Thursday, December 11, 2014

Construction Cost Estimation.

Construction cost estimate is not only about cost of the construction materials, wages machineries, construction period and profit margin. There are some more factor that need to be consider and inserted. Some of the items which was spell out inside the preliminaries and generally of the bill of quantities in the tender document should not be taken lightly.

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Part of the item that was usually inserted in by quantity surveyor are, insurances, Government Levy, As-built drawings, quality assurance and quality control work. Very often that I came across tenderer that price those item that is not reasonable, especially as-built drawings and quality assurance and quality control works. It was price well below the the actual or market rate. Building As-built drawings for instant, very often that it being price at a range of  5,000-10,000 (currency). Just imagine, for a complete and functional building, there are five (5) major components to make it fully function. The five major components are Civil works, Structural works, Architectural works, electrical works and mechanical works. With these five major works, means contractor need to produce five different set of as-built drawings. How much will each of this As-Built drawing will cost contractor in order for them to produce sets of proper As-built drawings ????. With the pricing range from 5,000 to 10,000, is it possible???

That is only part of the construction cost estimate which need to be consider. How about the environment monitoring, charges by council or authority, occupation safety and health, third party liability and may more?
Hence construction cost estimate shall be priced accordingly to avoid any cash flow difficulties once your are awarded with a project.