Pricing Process
The basic pricing process of any business is that you walk through three steps to a point that you can have actual data at the completion of the project. Then by basic math – you can interpolate those costs $X/m2 over the footprint of the building. Now if you can take out all the variables of a project and bring one project back to apples for apples – this cost can be applied to m2 rate for future tenders as either feasibility – This rate/m2 is called “Benchmarking”.
On architectural trades that are very similar benchmarking is a powerful and quick method to either check overall costs or if you are in a bind, you can refer back to older projects and plugin an estimated cost and simply escalate the cost based on published CP data.
QUANTITIES
Quantity or surveyors work out quantities
ESTIMATING Principles
Estimator applies rates to the quantities and group costs into Trade Packages.
Procurement
Project Managers and Contract Administrators procure the packages.
A “Cost Planner” uses this built data (Benchmarking) and industry rates often in their role to smash out quick numbers across building “elements” – floors, walls, roof, internals, etc. in approximately 15 to 20 key elements of the building. I really good estimate can break down these “elements” into percentages of the building cost too great accuracy. But this is still the purest form of estimating and is called “Elemental Cost Planning”.
In most cases, cost plans are used in feasibility or huge D&C projects where documents are simply not available – so these people need to extrapolate data from any manner of form to get to a number.
COST PLAN FORMAT
The list below illustrates the headlines fan Elemental Cost plan.
- Consultant Fees
2. Authority fees, (% of Construction Costs)
3. Demolition ($/m2)
4. Earthwork & Site Stabilization ($/m2)
5. Structures (skeleton) ($/m2)
6. Internal Walls ($/m2)
6. External walls ($/m2)
7. Roof ($/m2)
9. Finishing Trades ($/m2)
10.Internal Fittings & Fitments
11.Services trades ($/m2)
12.External Works ($/m2)
13.Provisional Sums ( Rate based of science)
14.Preliminaries (% of Construction Costs)
15.Overheads (5 % of Construction Costs)
16.Margin (% of Construction Costs)
So a good example of a building element with a cost plan would be external walls. Looking from outside to in – the rate for the masonry on the outside skin, then structural framing, insulation, internal lining and painting as one rate, any windows or door would be an “extra over cost”.
On a BOQ – these building elements are broken down into great detail and normally follow a procurement pattern which is also linked to trade cost codes.
The way in which you procure the trade package will be reflected within the BOQ.
MEASUREMENT RULES
The Australian Standard Method (Green Book) is a very disciplined document that spells out a way that all things should be measured and by default – the way construction should be procured. Over the years the building has become more a management exercise where we are less hands-on builders but more managers of a process. So components have been broken up into trade packages and some packages have been absorbed and other packages have been broken into smaller components to reduce risk to the builder. So again the recipe in which one builder approaches a project may be different to other builders. The system is the same to give you a fighting chance not to miss building items under the stress of a bid. Bill the same way every time and you are less likely to miss something.
Most external BOQs (produced by consultant quantity surveyor ) normally have a note stating that the measurement rules are based on an “Abbreviated format of the Australian Method Of Measurement”. This reference to this Australian Standard is a constant base throughout all of Australia, however, it has site-specific and regional twists. The standard is not mandatory it is a guideline.
So even if you are producing a BOQ – follow the basic elemental format.
BOQ or Builders Bill Format
I have presented the list below the same way as the elemental list above to illustrate the way I approach a systematic way of billing. In a builders bill, you would most likely not have these first layer headings however the list below would be consistent with a larger tender. Any specialized trade packages computer flooring, wallpaper, etc can be inserted into the bill within the trade elements (groups).
So the elemental list can expand out to over 50 to 80 trade headings depending on the type of project, inclusions, etc.
- Design consultants including architect, structural engineers, civil engineers,
- Town planner
- Services engineers – electrical, mechanical, fire, hydraulic, etc
- Structural & civil engineers
- Stormwater management plan
- BCA and /or fire engineer,
- Part J consultant, PCA
- Environmental scientist, contaminant report, hazmat & asbestos report
- Geotechnics report
- Reports – flora & fauna, flood & traffic.
