Estimating for Heavy

Construction and Unit Price Bids

Hal Johnston

Faculty of Civil Engineering

Department of Economics and
Management

CZECH TECHNICAL UNIVERSITY

IN PRAGUE
 Hal Johnston

◦ Professor (20 years)

Short Bio
 Construction Management Department
 California State Polytechnic University (Cal Poly)
 San Luis Obispo, California, USA

◦ Professional Construction Experience (17 years)

 Bechtel – EPC/CM
 Morrison Knudson – Design Build/General/CM
 The Austin Company – Design Build
 R.E. Bayley Construction – General Contractor
 Mason/Johnston General Contractors – General

◦ Education
 B.S. in Building Theory and Practice – Washington State University
 Masters in Building Construction – University of Florida

◦ Other
 2 books, many scholarly papers, given many professional seminars
 Latest seminar for the ASCE – Atlanta (2 days)– Fundamentals of
Construction Estimating
And ASCE – Panama (Panama Canal Authority – 10 days) Const. Estimating
Learning Outcomes for
(Estimating for Heavy Construction
and Unit Price Bids)
 The attendee will be able to:
◦ Discuss how heavy construction estimating is
different from commercial estimating
◦ Describe a unit price bid
◦ Decide when and where the different types of
estimates are used
◦ Illustrate the different parts of the unit price
estimate and describe them
◦ Explain how the different types of cost play a
role in heavy construction estimating
 Session Outline

 Construction organizations (review)

 Construction contracts (review)
 Contract documents
◦ Standard specifications
◦ Standard specifications for DOTs
 Unit prices
◦ Unit bid items
◦ WSDOT Unit bid items
◦ Short in-class exercise
 Quality control / acceptance
 Price adjustments
History of Project Delivery in US

 Legal Separation of Design and

Construction
◦ The Miller Act (1935)
◦ Public contracting laws mandating separation of
design from construction & contractor selection
solely on cost
◦ Professional licensing requirements
 Project Delivery Defined

A comprehensive process including

planning, design, construction and other
services, necessary for organizing,
executing and completing a construction
project.

 Three fundamental owner decisions

◦ Type of project delivery system
◦ Type of procurement method
◦ Type of contract format
 Project Delivery Process
Framework
Project
Project
Performance
Feasibility
Criteria

Facility Critical Contract

Owner’s Owner Format
Profile Decisions Selection
Project
Delivery Procurement
System Method
Selection Selection

Programming Team
& Scope Definition Selection

Confirm Project
Scope and Program

Project Design &

Financing Construction

NOTE: Chart shows logic flow, not

timing or sequence of steps, which Operation &
vary depending on methods used. Maintenance
 Project Delivery
 Always 3 or 4 major parties involved in
the project delivery process
◦ Owner (public or private)
◦ Designer (Engineer or Architect)
◦ Contractor
◦ Construction Management Firm (can also be
one of these parties)
 The Method Selected will:

 Determines the contractual relationships

among the parties.
 Establishes when the parties become
engaged.
 Influences impact of changes and
modifications on project cost.
 Project Delivery Types

 Design-bid-build (Lump Sum or Unit Price)

 Multi-prime (often under CM)
 Construction management-at-risk
 Construction Management agency
 Design-build (DB, EPC, etc.)
 Procurement Defined

Procurement is the
methodology used to buy
design and construction
services.
 Construction Contracts
 Method of pricing  Method of award
◦ Fixed-price ◦ Competitively Bid
 Lump sum contract contracts
 Unit price contract  With designer doing
Project Supervision
◦ Cost-plus  With CM – agency
 Cost plus percentage  CM at Risk
of cost  Design Build
 Cost plus fixed fee
 Cost plus fixed fee ◦ Negotiated contracts
with a targeted  GMP
maximum cost  Design Build
 Cost plus incentive  Negotiated Lump
fee sum
 CM at Risk
◦ Guaranteed Max Price
 GMP plus percentage
of cost
 GMP plus fixed fee
 GMP plus a fixed fee
plus share of savings
- incentive
 Procurement Options

