Bill Of Quantities (BOQ) For A Two-Storey Building Construction Essay.

Importance of Cost Estimation and Pricing in Construction Projects

Question:

Discuss about the Construction Management for Bill of Quantities.

The report is based on Bill of Quantities (BOQ) for a new two storey brick building with concrete tiled roof consists of two apartments. The location of the construction of the building is at 52 box road, East Hills. The type of contract is basically based on Australian General Conditions of Contract. BOQ consists of bid process of entire project comprised of estimation of cost, tendering, opening of tender for the project as well as award of contract (Cunningham 2016). Proper cost estimation helps to determine feasibility study of given project and facility for procurement procedure of the project work. It helps to plan the finances needed for successful project completion. From the perspective of the contractors, proper cost estimation helps to prepare a bid for work and facilitate resource arrangements for evaluation as well as execution of the work.

This particular report summarizes the importance of identification and pricing of cost significant preliminaries in order to increase chances of winning the tender of the East Hills project. It also analyzes the priced preliminaries bill for the cost significant preliminaries items for the provided project. From the tendering review, importances of the description of BOQ and in addition to its effects are highlighted throughout the project example.

Jayaraman and Jayaraman (2016) stated that the employer are selected the contractor based on lowest bid criteria. A lowest tendering price is a key significant way to win a tender. Seymour (2017) analysed that selection of lowest bid is not required to reflect true cost of the project work. Tender pricing is a major part to prepare of BOQ. In the given project, cost estimation is done for experienced workers such as sub-contractor those are specialized into building construction. The pricing cost significant preliminaries are done to have cost information based on interaction with the suppliers (Cunningham 2015). Tender price is taking price information throughout quotation for the suppliers as well as sub contractors. This particular project is a government project which provides higher quality and specializes into type of construction they go for quotations (Fichtner and Michel 2016). The success of contractor for obtaining of contract is based on quality of the quotations received for the materials and items to subcontract. It is also required to have competitive prices at the time to prepare the estimation of cost. Standard procedures are being established to the responsibilities of the person those are to carry out the bid functions as well as negotiations that rose (Abas 2017). The list of the items for which there is requirement of quotations is being established with comprehensive assessment of the contracted documents.

Bill of Quantities (BOQ) and Tendering Process

The contractor submits a tender for the project which sets out experience of the organization to undertake the building construction project, their proposed approach and estimation of cost to undertake the project (Larson and Gray 2013). In order to win a contract, a proper tender documentation is required for the project. Into the construction environment, the contractors are tendered low for the elements like preliminaries as well as earthworks to win of the contracts. However, prediction of low bid is a difficult task for the given project. Into the project, lower bid is awarded the contract, then it is suggested that predictions of lower bid is proper for winning the tender. Peng, Ding and Yu (2016) mentioned that bidding performance is analysed by design estimators. The quality of advice offered to the client is improved if the consultant can see the design cost from the bidding results. Then, the contractor can able to relate its ability in order to win the contracts (Abas et al. 2017). The contractors are submitted lower prices for the project elements in order to win contracts of the tender.   

Project overhead estimation is required to improve the accuracy of the tender pricing. Efforts are provided to improve the methods to estimate the indirect cost. The contractor gains a competitive edge by adjusting the preliminaries such as project overhead. Goh and Hall (2013) forwarded the project scenario and concluded that quotations are obtained among the supplier and subcontractor. Therefore, proper project pricing for the project overheads are required to get success into the project bid (Wang and Wei 2014). Into the construction industry, preliminaries are subjective as well as most of the times it is difficult to price the system work. The first section of work is bill of quantities which consist of the financial matters those are related to the contract (Azam, Sabrina and Mohyin 2016).The contractor has responsibility to price the preliminaries items into the tender based on project requirements.

