Calculating Labour, Plant & Unit Rates

Malta College of Arts & Science & Technology
BTEC National Diploma Level 3 2009/2010

Unit 9: Measuring, Estimating and Tendering Process in Construction and the Built Environment
24/02/2010
Assignment C
Title: Task 1- P9.2
Estimating Methods
a. Explain the term Net Pricing The final price after all deductions such as agency fees, discounts and credit rebates, etc has been taken off.
If the firm has decided to launch the product, there likely is at least a basic understanding of the costs involved; otherwise, there might be no profit to be made. The unit cost of the product sets the lower limit of what the firm might charge, and determines the profit margin at higher prices. The total unit cost of a producing a product is composed of the variable cost of producing each additional unit and fixed costs that are incurred regardless of the quantity produced. The pricing policy should consider both types of costs. b. Explain which items should be included in the preliminaries section of a project, giving at least five examples in your answer. The preliminary project schedules presented herein reflect the total project duration, including the geotechnical exploration program, design and construction. Five examples of Project Preliminaries are:Hire of Tower Crane Insurance Project management Temporary works Scaffolding The total project duration from the beginning of the consultant selection process through the completion of construction and tunnel start-up is estimated to be approximately 16 years. A preliminary project duration summary of this particular project is presented in Table below. Project Phase Design Phase Bid Phase Construction Phase and Start up Total
Karl Attard Class: - NDBS2
Duration 65 20 107 192 1 of 13