 Sole Source/Direct Selection

 Negotiated procurement
 Competitive
◦ QBS – Qualification Based Selection
◦ BVS - Best Value Selection
◦ Low Bid
Market Penetration of Major
Project Delivery Systems
 Design-Bid-Build Owner

Contractual Relationship

Sub Consultants Designer Contractor

Characteristics  Three linear phases:

Design, bid and build Subcontractors
 Three prime players:
Owner, designer, constructor
 Two separate contracts:
 Owner to designer

 Owner to constructor

Responsibilities
Owner Program, finance, management
Designer Prepares plans & specs, normal
services
Constructor Prime and sub construction
Design-Bid-Build
Advantages

◦ Established way of doing things

◦ Suitable for competitive bidding
◦ A/E directly works for owner
◦ Extensive litigation has resulted in well
established legal precedents
◦ No legal barriers in procurement and licensing
◦ Insurance and bonding are well defined
Design-Bid-Build
Disadvantages
◦ Two contracts for owner to manage
 Disagreements go through owner
 Owner bears design adequacy risk
◦ All parties have different agendas/objectives
◦ Initial low bid might not result in final best
value
◦ Bids over budget presents most difficulties in
reducing costs / creates significant delay
◦ No constructor involvement in design
◦ Slowest project delivery
◦ Most litigious delivery process
Design-Bid-Build
Unique attributes and challenges

 Utilization helps to avoid potential conflicts of

interest
 Provides a check and balance between design
and construction functions
 Owners less familiar with the design and
construction process may benefit from Design-
Bid-Build because it is so well understood
throughout the building industry.
Primary Reasons for Choosing
Design-Bid-Build

 Low first cost is the priority

 Project is simple
 Procurement laws restrict use of anything
else
 Owner wants to control design
 No need for value engineering or
innovation
 Influence vs. Cost
Project delivery selection influences when contractor gets on board.
Contractor on-board early allows best opportunity to achieve objectives

RAPIDLY
MAJOR DECREASING LOW
INFLUENCE INFLUENCE INFLUENCE
Large
High

COST
INFLUENCE

Low Small

Planning & Design Construction & Operations

 Equipment productivity
 Labor productivity
 How material may react differently in
different circumstances
 Locations
 Lower number of subcontractors on job,
higher risk to the General
 Fuel costs
 Soil Conditions (acting different than
expected)

Risk in Heavy Construction

How does Risk change the
Estimate?
 Higher profits
◦ Commercial Profits – 1% to 5%
◦ Heavy Profits – 8% to 15%
 Less return on investments
◦ Large cost of equipment
 Contingencies for potential
escalation costs
Standard Specifications for DOT
(Department of Transporation)
Typically do not use MasterFormat 2004
 Generally use 9 Divisions
◦ General Requirements
◦ Earthwork
◦ Production from Quarry and Pit Sites and
Stockpiling
◦ Bases
◦ Surface Treatments and Pavements
◦ Structures
◦ Drainage Structures, Storm Sewers, Water
Mains, and Conduits
◦ Miscellaneous Construction
◦ Materials
Standard Specifications for most
Commercial / Building Projects
 Typically used today is the MasterFormat 1995
edition, but a new edition has been published
(2004)
 MASTERFORMAT 1995 EDITION
Before November 2004, MasterFormat was composed of 16 primary divisions:

Division 1 — General Requirements

Division 2 — Site Construction
Division 3 — Concrete
Division 4 — Masonry
Division 5 — Metals
Division 6 — Wood and Plastics
Division 7 — Thermal and Moisture Protection
Division 8 — Doors and Windows
Division 9 — Finishes
Division 10 — Specialties
Division 11 — Equipment
Division 12 — Furnishings
Division 13 — Special Construction
Division 14 — Conveying Systems
Division 15 — Mechanical
Division 16 — Electrical
Standard Specifications for most
Commercial / Building Projects
 MASTERFORMAT 2004 EDITION
After November 2004, MasterFormat was composed of 49
primary divisions:
 The current MasterFormat Divisions are:
Division 1 - 49
Divisions
MasterFormat 1995 MasterFormat 2004
Procurement and
Contracting
Requirements Group
Introductory Information 00 Procurement and
Bidding Requirements Contracting Requirements
Contracting Requirements

