The Main Contractors Estimators Action On Receipt Construction Essay

The Main Contractors Estimators Action On Receipt Construction endeavor1. Introduction1.1 Structure of sub- receiveingThe Hong Kong Construction Industry be made up of chief(prenominal)ly three layers though the process of sensitiveing, which include the rude(a)ing from developers to of import decl atomic number 18rs and the sub-contracting master(prenominal) contractors to sub-contractors. In the answer for, sub-contracting go forth be further discussed.In the process of sub-contracting, the calculator of primary(prenominal) contractors breaks pig the whole bring ind work into confuse tasks. For instance, breaks down a building construction work into basement, substructure, bamboo scaffolding, superstructure and finishes. The computing device depart at that placefore undergo tendering process and sub-contract these various works to favourable tenderers.In addition, honorable mention is a archive plays a role in the tendering process. It is a equipment casual tyd document which derived from tender that main contractor released and layabout be regarded as a reduced size of scathed Bills of Quantity that tenders submit to the main contractor. Since credit entry contains financial terms and which can resultant role in several companies interest, it has to be kept highly confidential to repress collusion or unequal slip to happen.1.2 Role of cost figurerTo clarify, it is to discuss the role of main contractors be information processing system in this report. First of every(prenominal)(a), the estimator is non merely one(a) person but a team with, for example, quantity surveyor, make manager, contract manager and planning engineer. The roles of scathe estimator before divide of visit atomic number 18 to estimate the cost of construction works, prepargon initial budget, footing the Bills of Quantity and arrange for man power, solids supply and sows for proposed pick up. later the award of suggest, the cost estimator lead break down the works as describe in a higher place, prepargon sub-contacting schedule which stated the quantify to finish tendering of specific tasks and deadline of initiation of unalike work, and prep atomic number 18 the tender document with self estimated budget not enclosed. After the receipt of quotation, the cost estimator will appoint to sub-contract to the roughly suitable tenderer with equal basis.Besides, there is different role that is significant to cost estimator. They ar to balance the step and outlay for selection of sub-contractors, materials and plant, keep each(prenominal) the monetary enlarge highly confidential even within the comp any(prenominal) and do not receipt of any kind of interest to turn a charge collusion which keep the tendering process undergoing in equal basis.1.3 Sub-contracting part after on receipt of quotationThe planetary sub-contracting procedure can be illustrated by figure 1.3. After the preparation of the quotation d ocuments and the sub-contractor keep down for open invitation of quotation, a need for quotation will be issued to the sub-contractors on the list. Interested sub-contractors will prep ar their quotations and submit them by depositing to the bid box before the deadline organise in the quotation documents.Upon the deadline for submission, a number of quotations would be received from different sub-contractors. The main contractors estimator is thus started to assess and evaluate those quotations being received. The study actions of the estimator after receipt of quotation include checking of the quotations for their obligingness, errors and readjustments as rise as selection of the preferred quotation by theatrical role/ outlay mechanism. A quotation report will also be nimble afterward. If the main contractor in conclusion gets the tender from the client (i.e. the developer), performance paygrade may be conducted by the estimating team for future works.-1.png look-alik e 1.3 Sub-contracting procedure after receipt of quotations2. Checking of the quotations (with Appendix 1)Upon receipt of quotations from the sub-contractors, the date should be entered on the enquiry record. Basic information of the sub-contractors should be checked and the database is to be updated wheresoever necessary. To avoid any erroneous price submitted, the estimator of the main contractor then has the responsibility to read, check and verify the quotations for the followingWhether the quotations are in line with requirements set out in the enquiresWhether the costs are consistentIf there are any errorsIf the prices grantd by the sub-contractor are reasonableHow are the prices when they are equalized with the market prices.2.1 Checking of compliancy with requirementsAfter the quotations are received from the sub-contractors, the main contractors estimator has to make an in depth examination on the quotations in order to assure that they are made in accordance with the enquires requirements and no option offer have been submitted. Any breakdowns of price should always be checked while the evaluate are being entered into a computerized estimating placement to ensure they are correct. The quotations should also be checked against the terms and conditions (Fig.2.1.a) and suffice of the enquires (Fig.2.1.b) for any arithmetic errors, missing point in times, reality and consistency of order, tender qualification, robustness period of tender, and signatures properly provided.2.1.1 Quotations from Material SuppliersThe quotations for material supply should be save on a Materials Comparison Form (Fig.2.1.1.a) and in accordance with the enquires provided by the main contractor or the clients. The rates are entered during the pricing stage, and any divergence spy from the provided enquires are to be recorded for later assessment.The estimator should check for the followingsThe materials adopted comply with