Planning course

1. Ahmed Elyamany, PhD
October 31/November 3, 2010

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3.  Write a short report (not less than 800 words) in
one of the following topics:
◦ Egyptian Contractors Union
◦ Contractor prequalification
◦ Qualifications of Project Manager
◦ Software used in Estimating
 The report should include:
◦ Cover Page- Introduction- Discussion- Conclusion-
References
 The evaluation criteria are:
◦ Organization 25%
◦ Discussion 50%
◦ References 25%.

4.  By the end of this lecture, you will:
1. Define the meaning and steps of Estimating.
2. Differentiate between Estimation and
Calculation.
3. Estimate the cost of different construction
activities.
4. Define the Method Statement.
5. Prepare a Method Statement for different
construction items.
4

5. Definition:
 To judge approximately the value or produce the
approximately cost of project.
Process:
 Planning and scheduling the estimate
 Project study - Collection of cost information and
rates
 Preparation of method statement
 Assessing output of selected resources
 Calculation of the direct cost of each item
 Calculation of the site overhead
 Estimator report

6. Planning and scheduling the estimate
Project study Collection of cost information Calculation of rates
- - all-in labor rate
-
- - - all-in plant rate
- - material cost
-
- - sub-contractor cost
-
Preparation of method statement
Assessing output of selected resources and elapsed time of resources
Calculation of the direct cost of each item
Calculation of the site overhead
Estimator report

7. 
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

8.  Drawings
 Specifications
 Contract conditions
 Meeting with the owner and architect
 Site visit

9.  General description.
 Soil.
 Topography.
 Transportations.
 Utilities.
 Labors.
 Safety arrangements.
 Temporary buildings.
 Neighbors.

10.  Collection of cost information:
◦ Daily cost of labor.
◦ Daily cost of equipment.
◦ Cost of materials.
 Calculation of rates:
◦ All-in labor rate
◦ All-in plant rate
◦ Material cost
◦ Sub-contractor

11.  All-in labor rate (LE/day) =

+ )– 
( + +

12.  All-in plant rate (LE/day) =

+ + )– 
( +

13.  A statement of the construction methods and
resources to be employed in executing
construction work. This statement is normally
closely linked to the tender program
 Major factors in planning a method statement :
◦ Cost
◦ Time
◦ Resource availability
◦ Quality
◦ Health, Safety, and Environment

14. Alternative methods of construction
Alternative Sequence of work
Alternative rates of construction
Alternative site layout
Preferred method of construction
Pre-tender construction program
Sequence of Duration of Duration of Labor & plant
main activities main activities overall project required

15.  Qualitative sequential screening for Alternative
methods
Alternative methods Acceptable to Feasible Adequate Safety
consultant? quality
Plywood √ √ √ √
Rough-swan √ √ √ √
Steel √
Brick √ √ √
Corrugated iron
Corrugated asbestos √ √ √ √
Trench sides

16.  Cost and time comparison for 3 shuttering
methods that pass the previous screening process
Cost / unit of shutter plywood Swan board Asbestos
Material cost (LE) 20 4 3
Off-site making cost (LE)
+ 19 -- --
-
Residual value (LE) 4 -- --
Number of uses
/ 10 3 1
On-site making cost (LE/use) + 8 9.5 10
{(20+19-4)/10} (4/3)+9.5 3+10
Total cost / use (LE/use)
+8 =11.5 =10.83 =13

17. 
 Methods of Estimating
◦ Unit method

◦ Space method

◦ Element method

◦ Spot method

◦ Detailed cost method


18.  Detailed cost method
 Unit rate method
 Operational method

19.  Quantity of Plain concrete = 1080 m3
 1 m3 of P.C. consists of (250 kg cement + 0.8 m3 gravel +
0.4 m3 sand)
 Vendor price of 1 m3 of P.C. =250 LE / m3
 Estimate Item price for plain concrete
Equipment crew
No. Equipment Production rate All - in rate
1 Pump 30 m3/hr 650 LE/day
3 Truck mixer 9 m3/hr/one 520 LE/day/one
2 Vibrator ------- 150 LE/day/one
Labor crew
No. All – in rate
Foreman 1 90 LE/day
Laborer 5 55 LE/day/one