Specifications Group
General Requirements
Subgroup
1 General Requirements 01 General Requirements
Divisions
MasterFormat 1995 MasterFormat 2004
Facility Construction
Subgroup
2 Site Construction 02 Existing Conditions
3 Concrete 03 Concrete
4 Masonry 04 Masonry
5 Metals 05 Metals
6 Wood and Plastics 06 Wood, Plastics, and Composites

7 Thermal and Moisture 07 Thermal and Moisture

Protection Protection
8 Doors and Windows 08 Openings
Divisions
MasterFormat 1995 MasterFormat 2004
Facility Construction
Subgroup (continued)
9 Finishes 09 Finishes
10 Specialties 10 Specialties
11 Equipment 11 Equipment
12 Furnishings 12 Furnishings
13 Special Construction 13 Special Construction
14 Conveying Systems 14 Conveying Equipment
15 – 19 Reserved
Divisions
MasterFormat 1995 MasterFormat 2004
Facility Services Subgroup

20 Reserved
13 Special Construction 21 Fire Suppression
15 Mechanical 22 Plumbing
15 Mechanical 23 Heating, Ventilating, and Air
Conditioning
24 Reserved
Divisions
MasterFormat 1995 MasterFormat 2004
Facility Services Subgroup
(continued)

13 Special Construction 25 Integrated Automation

16 Electrical 26 Electrical
13 Special Construction 27 Communications
13 Special Construction 28 Electronic Safety and Security
29 Reserved
Divisions
MasterFormat 1995 MasterFormat 2004
Site and Infrastructure
Subgroup
30 Reserved
2 Site Construction 31 Earthwork
2 Site Construction 32 Exterior Improvements
2 Site Construction 33 Utilities
2 Site Construction 34 Transportation
2 Site Construction 35 Waterway and Marine
36-39 Reserved
MasterFormat 2004
 31 00 00 EARTHWORK
 31 10 00 SITE CLEARING
 31 20 00 EARTH MOVING
 31 30 00 EARTHWORK METHODS
 31 40 00 SHORING AND UNDERPINNING
 31 50 00 EXCAVATION SUPPORT AND PROTECTION
 31 60 00 SPECIAL FOUNDATIONS AND LOAD-BEARING
ELEMENTS
 31 70 00 TUNNELING AND MINING
 31 80 00 Reserved
 31 90 00 Reserved

Division 31 - EARTHWORK
Divisions
MasterFormat 1995 MasterFormat 2004
Process Equipment Subgroup
11 Equipment 40 Process Integration
11 Equipment 41 Material Processing and
Handling Equipment
11 Equipment 42 Process Heating, Cooling and
Drying Equipment
11 Equipment 43 Process Gas and Liquid
Handling, Purification and Storage
Equipment
Divisions
MasterFormat 1995 MasterFormat 2004
Process Equipment Subgroup
(continued)
11 Equipment 44 Pollution Control Equipment
11 Equipment 45 Industry-Specific Manufacturing
Equipment
46-47 Reserved
16 Electrical / 13 48 Electrical Power Generation
Special Construction
49 Reserved
 Unit Prices