that stated in specificationThe quantities of materials are decent to meet the required amount as stated in the enquiresThe methods of delivering, unloading and handling of the materials comply with that required by the main contractor, limited conditions for ordering and payment, and the suppliers with the most competitive prices should be contacted to ensure that they had noted wholly the relevant restrictions on delivery to siteThe delivery dates meet with those required, other than additional enquires to maintain a full enquiry list may need to be sentThe intended on-site or off-site storage of the materials and settlement of paymentThe conditions stated in the quotations is as equivalent as the terms and conditions stated in the enquires and the quotations are not alternate(a) offers.2.1.2 Quotations from Plant SuppliersThe quotations for plant supply should be recorded and on a Plant Quotations immortalise (Fig.2.1.2.a). Wherever a performance specification for the habitude of the plants is given, the quotation s should be checked cautiously to make sure that all the plants provided achieve the enquires requirements.The estimator should check for the followingsThe plants are sufficient to meet the needs of the construction programmeThe wages for plant operators are includedThe working hours of plant operators comply with the intended site working hoursThe responsibilities and charges for maintenance are distinctly identified.2.1.3 Quotations from Labour-Only Sub-ContractorsThe quotations for labour party should be recorded on a Domestic Sub-contractors Register (Fig.2.1.3.a) which is used as a form for sub-contract comparison. Any divergence from the enquires discovered should also be recorded for later assessment and unit rates pricing when selecting quotations.The estimator should check for the followingsThe conditions stated in the quotations is as equal as the terms and conditions stated in the enquires and the quotations are not alternative offersThe discounts comply with the enqu ires requirementsThe payment basis of the labourThe ambiguities concerning the responsibilities for protections, storage, clearing up, unloading are resolvedThe supporting information including the schedules of rates and the programme information are given.2.2 Checking of errors and adjustmentsThe main contractors estimator should check whether the quotations are basing on complete and absolute information.2.2.1 Domestic Sub-contractorsThe main contractors estimator should ensure that all the items for a e particular(prenominal)(a) trade are priced properly, and should request the sub-contractors for any missing rates. The rates provided should be checked for consistency with the bill of quantities, and they should be realistic although the cost will vary waiting on the quantities, location and timing. The main contractors estimator could withdraw or change an offer and report to the client if any obvious errors are detected or the tender document is found to be altered.The estim ator may apply a piece or add a lump sum to certain rates in causal agents where regards are taken for the followingWork of specific builders which is not careful somewhere else is needCertain attendances are needed to be included in the measured ratesSpecific trades requirement provided by the contractorMargin for over-heads and put on are to be included in the measured rates so the estimator could spread the over-heads to works which seems to be under-measured.2.2.2 Nominated Sub-contractorsNominated subcontractors are subcontractors required by the client to enter a contract for effect of work or the supply of things designated as Prime Cost of PC items. The main contractors estimator should ensure that the PC sum is included in the bill calculations and a percentage for profit is added to the PC sum wherever necessary.2.2.2.1 General and Special AttendancesThe main-contractors estimator should also access the costs for general and special attendances. The costs for gener al attendances are normally provided in the paygrade of project over-heads for logistical requirements while the special attendances are to be priced one at a time in the measured bills of quantities and the estimator may price the work if those attendances are properly described.Figure 2.2.2.1.a shows different types of attendances to be provided to the sub-contractor by the main contractor. These attendances should be priced in project over-heads and the amount required should depend on the sub-contractor. Therefore, the main contractors estimator should adjust the amount of lump sum or added percentage to different types of sub-contractors carefully.2.3 Comparing of Prices2.3.1 Comparing with Market PricesThe main contractors estimator should analyse the quotations provided by the sub-contractors with the market prices.2.3.1.1 Variations in unit ratesWhile examine the prices, the estimator should also consider factors which may affect the rates of materials, plants, and labou r. The rates for materials may depend on the suppliers locations, the sizes of the materials, the delivery costs, and whether alternative materials are to be adopted should also be considered. The rates for plants could be affected by the prices for erecting and dismantling, maintenance, and insurance of the plants in the construction sites. As for the rates for labour, they depend very much on whether skilled labour is available in the area or extra payment for labour with special skills are needed, the location at which jobs are to be carried out should also be taken into consideration.2.3.2 Comparing with other quotationsThe main contractors estimator should carefully compare apiece quotation submitted by all the sub-contractors. A spreadsheet such as the Sub-contract Comparison Sheet (Fig.2.3.2.a) may be used for comparing as it facilitates listing, rates comparing as well as mathematical