profi t 284

18. Tender submission and results 287
Introduction 287
Completion of priced bills 288
Tender submission for cost-planned tenders 290
Outputs from estimate 290
Detailed submissions 291
viii
Contents
Tender presentation 291
Vetting of tenders 294
Post-tender negotiations and award 295
Tendering performance and analysis of results 295
Bidding strategy 301
19 Action with the successful tender 302
Introduction 302
Information transfer 302
Feedback 306
20 Computer-aided estimating 309
Introduction 309
Aims of computer-aided estimating 310
Communications and collaborative systems 311
E-tendering 315
Electronic exchange of information 317
On-line auctions 318
Reverse auctions 318
Software 321
Computer-aided estimating packages 321
General-purpose software 325
Applications programs 326
Systems programs 326
Evaluation of general purpose and bespoke software for estimating 334
Comparison of estimating package and spreadsheet for a
cost-planned tender 336
Hardware 336
Networking 337
Implementation 338
The future 340
Further reading 345
Index 349

ix