 Standard Units
◦ Defined in Standard Specifications
 Unit Bid Items / Bid
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-----------------------------------------------------------------------------------------------------------------------------------
ITEM ITEM UNIT OF ESTIMATED
NO. CODE ITEM DESCRIPTION MEASURE QUANTITY BID AMOUNT
-----------------------------------------------------------------------------------------------------------------------------------
1 074016 CONSTRUCTION SITE MANAGEMENT LS 1 10,000.00
10,000.00
2 (S) 074017 WATER POLLUTION CONTROL PROGRAM LS 1 1,000.00
1,000.00
3 074032 TEMPORARY CONC WASHOUT FACILITY EA 1 1,500.00
1,500.00
4 (S) 120090 CONSTRUCTION AREA SIGNS LS 1 3,000.00
3,000.00
5 (S) 120100 TRAFFIC CONTROL SYSTEM LS 1 150,000.00
150,000.00
6 (S) 128650 PORTABLE CHANGEABLE MESSAGE SIGN LS 1 20,000.00
20,000.00
71 50662 REMOVE METAL BEAM GUARD RAILING LF 6,520 6.00
39,120.00
8 150771 REMOVE ASPHALT CONCRETE DIKE LF 840
10.00 8,400.00
9 011868 REMOVE PRECAST CONC POST SUPPORT EA 2 2,500.00
5,000.00
10 (S) 153103 COLD PLANE ASPHALT CONC PAVEMENT SQYD 550 30.00
16,500.00
11 160101 CLEARING AND GRUBBING LS 1 10,000.00
10,000.00
12 190101 ROADWAY EXCAVATION CY 450 125.00
56,250.00
13 193006 STRUCTURE BACKFILL (SLURRY CEMENT) CY 45 250.00
1,250.00
14 260201 CLASS 2 AGGREGATE BASE CY 23 250.00
5,750.00
15 390132 HOT MIX ASPHALT (TYPE A) TON 550 100.00
55,000.00
16 394077 PLACE HOT MIX ASPHALT DIKE (TYPE F) LF 1,410 5.00
7,050.00
17 394090 PLACE HOT MIX ASPHALT (MISC AREA) SQYD 2,380 35.00
03-0E2004 BID245
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R PAGE 7
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--------------------------------------------------------------------------------------------
----------------
ITEM NO. ITEM
UNIT OF
CODE DESCRIPTION
MEASURE
--------------------------------------------------------------------------------------------
----------------
ESTIMATED UNIT
BID
QUANTITY PRICE
AMOUNT
--------------------------------------------------------------------------------------------
----------------
2 (S) 074017 WATER POLLUTION CONTROL
PROGRAM LS 1 $
1,000.00 $ 1,000.00
_______________________________________________________
_____
4 (S) 120090 CONSTRUCTION AREA SIGNS
LS 1 $ 3,000.00
$ 3,000.00
_______________________________________________________
______
5 (S) 120100 TRAFFIC CONTROL SYSTEM
LS 1 $ 150,000.00
$ 150,000.00
___________________________________________________
__________
7 1 50662 REMOVE METAL BEAM GUARD RAILING
UNIT OF ESTIMATED UNIT BID
MEASURE QUANTITY PRICE AMOUNT
------------------------------------------------------------------------------

LS 1 $ 98,000.00 $ 98,000.00

TOTAL $ 980,685.00
Heavy Estimates take on two styles:

 Detail Estimates for Lump Sum

Contracts and Subcontracts
 Unit Price Estimates for DOT and
other Unit Price Contracts

Remember that Heavy/Civil

Contractors may act as
Subcontractors on many projects
A Heavy Civil Detail Estimate
looks much like a Detail Estimate
for a Commercial Project

 Major Differences
◦ Larger labor component
◦ Larger equipment component
◦ Very few Subcontractors
◦ More self performed work
◦ Not as many activities or work items
◦ Work items are often quantified by the
agency for Unit Price Estimates
Structure of a Lump Sum
Estimate and Bid
 Summary Sheet Headings
◦ Description
◦ Labor
◦ Material (often called Permanent Materials)
◦ Consumables / Expendables (often called
Expendable Materials)
◦ Subcontractors
◦ Equipment Operating Costs or Expense
◦ Repair Costs (Labor item)
◦ Rental Costs or Company Equipment Costs
◦ Total
 Typical Lump Sum Bid
Description Labor Materials Expendables Subs Equip Repairs Rent Total
Operating
Costs

Direct
Costs

Jobsite
Indirect
Costs

End of Bid
Items

Total Bid
 Typical Unit Price Bid
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-----------------------------------------------------------------------------------------------------------------------------------
ITEM ITEM UNIT OF ESTIMATED
NO. CODE ITEM DESCRIPTION MEASURE QUANTITY BID AMOUNT
-----------------------------------------------------------------------------------------------------------------------------------
1 074016 CONSTRUCTION SITE MANAGEMENT LS 1 10,000.00 10,000.00
2 (S) 074017 WATER POLLUTION CONTROL PROGRAM LS 1 1,000.00 1,000.00

