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Flashcards in 10. Further Issues in Estimating Deck (2)
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What should the report of the contractor's estimates contain?

>Project description;
>General method statements;
>An indication of risks within the project that may not be adequately covered by items contained in the bill of quantities;
>Contractual issues that may remain unresolved;
>The financial consequences of the design process – i.e. are their areas that may present technical risks or are there areas that have been poorly designed (remember the contractor may have more expertise than the designer on some matters;
>Notes of the major assumptions made in the preparation of the direct cost estimates (such as assumptions made in preparing operational rate build ups);
>An indication of its profitability;
>Market and industrial conditions that may be pertinent to the project (for example, an upswing in certain sectors of the construction industry may push up prices greater than inflation;
>Direct costs, broken down into resource areas, including subcontractors;
>The Bill of Quantities with direct costs.


What is the purpose of senor management 'marking-up' or 'uplifting' rates?

>Risk for individual areas or the project as a whole if it is considered the probability of losing money is considered intolerable;
>Overheads to cover both central head office costs and site costs;
>Profit which will depend on the prevailing market conditions.