Anifowose et al. (2013) explained that preliminaries section of the bill of quantities contains of two distinct types of items. The items those are not specific but have identifiable cost considered for the purpose of tendering such as contractual necessity for insurances, site ability for the employer as well as payment towards the local authority (Kang et al. 2013). Items those are fixed as well as associated cost which derives from the contractor’s predictable method to bring out the project work. The works are associated to bring of plant from the site and provided that of temporary works (Jayaraman and Jayaraman 2016). The time associated subdivision is provided for the preliminaries items which allow the tenderers to cost the items individually. The tenderer has the capability to expand the time related cost items to outfit particular methods of building construction. The achievement of contractor for gaining of contract is based on superiority of the quotations established for the materials in addition to items to contract out (Brook 2016). Therefore, pricing the preliminaries items are significantly required to maximise chances of winning the tender for the project.

Analysis of Priced Preliminaries Bill

Preliminaries Bill

Conclusion

It is concluded that this particular report is based on estimation of preliminary cost of the items in the project which is conducted for construction of two storey building. Estimation of the price is focused on tender pricing and building up rates for the selected activities from BOQ. The project parties participate into involvement into pricing for this particular project and factors are considered when tender pricing is identified. It is analysed that the tender pricing process consists of receipt of invitation to the tender, decision to the tender, collection of tender documents, examination of the tender documents, collection of tender documents, tender adjudication as well as submission of the tender documents. At the time of pricing the preliminaries items, availability of the project resources, materials, plant and technology are to be considered at pricing time. Pricing of the tender is considered as the major part to prepare the BOQ. This particular procedure is to be done with use of various cost information. In order to do the lower bid, it is considered as difficult task for the given project. Into the project work, there is lower bid that is awarded the contract, and then it is recommended that forecasting of lower bid is appropriate for winning the tender of this particular project work.

References

Abas, A.A., Ismail, Z., Ismail, F. and Arshad, R.A., 2017. Cost of Preliminaries of Construction Projects for Civil Infrastructure Works in Malaysia. Sains Humanika, 9(2).

Anifowose, M.O., Ola-awo, W.A. and Mohammed, T.U., 2013. Assessment of Cost Management Functions of Quantity Surveyors with Lean Methodology. International Journal of Sustainable Construction Engineering and Technology, 4(2), pp.67-81.

Azam, N., Sabrina, Z. and Mohyin, N.A., 2016. Review on costs management in construction. In IIUM Journal of Educational Studies (pp. 30-52). IIUM Press.

Brook, M., 2016. Estimating and tendering for construction work. Taylor & Francis.

Cunningham, T., 2015. ARM4-A Working Guide-Section B-Preliminaries.

Cunningham, T., 2016. The Function and Format of Bills of Quantities: an Irish Context.

Cunningham, T., 2017. Cost Control during The Construction Phase of the Building Project:-The Consultant Quantity Surveyor’s Perspective.

Fichtner, J.J. and Michel, A.N., 2016. The OECD’s Conquest of the United States: Understanding the Costs and Consequences of the BEPS Project and Tax Harmonization. Mercatus Research, Mercatus Center at George Mason University, Arlington, VA.

Goh, J. and Hall, N.G., 2013. Total cost control in project management via satisficing. Management Science, 59(6), pp.1354-1372.

Jayaraman, R. and Jayaraman, R., 2016. Project cost control: a new method to plan and control costs in large projects. Business Process Management Journal, 22(6), pp.1247-1268.

Kang, Y., O'Brien, W.J. and Mulva, S.P., 2013. Value of IT: Indirect impact of IT on construction project performance via Best Practices. Automation in Construction, 35, pp.383-396.

Larson, E.W. and Gray, C., 2013. Project Management: The Managerial Process with MS Project. McGraw-Hill.

Peng, Y., Ding, Y. and Yu, Y., 2016. Grid Project Cost Control Research Based on Data Mining.

Seymour, B., 2017. Preliminary round. Electrical Connection, (Winter 2017), p.46.

Wang, C. and Wei, N., 2014, May. Analysis of Project Cost Control Based on Information Entropy and Gray Correlation. In International Conference on Logistics Engineering, Management and Computer Science (LEMCS 2014). Atlantis Press.