Civil Engineering Project Management (4th Edition)

38 Civil Engineering Project Management
billed in framework and floors to give a parameter to apply to the proposed
building. Similar all-in cost parameters can be produced for all excavation
(based on the bulk excavation); for exterior walls and windows (based on area);
roof (based on area), etc. Having produced a total cost for these principal items,
all other incidental costs for a structure can be expressed as a percentage on.
Pipeline costs can be expressed as per 100 mm diameter of pipe per metre
laid, divided into supply and laying. Overall unit prices can also be developed
for checking purposes, such as the cost of a building per m3 volume; or of a
tank per 1000 m3 storage capacity.
Before the cost parameters are derived from previous priced contracts the
following procedures are necessary.
• Preferably at least three priced contracts should be analysed. If possible
not all should be for the lowest tenders received.
• Preliminaries and overheads (see Section 15.10) should be expressed as a
percentage addition to the total of measured work.
• If a tender is being analysed, general contingencies and dayworks should
also be expressed as percentage additions, or shown separately. If a final
account is being analysed, then all non-identifiable payments for extras,
dayworks and claims should be included in the percentage on.
• Special costs for special circumstances should be separately noted, to
decide whether they apply to the proposed project.
• Prices obtained should be brought up to date by applying a suitable inflation
factor. In the UK published indices of price fluctuation in UK construction
costs are available (the Baxter indices) and overall price movements for
different types of construction are tabulated in the government’s Monthly
Bulletin of Indices. If these are not to hand, good indicators for updating
costs are current dayworks rate for skilled tradesmen and current prices
for C25 grade concrete and reinforcement, as compared with those in the
priced contract being analysed.
The advantages of the method are that the costs are real (i.e. as tendered),
oncosts are included, and the procedure facilitates checking of costs by different
methods. The sum total cost derived needs checking to ensure it appears
reasonable.
During the design stage it may be found that a previous estimate appears
too low; but it is important not to take over-hasty action in reporting this to
the employer. The problems causing the increase should be examined first to see
if some savings are possible. If an estimate must be increased it is better to do
this only once, because a series of increased estimates may cause an employer
to lose confidence in any estimate presented to him.
As the design nears completion more accurate estimates can be produced
using the quantities taken off to prepare tender documents. Such quantities
can be priced from historical data derived from priced contracts as indicated
above, or, if necessary, from various ‘Price Books’ published.
It is important that this estimate is produced before tenders are invited. This
gives the employer an opportunity to decide whether the cost is acceptable and,