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Pricing Preliminaries for Granny Flat Project

Introduction

The realization of the construction project is enabled by a follow-up of different phases. The creation of an image of the project to realize while setting up the limits of costs to use are amongst the preliminary phases of realizing an engineering project. However, the owners of construction projects aim to get the best deal from the contractors who make their bids through the tendering process. The estimators wish to make it the best way pleasant for the project owners to accept their bids. This is achieved through the application of the best pricing preliminaries for a construction project by involving proper research and estimations of the costs for the project. There is importance associated with the pricing preliminaries for a construction project.

Importance of Pricing Preliminaries

Pricing preliminaries are best used to convince the construction owners to accept bids from contractors. Their importance is carried in the composition of different costs to be incurred during the entire phases of the realization of a construction process (Ryan, 2017). The costs are set on distinguishing factors based on maintenance, supervision, and management. Thus, the importance of the pricing preliminary is based on the following factors:

  1. Distinguishing costs for contractors in their CDM duties

CDM duties are based on the construction, design, and management procedures that a principal contractor can undergo during the entirety of the construction process. The pricing preliminaries help cover the costs of this order, ranging from the architects to the workers involved in finishing processes. A construction project carries the processes of planning, managing, monitoring, and coordinating of the activities to be involved in the process. The principal engineer is mandated of all these duties (Meredith et al., 2017). While the person may not be engaging directly in these roles, there are allocated costs towards the execution of each phase and duty stated. The assigning of sub-contractors and project managers, who require payments in their respective professions, contributes to the costs of realizing any form of construction. Again, the costs here do not only count for the part of physical engagements. The Health and safety risks of every person involved in the construction process, like foremen, have to be catered for. All these costs have to be known to the principal engineer before the construction processes are commenced, thus covered in the preliminary pricing phase which helps in setting bids for tenders.

  1. Analyzing the level of Supervision required

Every construction project requires different forms of supervision processes and activities. This is determined by the form of plans which the project owner has selected, the fluctuating effects of costs of materials, and the duration or urgency of the project. When the construction project plans are complicated, the level of supervision required is higher. The contractors and sub-contractors should be helped in discovering how the foremen and different workers should be let know on every detail concerning the realization of every phase. This is because of the demand for every project. Again, the fluctuation in prices of building materials is an aspect that the contractors should remain aware of. This would be made achievable through the supervision of every phase of a construction process of the Granny Flat project (Lungu, 2019). The reason behind this is because of the different times in which each phase is realized, and which may command different prices of materials to be used. The urgency in construction helps define the form of supervision to be administered towards the realization of a construction project. However, the urgent the realization, the higher the costs to be incurred. This is all based on the requirements of the project owner. The estimator is thus mandated to include the costs of management regarding the affecting factors based on supervision, which should impress the project owner to accept the bid of a construction agency.

  1. Management of the works by sub-contractors

Sub-contractors are assigned the duties of managing a project’s realization during the various phases of execution. The management of a project involves the control of the project managers, suppliers, and workers. The costs of management are thus in allocation to these different involved parties of a project conception (Schrapers, 2018). An estimation which caters for the appropriate and understandable values which the project owner can meet is subject to acceptance of the bid from a construction organization. The estimator is thus charged with making it as safe, achievable, and with no bias as per the estimated costs and affordability by the project owner. When all the costs of the management team and parties have been catered for, project owners have the decision to make on the bid for the tender of the construction project set by a construction company.

Preliminaries Bills

Project cost estimators, designed to prepare the best tenders to bid for contracts from project owners, must consider different areas of a project which command costs during the preparation of a pricing preliminary process. This helps them set preliminary bills of the resulting project. The different costs considered in setting up preliminary bills for the Granny Flat project are as follows:

  1. Employers’ Requirements

A project requires a set duration to be realized. However, an efficient team to execute the duties is required. This team composes of workers to undertake different activities in the process of the realization of a project. The cost incurred by the sub-contractors to pay for the services provided by the employees depends on the number of employees, the quality of the employees, and the duration required for the project to be realized. Where both the quality and quantity of employees are regarded as visible quantities, the duration of the project also plays a big role in changing the costs of construction. If Granny Flat Project’s owners go for a short period for the realization of their project, it would mean the employees work on overtime hours. This would serve as added costs leading to a higher estimation of the construction costs.

  1. Management and Staff

Every task executed in a construction project is made easy by the management and staff. The delegation of duties from the sub-contractor to the foremen, who help in controlling then activities done by the worker, ensures that every task is fully performed. However, the cost to be incurred by the project owner will depend on the quality and quantity of every party involved in this project execution. The higher the quality and quantity of the various man-work involved, the higher the estimable cost of a construction project. Again, when the payments are done on daily basis, reluctance may contribute to an increase in costs when the supervision is not well assured. Thus, the management and staff components should be well paid so that they assure the proper running of the project’s tasks.