checking.3. endurance of the quotation (with Appendix 2)Price3.1 General criteria calibe rTimeIn most of the case (i.e. bar in case of nominated sub-contractor), there is still a long-list of sub-contractors, who submissive with the requirements, remain after checking the quotations with the enquiries. In order to identify the preferred sub-contractor(s), hence, a short-listing with several criteria should be processed. The most significant factor is price, while other criteria include experience and qualifications, financial and resources standing, reputation and counsel scheme.3.1.1 PriceThe quoted price in the quotation constitutes substantial effect on the decision fashioning of the cost estimator. With a get cost to hire a sub-contractor, the main contractor can turn out give a lower bid in the tender to the developer and therefore, increase the opportunity of getting the project.3.1.2 bugger off and qualificationsAn experienced and qualified sub-contractor on the type of work of the project manner it can finish the work in a more potent way compares with those without (i.e. the completion time may be shortened receivable to its experience on the trade). In the case of specialized works such as demolition work and foundation work, experience is even more important. The cost estimator can evaluate the sub-contractors past performance with the come with or refer to different Registers1and professional bodies for determination its competence on the work.3.1.3 Financial and resources standingFinancial standing of the sub-contractor is an important factor since myopic working capital of the sub-contractor may hinder the working progress and extend the completion time. In addition, the cost estimator needs to ensure the sub-contractor is having sufficient resources (i.e. man power, material, plant, etc.) to deal with the work, especially in the case of supplier. By study into the liquidity, credibility and adequacy of resources of the sub-contractor, the cost estimator can so avoid delay of the entire construction of the project to m inimize loss to the client.3.1.4 constitution and trouble bodyReputation of a sub-contractor is generated when it provided whole step services in the field. By investigating the past performance (i.e. workmanship, time management, worker and material quality, etc.) of the sub-contractor, the cost estimator can reasonably select sub-contractor(s) who can provide up-to-standard work. The management system should also contribute to the decision of the cost estimator, as proper management can generate synergy effect to the labour performance.3.2 Establishment of the quality/price mechanismThe major concern for the main contractors estimators to select an appropriate quotation is to have a quotation of two low price and good quality. Hence, in order to maintain a good balance among quality and price, a quality / price mechanism should be established to facilitate the process.3.2.1 Formulation of the quality / price ratioThe quality / price ratio should be formulated at the first st age. The ratio can depend on the complexity of the work, the slay of innovation and the flexibility. For instance, straightforward projects should be less complicated and less innovative. Therefore, the price factor should be given a higher weight. Thus, the quality / price ratio of 20/80 could be considered. Similar approach can be adopted for complex and repeat projects to obtain the ratio. Fig. 3.1 shows the relationship between quality and price for different kinds of projects.3.2.2 Weighting of the quality criteriaDifferent quality criteria should be plodding according to their importance to the project. Basically, there are foursome major criteria. They include the practice of the company, the project governing, the key project force play and the project execution.Practice of the company comprises the organization structure, financial stability, quality assurance, resources, management systems, relevant experience of the company and etc.Project organization refers to the organization of the proposed project team and the authority level of team members.Key project personnel includes the qualifications, communication skills and enthusiasm of the team members and the extent they understand the project brief.Project execution refers to the programme, method and approach, as well as the management and control procedures of the project.To weight the criteria, it is suggested that the key project personnel can take around 30 to 40% of the total weight, 20 to 30% each for the practice of the company and the project execution, 15-25% for the project organisation.3.2.3 Establishment of the marking (scoring) systemAfter the quality / price ratio is formulated and the quality criteria is weighted at the first and second step, a quality threshold should be introduced to the marking system. It is the minimum marks that must be scored by the short-listed sub-contractors in the quality assessment so as to allow further consideration of the quotations. An assessment sheet can then be prepared for concomitant assessments of the quotations. In the assessment sheet, both the quality and price piles will be given and an overall score will be added. An unemployed assessment sheet is shown as Fig. 3.2.3.3 Assessment of the quotationsAfter returning the quotations from various sub-contractors, the main-contractors estimators can start to do the assessment on the quality and price.3.3.1 Quality assessmentMarks should be scored according to the quality criteria (i.e. practice of the company, project organization, key project personnel and project execution) and the weighting and marking system set down previously. If the scored mark of a quotation is below the targeted quality threshold, the quotation should not be further considered and should be discarded. However, if it is the situation that all the submitted quotations are below