- Water design fee
- Sewer and water fees
- Building over sewer fees
- Operational works
- Footpath bonds
- Building zones
- Road closures
- Flesh water acts
- Inspection fees
- Fire department inspection fees & sign off.
- Fire brigade call out risk
- Hydrant & FHR flow test
- Pressure tests
- Hazardous material design
- Road services design fees
- Demolition
- Contamination
- Site clear
- Bulk excavation
- Site stabilization
- Civil hydraulics
- OSD, pits, tanks, and bio basins
- Piling
- Detailed excavation
- Formwork
- Concrete
- Reinforcement
- Post tension
- Precast/tilt panel
- Structural steel
- Framing
- Roofing
- Roof hatches
- Roof safety system
- Roof walkways
- Roof platforms
- Masonry
- Render
- External linings
- Windows & doors
- Roller shutters
- External screens, hoods, sails & shade clothe
- Metalwork
- Partition
- Ceilings
- Doors
- Operable walls
- Carpentry & woodwork
- Tanking & waterproofing
- Tiling
- Carpet & vinyl
- Epoxy
- Painting subcontractor
- Joinery
- Toilet partitions & benches
- Bathroom accessories
- Mirrors & glazing
- Plumbing fittings and fixtures
- Commercial kitchen & laundries
- Appliances & White Goods
- Work stations
- Loose Furniture & FFE
- Plumbing / Hydraulics
- Syphonic
- Rainwater harvest
- Fire hose reels and hydrants
- Fire service – Wet fire (sprinklers & suppression)
- Fire services – Dry fire
- Fire extinguishers and blankets
- Fire tanks, booster pumps and assembles
- Electrical HV / Substations
- Electrical service
- Security services
- Mechanical services
- Building management system
- Vertical transport
- Kerb & gutter
- Asphalt & pavements
- Line marking, bollards & wheel stops
- Traffic management systems
- Directional signage & general signage
- External furniture & play equipment
- Fencing, gates, and barriers
- Irrigation system & drainage
- Landscaping
- External furniture & equipment (FFE)
- Council land (Works outside the boundary)
- Road works (RMS)
- Provisional Sums
- Prime Cost Items
Management team
- Site staff
- Temporary fencing & hoarding
- Site accommodation
- Materials handling including cranage
- Scaffolding
- All other indirect costs
- Systems management recovery
- Document control recovery
- Long services levies
- Professional indemnity insurance
- Public liability insurance
- Overhead recoverable
- Bank guarantees
- Design risk
- Construction risk
- Margin
It should be noted that this list above is just headings which could also have subheads and another layer below. The body of the packages could be as little of 10 Lines or in the hundreds. So a standard BOQ is a small to the large novel.
RFT PRICING SCHEDULES Format
The modern-day client normally is well educated or have some project manager experienced in the process to run tenders and many of the shopping and bulk warehouse chains are basically building to a building guideline or building brief. Either way – you will often have a client that wishes to have all their projects presented in a similar way so they can compare builders apples for apples. If the client schedules are similar to the building companies’ standard format then that is normally not so much as an issue but is a client wishes to reinvent the industry standard of measurement – I would suggest a few paths of travel.
For government clients – suck it up and figure away, as if you don’t fill in the schedules the way they wish. Then you can get marked down in the tender appraisal in post-tender.
For private clients fill in the tender the best way possible to suit your own tender format and simply place a note in tender schedules as either “Included or refer to clarifications).
Produce your tender in the normal format and then create an excel spreadsheet that can assign costs to the client’s pricing schedules accordingly. Near enough is normally good enough if the allocation is a real indication of the cost that the client has focused on. Remember the client wants to see that you have captured a price in the schedules.
If you wish to read more about
Tender Process – Click Here