  1. Facilities and Services

A construction company owns both the facilities and will provide a wide range of services required for the execution of Granny’s Flat Project. However, Granny’s Flat Project owner is mandated to include the payments for the different facilities to be used during the construction phase of this project. This will also include the people charged with operating the different machines in the working areas, as well as the costs of delivered work. The payment costs would be set on a daily, monthly, or yearly basis, depending on how the owners wish to set the payments. However, the charges are set inclusive of the security, and safety purposes, which help cover for breakdowns of facilities or injuries sustained by the operators during the construction project phase.

  1. Temporary works

Different phases of constructing a project require various types of activities. Temporary works refer to the tasks performed to ensure that the succeeding phase of construction is established on an already prepared land, or landing member. The estimations are to cover for land excavations, formworks, false works, and shoring phases (Street, 2018). Each cost here is important because it will ensure that the delegated parties perform their duties wholeheartedly and to the satisfaction of Granny’s Flat project owner. Importantly, the best estimates for the bills of this preliminary phase of a project construction would ensure observance of the right durations for the covering of every phase of the project. Granny Flat Project owner should be aware of the delays which may be caused when the set estimates of this phase are not taken into proper considerations.

  1. Site Accommodation 

During the construction phases, close supervision is required as well as early turn-up of different forms of employees. The project manager is charged with the responsibility of ensuring that all daily duties are delegated to the workers accordingly. The supervisory skills are laid to be executed from close places. Thus, constructing temporary accommodation facilities like ‘accommodation huts’ would ensure that project managers do not have to be far away from the project’s premises. Again, some phases require late-night executions like the erection of columns and the spreading of floors. During these tact processes, project managers, foremen, and workers would be allowed to spend most of the night hours in the construction area. An efficient accommodation is required, or else extra pay costs to catch areas to spend their nights from.

  1. Contract Conditions

The agreement set to work between the project owner and the construction company that bids for the tender works based on the realization of the project identify the contract conditions. This entails the duration of construction, the quality desired by the project owner, the rules to be observed, integrity and honesty in work, and the project’s eligibility with the set laws of construction. When an agreement is set after the contract has been accepted, any party which breaks the set guidelines is to be accountable for the incurred costs in covering the mess. Again, no party has the right to abandon the contract as accepted, as this would lead to the delays of the construction. Any between the two parties, which abandons the contract agreement is to compensate the other (2 times) the incurred costs to the last dot of the construction phase. The project owner is not accountable for the changes in costs of materials of construction thus an increase or decrease would be handled by the contacted team.

  1. Mechanical Plant

These refer to all equipment used to back up human physical energy in the execution of different tasks within the construction project. Mechanical plants to be used during the realization of the different phases of Granny’s Flat Project are; 360-degree excavators, loading shovels, overhead Gantry cranes, lorry loader, and more importantly a 180-degree backhoe loader for digging, trenching, backfilling, and material handling purposes (Fizah, 2019). These materials will need to be hired by the construction company because carrying inclusivity in the bill estimations during this preliminary pricing phase of this tender, it would create a higher value in the needed amounts for project execution. Again, due to fluctuation in the maintenance costs depend on the duration in which the project is to take for its completion, the costs based on the mechanical plant to be employed in Granny’s Flat Project are not going to be included in this tender.

  1. Non-mechanical Plant

This is to cover for the auxiliary costs like temporary fencing of the construction site, setting up of temporal roads leading to the construction site, and creation of space for the storage of construction materials. Accessibility to the construction site is to be ensured through the facilitation of ample space from the near-by road to connect with the site. The temporal aspect of this will serve for the non-mechanical plant required within the project.

Summary of the Preliminaries Bill

Component Quantity/Quality Cost/X/Day Totals Cost($) (8 Months)
1.      Employees 7 Foremen & 41 Ground’s men $1500/F.M; $800/G.M 6,928,000
2.      Staff and Management 1 Project manager, 12 junior supervisors $4000/P.M; $2500/J.S  

5,440,000

3.      Facilities & Services Security & Damage insurance costs $100000/Damage

$500000/Security-Safety

 

7,200,000

4.      Temporary Work Excavation, Cooling of columns, beams and floors. $500000/Excavation, $750/Column/Floor, $300/Beam  

586,550

5.      Site Accommodation 3 project huts $100000/Construction Hut 300,000
6.      Contract Conditions 2-Times Levy kick ———— ——–
7.      Mechanical Plants 5 Lorries, 1-3600 excavator, 1 Crane, 20 loading shovels $50000/Lorry, $300000/3600 excavator, $100000/crane, $5000/Loading Shovel  

 

120,000,000

8.      Non-mechanical plants A bundle of Chain link $120/Chain link 120
TOTAL COSTS ~~AUD 145M

Table 1: Preliminaries Bills for Granny’s Flat Project (Ritchie et al., 2018).

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