24/02/2010
The preliminary project schedule is based on the following assumptions: Tunnel is excavated and lined using one continuous construction contract or using more than one construction contract executed consecutively Tunnel excavation and lining will be a two-pass operation, whereby the entire tunnel will be excavated prior to commencement of the lining operations Consolidation sewers, drop shafts and connection tunnels are constructed concurrently with the main tunnel The rate of excavation and lining of the main tunnel will have a significant impact on the duration of construction. The main tunnel advance rate assumption of 50 feet per day is based on construction in reasonably intact rock. The advance rate should be re-evaluated and adjusted, as necessary, based on the geologic and hydro geologic characteristics ascertained during the geotechnical exploration program. c. List and explain at least five examples of General Overheads The general overheads are defined as permanently recurring costs of contractors head office. Overhead costs are generally divided into home office overhead costs and job overhead costs. The home office overhead costs include items that cannot be readily charged to any one project, but represent the cost of operating the construction company. The job overhead costs include all overhead expenses that will be incurred as a result of executing a specific project. The major difference between the two is that the home office overhead costs are incurred regardless of any specific project. General overhead costs are incurred regardless of whether a project is being executed. These are the costs associated with operating the construction company. Conversely, job overhead is the administrative costs directly associated with the execution of a specific project. General overhead items are determined by an analysis of the construction company and the indirect costs involved in building the project. The job overhead items are determined by the analysis of the direct overhead involved in building the project and those items required in the contract documents, typically the general Conditions and Supplementary Conditions. The length of time to complete a project particularly affects the cost of job overhead because the longer it takes to complete a project the longer the contractor will be paying the salaries associated with job overhead, such as superintendents, how long an office will be required at he site as well as increased cost for utilities and sanitation facilities. The cost of general overhand is spread over all of the projects that are executed within a business cycle. The lower the general overhead the less that is allocated to all of the projects that will be executed during the business cycle. The climate and seasons may affect overhead because any weather, which affects the speed of construction, affects the cost of construction. In hot climates the heat of summer slows construction and increases the cost of labor, air conditioning in the project office and drinking
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water. In cold climates the freezing weather will slow and often completely stop constructions, again increasing construction labor costs, heating costs and may require temporary enclosures. The specifics of this would most likely be found in the written portion of the contract documents, either the specifications themselves or the Supplementary general Conditions. A preliminary work schedule can be used by the estimator to estimate how long it will take to complete the project. This information is particularly useful when estimating job overhead costs and equipment rentals. Contingencies amounts of money must be put into a bid to cover any items that might have been left out, overlooked or to convert unforeseen circumstances. The primary disadvantage of such a practice is it tends to encourage less accuracy in the bidding process. The estimators may feel that he/she can be less meticulous because they have this some of money to cover the littler things that were overlooked. d. Mention at least three situations/circumstances affecting the rate of profit to be applied when calculating rates. The first thing everyone must question when he is going to apply and calculate the rate of profit is: - How much do I really need this project? Order book: - to see how much workers are available to work Size of project: - more profitable to the large projects Capital Required : - such as wages
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Task 2- P9.3
Give a breakdown of the formula required to calculate all- in labour rates, plant rates and unit rates. State any variances between their calculations These calculations are made by the quantity surveyor which then they are given to the contractor. The quantity surveyor make build up of rates which are calculated by the material rates, labour rates, overheads and profit. The cost of material depends on: Direct cost: - you sell it with the same price you had bought it from the supplier Direct cost accessories Allowance for waste Disposal of waste Delivery/transport Distribution Insurance in transit Specialized protection This table below shows how the Labourer Minimum Wage is calculated: Basic salary National Insurance Leave Sick leave Public holidays Health & safety wear Employers insurance Hand tools Government bonuses Inclement weather Training Supervision Total annual cost of Labourer Labour rate Basic salary: - This is the basic rate by which an employee gets paid hour by hour Leave: - 25days per annum is the rate of leave which an employee has. The leave rate has to be paid as the same rate as if an employee is working, even though he/she is on leave. Hourly 3.47 Daily 27.78 27.78 27.78 27.78 Weekly 138.90 Annually 7,222.80 7,222.80 694.50 138.90 305.58 100.00 100.00 100.00 512.47 72.23 144.46 800.00 10,913.21 Notes 52wk/annum 10% of Basic Salary 25days/annum Av. 5days/annum Max 14 days
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Sick leave: - Sick leave rates are to be paid as normal working day if not exceeding 15days. Otherwise, the rate is half for another 15days. No pay if exceeding 30days. The social services then take the rest. National Insurance: - 10% is paid by the employee and another 10% is paid by the employer for the government. Health and safety: - All employees must be provided with Health and Safety equipment to avoid injuries or death. Tools and machinery: - These are compulsory as the workers must work with. Bonus: - The bonus is to be provided every two term; generally on June and December, with a rate of 512.47. Training: - Training must be provided for better performance on work with a rate of 2% of the basic salary. Weather: - 1% allowance of the basic salary is to be provided for workers for external conditions. Supervision: - Is normally employed in each department within a company. The cost of the supervisor divided by number of employees being supervised is the cost for the employer. Insurance: - The rate of the employers liability insurance divided by the number of employee is the insurance cost. Plant rate: - it is the Capital cost + depreciation + cost on capital + maintenance & repair + insurance and licence + operator + fuel + idle time. Unit rate: - Is calculated by adding the cost of material, cost of labour, the overheads, and profits. Labour Labour Overheads Profit Plant Plant Operation Overhead Profit Description Unit Materials Labour Overhead Profit
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Task 3- M9.2
Explain the differences in the accuracy of the measurements for the different applications and stages of work. The evidence must clearly explain the reasons for the varying degrees of accuracy that might be achieved in the measurement processes used during the different stages of a project from inception to completion. In the fields of engineering, industry and statistics, the accuracy of a measurement system is the degree of closeness of measurements of a quantity to its actual (true) value. The precision of a measurement system, also called reproducibility or repeatability, is the degree to which repeated measurements under unchanged conditions show the same results. Although the two words can be synonymous in colloquial use, they are deliberately contrasted in the context of scientific method.
Accuracy indicates proximity of measurement results to the true value, precision to the repeatability or reproducibility of the measurement A measurement system can be accurate but not precise, precise but not accurate, neither, or both. For example, if an experiment contains a systematic error, then increasing the sample size generally increases precision but does not improve accuracy. Eliminating the systematic error improves accuracy but does not change precision. A measurement system is called valid if it is both accurate and precise. Related terms are bias (non-random or directed effects caused by a factor or factors unrelated by the independent variable) and error (random variability), respectively. The terminology is also applied to indirect measurements, that is, values obtained by a computational procedure from observed data.
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In addition to accuracy and precision, measurements may have also a measurement resolution, which is the smallest change in the underlying physical quantity that produces a response in the measurement. Its precision, however, may be low. Few cost estimates for bidding on construction projects are made that do not contain errors of one kind or another. Too many errors on the plus side can be a major reason for a bid not being competitive. Too many errors on the minus side can cause the contractor to lose money if awarded the contract. . Errors in measurements and dimensions taken from plans, drawings, and specifications result in corresponding mistakes in the cost of construction items based on those measurements. Hourly labor wages for construction workers vary countrywide. You should consistently verify current wage rates and extreme benefits for the building trades involved through local union offices, other contractors, supply yards, and other reliable sources. Overtime rates are generally one and one-half to two times regular rates depending on labor agreements and union rules. Always be sure that building materials and supplies are correctly described as to kind, quality, size, and dimensions. Also confirm that they are priced competitively. Using a wrong unit of measure can result in substantial cost increases or decreases. For example, be careful not to record lineal feet for lineal yards, square feet for square yards or cubic feet for cubic yards, and so forth. This source of error might well be number one on the list because of its importance in the early stages of cost estimating. Visiting the proposed site of the project enables the cost estimator to inspect topography, check the soil by boring if necessary, determine if protection of adjacent properties will be needed, and check distances to railroad sidings, supply centers, and the proximity to sources of labor. If existing structures have to be demolished or removed from the premises, the estimator is able to properly determine the probable cost. The owner looks to the general contractor for the completion of the work in compliance with the plans and specifications. The owner does not look to the subcontractors. It is very important that the estimates of subcontractors are carefully reviewed to be sure they comply with the plans and specifications. An important safeguard against overlooking items is to have another person independently review and double check the cost estimate. Taking shortcuts when making an estimate can be risky. Often there is a temptation to take shortcuts when under pressure because of time-limit in which to complete the cost estimate or because of a heavy backlog of work. Shortcuts take the form of guesstimating, using square feet or cubic foot costs in place of details, and using lump sum figures picked out of the air, all of which have inherent risks.
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Some construction projects may have inherent and unusual problems that should be recognized when the cost estimate is being prepared. Failure to make the allowances or contingencies may result in not getting the contract or losing money if awarded the contract. These contingencies include severe winter weather conditions, or extremely hot and humid climates. The project may be located in an area of the country subject to heavy rainfall. Justifications for a realistic contingency include anticipated labor troubles, material shortages, or political problems.
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Task 4- D9.1
Use, evaluate, and justify the selection of an appropriate estimating method for tutor- specified scenario. List of Items are: Excavation trench Foundations Back fill trench and cart away D.P.C Masonry above DPC Concrete column Extra over items Lintels Concrete pits Rain water channel Pointing and plastering Sfrakass Apertures Services Paintings Trees Tiling Fence/ railing/ gates Items Cars.
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Item
Description
qty
unit
rate ()
amount ()
D - Groundwork Excavation for trenches, width exceeding 0.3m A B C maximum depth not exceeding 2.0m dispose of material offsite backfilling around foundations up to street level E - In Situ Concrete & Large Precast Concrete Reinforced Concrete C30 D strip foundations 12.88 cm 130.0 0 140.0 0 1,674.40 75.68 75.68 11.03 cm cm cm 12.00 8.00 20.00 908.16 605.44 220.60
isolated beams
21.47
cm
3,005.80
Reinforcement for In Situ Concrete Bar reinforcement; mild steel bars ; BS 4499, delivered to site cut, bent and labelled. F 25 mm diameter 3,799.0 0 3,000.0 0 758.00 kg 2.00 7,598.00
20 mm diameter
kg
1.00
3,000.00
10 mm diameter Steel fabric reinforcement; BS 4483, delivered to site instandard sheets.
kg
1.00
758.00
reinforcment A98 mesh
20.61
sm
5.00
103.05 10 of 13