3 074032 TEMPORARY CONC WASHOUT FACILITY EA 1 1,500.00 1,500.00

4 (S) 120090 CONSTRUCTION AREA SIGNS LS 1 3,000.00 3,000.00
5 (S) 120100 TRAFFIC CONTROL SYSTEM LS 1 150,000.00 150,000.00
6 (S) 128650 PORTABLE CHANGEABLE MESSAGE SIGN LS 1 20,000.00 20,000.00
71 50662 REMOVE METAL BEAM GUARD RAILING LF 6,520 6.00 39,120.00
8 150771 REMOVE ASPHALT CONCRETE DIKE LF 840 10.00 8,400.00
9 011868 REMOVE PRECAST CONC POST SUPPORT EA 2 2,500.00 5,000.00
10 (S) 153103 COLD PLANE ASPHALT CONC PAVEMENT SQYD 550 30.00 16,500.00
11 160101 CLEARING AND GRUBBING LS 1 10,000.00 10,000.00
12 190101 ROADWAY EXCAVATION CY 450 125.00 56,250.00
13 193006 STRUCTURE BACKFILL (SLURRY CEMENT) CY 45 250.00 1,250.00
14 260201 CLASS 2 AGGREGATE BASE CY 23 250.00 5,750.00
15 390132 HOT MIX ASPHALT (TYPE A) TON 550 100.00 55,000.00
16 394077 PLACE HOT MIX ASPHALT DIKE (TYPE F) LF 1,410 5.00 7,050.00
17 394090 PLACE HOT MIX ASPHALT (MISC AREA) SQYD 2,380 35.00 83,300.00
18 (F) 510502 MINOR CONCRETE (MINOR STRUCTURE) CY 4.9 10,000.00 49,000.00
19 011869 PRECAST CONC POST SUPPORT (8 FOOT) EA 24 1,500.00 36,000.00
20 011870 PRECAST CONC POST SUPPORT (6 FOOT) EA 32 1,500.00 48,000.00
21 (SF) 750001 MISCELLANEOUS IRON AND STEEL LB 916 5.00 4,580.00
22 820108 DELINEATOR (CLASS 2) EA 69 40.00 2,760.00
23 820151 OBJECT MARKER (TYPE L-1) EA 4 50.00 200.00
24 (S) 832002 METAL BEAM GUARD RAILING (STEEL) LF 6,690 27.50 183,975.00
25 832008 METAL BEAM GUARD RAILING (ELEMENT) LF 10 20.00 8,200.00
26 (S) 839541 TRANSITION RAILING (TYPE WB) EA 10 5,000.00 50,000.00
27 (S) 839552 TERMINAL SECTION (TYPE C) EA 5 150.00 750.00
28 (S) 839581 END ANCHOR ASSEMBLY (TYPE SFT) EA 5 1,000.00 5,000.00
29 (S) 839585 ALTERNATIVE FLARED TERMINAL SYSTEM EA 3 3,000.00 9,000.00
30 (S) 840656 PAINT TRAFFIC STRIPE (2-COAT) LF 350 6.00 2,100.00
31 999990 MOBILIZATION LS 1 98,000.00 98,000.00
TOTAL 980,685.00
Typical Lump Sum Bid
Typical Unit
Price Bid
 In-directs are totaled
 Each big item is calculated as a
percentage of the total direct costs
 Using this percentage, we multiply the
total direct costs by each percentage
 That number is than added to the base
direct cost to come up with a total.
 It is divided by the quantity to generate a
unit price

Major Difference: Distribution of

Indirect Cost into Unit Prices
 First the In-directs and end of bid items
are totaled.
 A total of direct costs is also established
with a total
 A column of each bid item direct cost is
made into a % of the total direct costs.
 This % is then multiplied by the total
indirect cost
 This % of the indirect costs is than added
to the direct costs

How do we do this Distribution of In-

directs?
Item No. Description
390132 HOT MIX ASPHALT (TYPE A)

Unit Quantity Unit Price Total

TON 550 $ 100.00 $ 55,000.00

The Result is:

