Outline tendering techniques used by estimators and surveyors when bidding for a construction job

1.1 The content of this report is to outline tendering techniques used by estimators and surveyors when

bidding for a construction job that is faced with a different aspect, which is built into the price e.g. a project being constructed in a heavily built up congested area.

1.2 Assumptions that are made for the purpose of this project:

a) Assuming I am taking the roll of senior estimator for a general contracting firm.

b) We are bidding for the construction of a large commercial project, situated in a city notorious for its narrow streets and heavily built-up areas.

c) I am going to assume that the commercial project is the development of the Bullring Shopping Centre situated in the middle of Birmingham city.

1.3 Some information on the background to the project that is being tender for: At present times Birmingham city is taking major transformation to give it a world-class reputation, the Bullring development is part of major developments that have been done, and will be done in the future. The project is a multi million pound re-development of the old shopping centre into a new multi functional structure. It will still comprise mainly of a shopping centre, but will also have numerous other facilities, including restaurants, bars and office space.

The area surrounding the planned development is heavily built up with shops, offices, a university campus and a children’s hospital. Also because the area is a major city there is a lot of infrastructure, including bus stops and stations and railway stations, some of these items may be affected by the construction work. So in the early stages of preparing the tender, all this information must be taken into account.

1.4 As a contractor bidding for the project we are issued with a complete set of tender documents, including: bill of quantities, specification, ground reports, site investigation, technical drawings including structural engineers, mechanical and electrical and site layout drawings. Due to the shear size and complexity of the project a number of estimators and surveyors would be working on preparing the tender bid. The estimating department, while preparing the cost estimate, takes an overall view of the project and considers the factors that may have an impact on pricing for the project, including production performance anticipated during the construction stage.

1.5 As well as all the tender documents that have been issued, more information needs to be collected for

the contractor to prepare a tender that will maximise the chances of winning the contract. Nearly all the information they will require is due to the fact that the proposed project is in the heart of a notoriously built up city.

2.0 A list of additional information that will be require to prepare a bona-fide tender

* Information regarding the existing area and neighbouring properties/structures and services.

* Local highway agency, regarding the roads and highways surrounding the proposed project area.

* Local Councils regarding work permission permits, any local restrictions for construction.

* Information from suppliers of materials and plant as to supplying items to site.

* Sub-contractors as to any specialist works being used that may affect the surrounding area.

* Local Authorities, planning departments, clerk of the works with regards to restrictions i.e. dust and noise pollution.

Many techniques, books and software packages exist to help with estimating project costs. A few basic rules will also help ensure that an accurate and realistic estimate is produced.

* Assume that resources will only be productive for 80 percent of their time.

* People are generally optimistic and often underestimate how long tasks will take.

* Obtain an expert view.

* Include management time in any estimate.

* Always build in contingency for problem solving, meetings and other unexpected events.

* Cost each task in the Work Breakdown Structure to arrive at a total, rather than trying to cost the project as a whole.

(http://www.projectsmart.fsnet.co.uk/project_estimating.html)

3.0 From initially receiving the tender documents, as the contractor, we will establish a picture of how the project is going to be constructed, the buildability of the project, is it going to be feasible to build? One of the first things that we will notice from the outset is where the future project is situated, an inner city congested area. One of main problems here is the transportation of labour and materials to the site, assuming in the tender documents there is a site boundary plan showing the area that can be used by the main contractor for the project, this may also cover the surrounding area and show any car parking facilities. The actual site may only have limited car parking facilities and there may be a chance of overflow of sub-contractor vehicles, establishing this cost may be awkward because it can not be guaranteed how many vehicles will be at the site at any one time.

The contractor will require information from the local council or highway agency concerning the surrounding area, parking permits maybe required. Due to the characteristic of the project, permission and fees may be charged to the contractor for road usage i.e. for the transporting of large materials into the site using crane or whichever means. As the project progresses the roads surrounding the proposed structure maybe altered to divert traffic, as this is unforeseeable as to what effect it will have on the surrounding area, large preliminary cost will be budgeted into the bid. Consideration of nearby structures, should also be looked at by the estimator, and what effect the project will have on them and if any cost will occur.

3.1 Temporary traffic lights would be built into the tender bid in preliminaries section this is because there maybe a need for it during some stages of the construction, It may be needed when cranes are using the street to manoeuvre materials into position. The traffic flow may need to be disrupted, so the traffic lights would be essential. In most cases when using the surrounding roads for the propose of the project permission maybe needed for the highway agencies and there may be a fee, which must be accounted for.