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reinforcment C503 mesh Formwork for In-Situ Concrete
31.96
sm
5.00
159.80
Formwork to isolated beams regular shape, height to soffit n.e. 3.0 Precast Concrete
89.38
sm
33.00
2,949.54
Coping; plain concrete C20 measuring overall 250 mm wide x 150 mm high F -Masonry Works Unfaced masonry walls; full bedding, jointing and pointing in cement mortar.
37.40
mts
13.40
501.16
N O
175 mm thick 460 mm thick comprising 2 x 230mm skins Faced masonry; machine dressed; bedding and jointing in lime mortar.
79.34 130.90
sm sm
13.00 27.00
1,031.42 3,534.30
460 mm thick comprising 2 x 230mm skins Formation of jambs
454.10
sm
33.00
14,985.30
Q R
460mm thick 610mm thick Blockouts
61.02 64.98
mts mts
34.00 42.00
2,074.68 2,729.16
formation of blockout not exceeding 0.10m2 in 460mm thick wall Closing of Cavity
3.00
no
16.00
48.00
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closing of cavity between 2x230mm thick walls by approved build up paper Formation of Quoins
53.28
mts
8.50
452.88
extra over for face work - quoins - width 92mm, projector 150mm Coping
227.11
mts
23.00
5,223.53
soft stone coping - 273mm x 150mm Damp Proofing
44.60
mts
4.10
182.86
damp proof course hyload Surface Finishes Rake out joints to a depth of 15 mm; clean; point joints with sand / cement mortar; sand down to receive painting.
24.50
sm
15.50
379.75
To walls; externally Prepare; apply one coat stabilising solution and three coats and three coats of sand based paint.
475.40
sm
1.60
760.64
To walls; externally Landscaping Works
475.40
sm
2.80
1,331.12
C D
Supply of spread vegetable soil Supply of plant mature tree trunks >0.28 <0.63 diameter Windows and Doors Supply and fix of galvanized steel windows
259.00 4.00
cm no
7.50 4.00
1,942.50 16.00
0.83x0.92
27.00
no
160.0
4,320.00 12 of 13