Example of Bid Item
 Specification are reviewed for the
Item No., what is included in each
work items and how the item will be
paid for.
The Pay Quantity vs. Bid
Quantity
 Bid quantity -
◦ Defined as a quantity of individual units of
work that represents the owner’s engineer’s
estimate of the number of units of that type
work included in the contract.
 Pay quantity -
◦ Defined as the quantity that is calculated
when the work is completed and will be paid
for by the owner
 Is also defined as the quantity of
projected work at time of bid
 Is the calculated quantity by the
contractor when checking engineer’s
quantity
 May or may not equal the engineer’s
quantity

Work quantity
 Relationship of the work
quantity to the Bid Item

 It is generally thought by the engineer to

be equal.
 This is not always true as many
contractors have found out – sometimes
by surprise
 When bidding a lump sum, the quantities are
not given and certified by the owner. The
contractor is responsible for quantity
determination. The owner will pay the lump
sum bid amount plus any changes.

 When bidding a unit price contract, the engineer

is giving the contractor the quantities and will
pay the contractor the in-place quantities.
Provisions are made when quantities get
substantially out of balance.

Indirect Cost : Lump Sum vs. Unit

Price
 Major Differences are:
◦ Mobilization costs and items are substantially
different. Plant and equipment of large heavy
projects.
◦ Temporary access / roads etc. can be very
different
◦ Temporary power on a commercial project is
much different.
◦ Surveying requirements can be much different
from commercial to heavy construction.

Indirect Costs from Commercial

compared to Heavy
 To protect out of pocket expenses
because of inaccurate bid quantities
 To favor work performed early in the
schedule to create positive cash flows
on project
 Other strategies

Is there any Strategy to Distribution

of Indirect Project Costs?
 Unbalancing the Bid

 What words should we be watchful in

bidding documents?
◦ “grossly unbalanced”
◦ “substantially unbalanced”
 First on a Balanced Bid
◦ Most DOT specifications allow for change if
quantities are grossly inaccurate. If there is no
provision, the contractor could have the wrong
equipment, too much equipment etc.

 Next on an Unbalanced Bid

◦ Contractor plays the risk of being determined as
non responsive and bid being rejected.
◦ Owner could be paying a premium on the work.

What Happens if there are Inaccurate

Bid Quantities?
 What Happens if there are
Inaccurate Bid Quantities on
a Balanced Bid?

Most DOT specifications allow for change if

quantities are grossly inaccurate. If there is
no provision, the contractor could have the
wrong equipment, too much equipment, etc.
 What Happens if there are
Inaccurate Bid Quantities on
a Unbalanced Bid?

Contractor plays the risk of being determined

as non responsive and bid being rejected.
Owner could be paying a premium on the
work.
 Rejection Can be the
Consequences of Unbalanced
Bid.

Owner will use the term:

Non-responsive
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03-SIE-49-2 S U M M A R Y O F R E M A I N I N G B I D D E R S PAGE
9

How can an
04/23/08 04/27/08
|------------------------------ |-------------------------------
ITEM| SIXTH | SEVENTH

Owner tell
| BID AMOUNT | BID AMOUNT
|------------------------------ |-------------------------------
1 | 8,000.00 8000.00 | 650.00 650.00

or why
2 | 1,500.00 1500.00 735.00 735.00
3 | 2,000.00 2000.00 | 2,300.00 2300.00
4 | 3,200.00 3200.00 | 1,540.00 1540.00
5 | 146,000.00 146000.00
6 | 12,500.00 12500.00
7 | 10.00 65200.00
| 112,777.24
| 4,800.00
| 6.80
would they
112777.24
4800.00
44336.00
8 | 11.00
9 | 2,000.00
10 | 18.00
9240.00
4000.00
9900.00
| 21.00
| 480.00
| 15.70
17640.00
960.00
8635.00
even
11 | 10,000.00 10000.00
12 | 65.00
13 | 340.00
29250.00
15300.00
| 15,124.00
| 556.80
| 5,346.66
question
15124.00
250560.00
240599.70
14 | 240.00
15 | 130.00
5520.00
71500.00
| 401.99
| 127.73
9245.77
70251.50 the
Contractor’
16 | 4.50 6345.00 | 2.35 3313.50
17 | 35.00 83300.00 | 30.03 71471.40
18 | 4,800.00 23520.00 | 1,885.70 9239.93

s Unit
19 | 2,200.00 52800.00 | 3,450.00 82800.00
20 | 2,000.00 64000.00 | 3,400.00 108800.00
21 | 5.00 4580.00 | 8.20 7511.20