20. Material cost
Assume allowable for (Handling + wastage + price
increase + discount) = 22 %
Cost of 1 m3 of PC = 250 x 1.22 = 305 LE/m3
Material cost = 1080 x 305 = 329,400 LE
Labor cost
Labor crew cost / day = 1 x 90 + 5 x 55 =365 LE/day
Production rate = 30 OR 3 x 9 = 27 Choose 27 m3/hr
Duration = 1080 27 = 40 hr
Assume: one day = 8 hr
Duration = 40 8 = 5 days
Labor cost = 5days x 365 LE/day = 1,825 LE

21. Equipment cost
Equipment crew cost = 650 +3 x 520 + 2 x 150
= 2,510 LE/day
Duration = 5 days
Equipment cost = 5days x 2,510 LE/day = 12,550 LE
Item cost
Total item cost =329,400 +1,825 +12,550 =343,775
Assume price factor = 1.25
Item price = 343,775 x 1.25 = 429,718.75 LE
Item unit price = 429,718.75 LE 1080 m3
= 397.89 LE/m3

22. Definition :
 A sum of money to cover costs which are
forecasted but are difficult or impossible to
identify when proposing.

23. Example
 If you know that site overheads = 10% direct cost
and mark-up = 15% construction cost
Calculate :
1) Total direct cost, construction cost, tender price, and unit
price of each item for the project assuming no contingency is
added to the total cost estimate
2) The amount of contingency to be added to the total
construction cost estimate using the expected net risk
analysis method
3) The final cost estimate and final tender price assuming
uniform distribution of contingency

24. Direct cost Maximum %
No. Item Unit Quantity
cost probability
Material Equipment labor S/C
1 LEFT ABUTMENT m3 120 9,000 3,000 4,000 - 19,000 14%
2 CENTER PIER m3 100 7,000 200 1,000 - 10,000 12%
3 RIGHT ABUTMENT m3 120 9,000 4,000 2,000 - 19,000 19%
4 DECK m3 140 12,000 3,500 1,500 - 20,000 13%
5 PRE-CAST SPAN m3 job - - - 10,000 12,000 6%
6 FINISHES m3 job - - - 50,000 60,000 12%

25. Solution:
Construction cost = direct cost * 1.10
Tender price = construction cost * 1.15
= 1.10 * 1.15 * direct cost
1) tender price = 1.265 D.C.
X 1.1 X 1.15
total direct cost = 116,200
construction cost = 127,820 case 1
tender price = 146,993 Direct construction item
No.
cost cost price
1 16,000 17,600 20,240
2 8,200 9,020 10,373
3 15,000 16,500 18,975
4 17,000 18,700 21,505
5 10,000 11,000 12,650
6 50,000 55,000 63,250
Totals 116,200 127,820 146,993

26. Contingency calculation
-
construction
construction
max
max
x case 2
max.
max.
case 2
%
%
net
net
expected final item
No.
No. cost cost risk prob. risk Cost price
cost cost risk prob. risk
1 17,600 19,000 1,400 14% 196 17,822.73 20,496.14
1 17,600 19,000 1,400 14% 196
2 9,020 10,000 980 12% 117.6 9,134.15 10,504.27
3 16,500 19,000 2,500 19% 475 16,708.81 19,215.13
4 18,700 20,000 1,300 13% 169 18,936.65 21,777.15
5 11,000 12,000 1,000 6% 60 11,139.21 12,810.09
6 55,000 60,000 5,000 12% 600 55,696.03 64,050.43
Total 127,820 1617.6 129,437.56 148,853.20
From the table above
amount of contingency to be added = 1617.6
contingency as % of total construction cost = (1617.6/127,820)*100 = 1.265 %
Total cost with contingency = 127,820 * 1.012655 = 129,437.56
Tender price with contingency = 129,437.56 * 1.15 = 148,53.2

27. Q1-Select the best answer for each of the following sentences:
1. The invitation to bidding should include:
A)Drawings. B)Specifications. C)Initial and final bond. D)Bill of Quantity
2. In a certain highway project, the contractor decided to add site
overhead equal to 15% of direct cost, general overhead equal to
5% of construction cost, and profit & risk equal to 5% of net cost.
The price factor should equal:
A)1.25 B) 1.0 C) 1.2678 D)25%
3.The Profit & Risk is added to the project cost by the:
A)Estimator. B)Owner. C)Architect/Engineer. D)Senior manager.
4.The supplementary conditions may include:
A)Project duration. B)Payment system. C)Claims and change orders
system. D)All the above.
5. Contract documents do not include:
A)Drawings. B)Priced Bill of Quantity. C)Letter of offer. D)Contract
conditions.

28. Questions?
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