3.2 Any sub-contractors pricing for the job would be made aware of this problem in there initial quotation, and there may be a certain amount set out in the preliminaries for this cost for the main contractor. Built into the main contractors preliminaries for the site compound, parking for the site agent and any other permanently site based professionals, such as project quantity surveyors and contract managers, and then additional spaces for labourers and any directly employed labour. Along with these there will be temporary parking for professionals visiting site such as architects and consultants etc.

If there is a case of overflow in car parking, extra will be added to the preliminaries for a certain amount of spaces in the nearest car parking facility, this will be cost at the tariff for parking based on the time and days on site, an approximate of 8 hours a day 5 days a week. In this site condition it may be necessary to construct a temporary road and car park for the access to the site. The cost will be calculated and inserted in the preliminaries. The cost of such an item would be made up of the use and waste of sleepers or hardcore, etc, labour laying and removing, transporting debris from the site and making good after removal.

4.0 One of the main factors that must be considered with this type of project environment and situation is the delivery of items to and from site. This will include the delivery of materials, the delivery of plant, the removal of materials and waste. These items are an important issue, as the site will have materials and plant delivered regularly on a daily basis, so this is a very important factor when preparing the tender. Information will be required from the local authority as to if there are any restrictions in and around the site which may cause delays to the program of the project.

Suppliers of materials will have to be contacted regarding their deliveries to site, because of the shear size of the project, large amounts of bricks, for example, might be delivered to site at one time. Dependant upon the size of the haulage for materials, a large lorry may not fit in and around the streets surrounding the project. Instead of doing it by maximum load minimum deliveries, suppliers may need to send smaller haulage vehicles with fewer materials on them. Due to these circumstances, the price of the materials may rise so extra costs would be added to the tender bid.

5.0 Due to the size and complexity of the project, numerous cranes will be built into the preliminaries for use on the site, these may also be used for the loading and off loading of large materials and plant into the site compound. As the main framework of the project will be a large pre-fabricated structure, lots of large structural steel work will be brought to the site and manoeuvred straight into position. Assuming that the local council might not allow the roads closed for a whole day, due to the area being very busy and congested during normal working hours, they could insist that this work be done after hours or during weekends. This may be done because the council does not want too much disruption and inconvenience during the daytime.

As the estimator, after hours work rate must be incorporated into the cost. This may vary on labourers working throughout the night or working on weekends. The estimator would work this out, combining his experience with a contracts managers past experience in to how long it would take for the steel frame to be erected, then this would be added up by the men x man hours x man hours rates x the duration of how long it would take to erect.

5.1 The highway agency may be consulted about a number of things during the project construction. The roads may also be closed during the connection to services. As it is such a large construction project, the service connection would be a considerable size. Statutory bodies would need to be contacted for this part. It could even result in a temporary road being built to divert traffic whilst the connections take place.

6.0 Assuming the project was under construction, the estimator must research what methods are being used in the construction phase by the sub-contractors and if it will effect any of the surrounding areas. During the demolition phase dust and noise levels will be raised and these may affect the surrounding buildings, being that it’s such a built up area. Dependant upon the local authority’s policies, the contractor may be required to dampen down dust produced from such operations as demolition and other operations during the construction phase. This would be done by numerous different methods i.e. using water or dust shields. As the estimator, this will be discussed with either the demolition contractor or whoever is doing the operation, as to the best and the cheapest methods of doing it. The estimator will then build this into his bid.

6.1 During the construction of the project a precaution that the estimator may take is that the main carcass of the structure will be covered with nets to protect the general public and surrounding area from any debris cause by works inside the new structure. Also the estimator would take into account all the near buy properties conditions in a dilapidation surveyor, this would list the condition of the properties and in the future of the project, show if the new construction had effected them. This may also call for some one the adjacent properties to be protected during the construction phase.

This may be for safety reason or have been requested by the local building authority. The estimator must again build this in too his price. Due to the size of the project scaffolding will be used during the main construction phase and as the streets of very narrow surrounding the area, walkways may be incorporated for the public to use. Protection for the public will be used, as they will be walking in close proximity to the structure. Illuminated hoarding would be constructed around the site and would be there for the protection of the general public, this again would be built into the preliminaries for the bid.

6.2 There are common mistakes that can be avoided when tendering for the job and these are some of the common mistakes that can lead to inaccurate estimates.

* Not understanding what is involved to complete an item of work.

* Starting with an amount of money and making the project cost fit it.

* Failing to build in contingency.

* Failing to adjust the estimate in accordance with changes in scope.

7.0 Conclusion

The project, being as large as it is and as complex may even be split in to different phases, because there are so many circumstance and so many things need to be taken into account, a lot of research needs to go into preparing the tender bid and a lot of people, companies and authorities need to be contacted during the collation of information. Due to the narrow streets and congested area and the proposed project a lot of the cost caused by this will be put into the preliminaries.

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