Prices?
22 | 50.00 3450.00 | 42.00 2898.00
23 | 50.00 200.00 | 41.80 167.20
24 | 30.00 200700.00 | 29.24 195615.60
25 | 35.00 14350.00 | 43.50 17835.00
26 | 6,600.00 66000.00 | 3,600.00 36000.00
27 | 120.00 600.00 | 98.00 490.00
28 | 1,250.00 6250.00 | 624.00 3120.00
29 | 3,000.00 9000.00 | 2,800.00 8400.00
30 | 11.00 3850.00 | 6.72 2352.00
31 | 100,000.00 100000.00 | 157,316.00 157316.00
TOT 1,032,055.00 1,487,484.04
 Other Bid # 3 Other Bid # 5

8 150771 REMOVE ASPHALT CONCRETE DIKE LF 840

Item Unit Unit
No. Price Total Price Total
8 11.00 9240.00 21.00 17640.00

Possible Example
 Remember earlier we spread our indirects and end of
bid items over our direct cost items.
 We did that based on each cost items value and gave
each item a piece of the indirect costs based on that
value. More costly items got more of the indirect cost.
 Instead of doing a percentage of each direct cost item,
one could allocate any amount of the indirect costs to
that bid items.
 We could even go so far as moving direct costs onto
another direct cost in increase its total, keeping in
mind that we would want to keep the total the same
as a balance bid.
Example of Unbalancing:
Fixed Costs, In-directs, etc.
Flow chart of the Heavy Bid Process

Quantities are checked against the Engineers

End of bid item distributed to Bid items

Unit Price Estimates and The Bid Process

Selection\Decision & Review Phase

Review the Plans
Select Project
Specs. & Contract

 Does work fit with-in the company business

plan?
 Does the company have the bonding capacity to handle
the work?
 Probability of making a profit?
 Is it the type of work the company and its individuals can
succeed at?
 Does my company have the right plant and equipment?
Preparation for Pricing
Subcontractor
Determinations Estimator determines the scope of work
that will be subcontracted. This is a
much smaller group of subcontractors.

Begin Takeoff
Estimator begins takeoff of quantities of
for Self Work
work this contractor will do with their own
forces. They will review the
specifications for what to include in both
the pay quantities and work quantities.
Request for
Material Quotes Estimator determines the scope of
materials and sends out for quotes.
Heavy contractors often control their own
materials. i.e. rock, asphalt, concrete

Site Visit
Estimator schedules a site visit
(Mandatory vs. Voluntary).
Preparation for Pricing Continued:

Request for
Sub bids

Job Plan & General Conditions

Preliminary and Indirect Job
Scheduling Cost Determination

Much more time it spent

On the job plan and scheduling
Historical labor &
Because of the plant and
Material Cost Equipment requirements
Records Reviewed
 Analysis and Pricing

Budgeting for Sub trades Subcontract Bid Tab.

Labor Pricing

Material Pricing

Plant and
Equipment Pricing

Indirect Job Cost Pricing

Cost Extensions & Finalizing the Estimate

Estimate Summary

End of Bid Items Distribution of

(Profit & Over- End of Bid Items
head) To the Bid Items
 Finalizing the Estimate

Bid or
Adjustment to Award of
Proposal
Bid or Proposal Project
Submission

Owner’s Final Review & Log

Review for Historical
 Can be very similar to commercial process
when bidding a lump sum.
 But is very different when bidding a unit
price type of contract
 Materials can play a major role in the bid
process
 Plant and equipment are a big portion of
the work

Heavy Bid Process

 The use of digitizers is used more that in
commercial because of the speed of
earthwork takeoff process.
 Also almost all heavy estimating is done
with computers because of the need to
distribute the indirect costs in unit price
estimates.

Heavy Bid Estimating

 Summary
 Heavy Civil can be either Lump
Sum or Unit Price.
 The Heavy Civil world also does
negotiated work.
 More risk is associated with Heavy
Construction work vs. Commercial
work.
◦ Equipment productivity
◦ Labor productivity
End of Today’s Session

Questions?