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0 F 1.84x1.63 12.00 no 210.0 0 190.0 0 190.0 0 400.0 0 2,520.00
2.2x0.92
3.00
no
570.00
1.85x0.92
9.00
no
1,710.00
3.6x2.64
2.00
no
800.00
supply and fix of galvanized steel doors K 3.6x2.64 1.00 no 720.0 0
0.00 720.00
supply and fix of galvanized steel window security grilles L 0.83x0.97 9.00 no 140.0 0 220.0 0 190.0 0 188.0 0 1,260.00
1.84x1.63
4.00
no
880.00
2.2x0.92
1.00
no
190.00
1.85x0.92
3.00
no
564.00
69,710.0 9
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Calculating Labour, Plant & Unit Rates

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Calculating Labour, Plant & Unit Rates

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Malta College of Arts & Science & Technology

BTEC National Diploma Level 3 2009/2010

Title: Task 1- P9.2

Duration 65 20 107 192 1 of 13

Malta College of Arts & Science & Technology

Malta College of Arts & Science & Technology

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

10 mm diameter Steel fabric reinforcement; BS 4483, delivered to site instandard sheets.

reinforcment A98 mesh

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

reinforcment C503 mesh Formwork for In-Situ Concrete

460 mm thick comprising 2 x 230mm skins Formation of jambs

460mm thick 610mm thick Blockouts

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

soft stone coping - 273mm x 150mm Damp Proofing

To walls; externally Landscaping Works

Karl Attard Class: - NDBS2

Malta College of Arts & Science & Technology

0 F 1.84x1.63 12.00 no 210.0 0 190.0 0 190.0 0 400.0 0 2,520.00

supply and fix of galvanized steel doors K 3.6x2.64 1.00 no 720.0 0

Karl Attard Class: - NDBS2

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