the threshold and there is a common distress of a specific criterion, then the estimators may re-assess the requireme nt to see if there is a need of amending it.3.3.2 Price assessmentPrice assessment should be considered only if a quotation has passed the quality assessment. It is done in the way that the quotation with the lowest quoted price is considered to score 100 marks in this section. While for other quotations having a higher quoted price, their scored marks will be deducted with a proportional percentage. However, for particular quotations having an extraordinarily low price, they should be reviewed in order to ensure full compliance of the requirements.Finally, the quality and price pull ahead should be totalled and the assessment sheet should be dated and signed for later auditing purposes. Fig. 3.3 shows an example of a completed assessment sheet.3.3.3 Final assessmentAfter all the qualified and assessed quotations have been obtained, their overall scores can be compared with an assessment comparison sheet. The sub-contractor with the highest overall score will eventually win the bid . Fig. 3.4 shows an example of a completed comparison sheet. It is seen that the assessments of different firms (i.e. firm A, B, C and D) have been done and the overall scores have been calculated onto the uniform sheet. Since firm A has got the highest overall score among the competitors, its quotation will be considered by the main contractor.4. Quotation reportA quotation report is used to summarize all the necessary information and evaluation result of the assessment, and as a reference for the cost estimator to refer to if finally sub-contractor is needed to be awarded.The quotation evaluation report should include the followingsThe sub-contractor list established at the beginningA summary of the quotations received and clearThe results of the checking and selection of the quotationsThe evaluated price of each quotation, showing any corrections, errors or adjustmentsThe scores and rankings of the quotations, according to the assessmentRecommendation to award the contract5. A ctions after tender is awarded by the developerIf the main contractor finally gets the tender from the developer, there are still several actions that the main contractors estimator needs to do. Firstly, notification to the wined sub-contractor (i.e. the highest scorer in the final assessment) to ensure the selected team is still available. Once the award is made, advisement to all other discarded sub-contractors in writing should be processed.Secondly, the estimating team should evaluate the performance of both the selected sub-contractor(s) and the quality/price mechanism. evaluation to selected sub-contractor can be by the way of inspection during work or after completion. The results may be used in selection of sub-contractor in future works as mentioned in Part 3. Besides, the evaluation of the rightness of the quality and price ratio and the weighting system can used to adjust the mechanism and improve its operation in future works.6. completionIn conclusion, the main cont ractors estimators actions on receipt of quotations from their sub-contractors are first checking for their compliancy with the quotation documents, and sorting out any errors and adjustments. Secondly, the estimator needs to select the preferred sub-contractor(s) by considering their quoted price, experience, financial and resources standing, reputation, etc with the quality/price mechanism.Thirdly, a quotation report will be prepared afterward. And if the main contractor finally gets the tender from the client (i.e. the developer), performance evaluation may be conducted.The above actions and procedures conducted by the cost estimator can be further illustrated by the case study in the next part.7. Case studyThe case is from the main contractor Chun Wo Constrcution and Engineering Limited, of project Tuen Mun Western Trunk sewer (DC/2009/11). The cost estimator proposed to sub-contract the installation works of temporary water and electrical energy of site offices and underwent the following procedure.In the first stage preparation of documents, the estimator prepared the description of required work. Simply, it includes the description and details of proposed installation works. They then decided the adaptation of selective tendering rather than open tendering as time was limited and selected two contractors in the sub-contractor list. They are Wing Wo and Sky. Lastly, they prepared the tender document of the work, which contains common items to all tender documents, including general conditions of contract, standard conditions of sub-contract, special condition of contract, general specification and standard methods of measurement, and specific item details such as particular specification, particular preamble, schedule of rates and drawings. Figure 7a is the tender document list of the work. After prepared the tender document, they issued request of quotation to the two contractors.In the second stage the selection of sub-contractor, the estimator rec eived the quotations by bid box and checked with the compliance, errors, adjustment and price as described in previous section. They selected the criteria for the work as quality to price ratio, experience and reputation. After the comparison of those criteria, they recommended Wing Wo as the sub-contractor since it had cleanse quality to price ratio and experienced. Figure 7b is the tender report for comparison. Since the score of Wing Wo was the highest, its director was invited to have further negotiation to assure all details were known and the same in two parties, and price adjustment had done at that moment. Finally, estimator prepared sub-contract for the work in which an item concerning wage payment was added, and signed with the director and project manager.Figure 7a dictation list Figure 7b Tender report