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1

are prepared throughout the planning, design,
and construction phases of a construction
project

COST ESTIMATES

2

is a major factor in most decisions regarding
construction,

COST

3

TYPES OF CONTRACTS

OF CONTRACT
1. Unit Price
3. Cost Plus
2. Lump Sum
4. Target Cost

4

 Factors favoring the use of a specific contract

- Providing incentive for efficient performance
-Introducing changes during construction
-Allocation of risk between owner & contractor

5

The contractor set a price for each item; the owner
doesn’t know the details of each item pricing

UNIT PRICE (Admeasurements Contract)

6

can be used when little or no changes are
expected, level of risk is low and quantifiable

UNIT PRICE (Admeasurements Contract)

7

A single tendered price is given for the completion
of specified work

LUMP SUM

8

- Payment may be staged at intervals on the
completion

LUMP SUM

9

This contract may be used for a turnkey
construction

LUMP SUM

10

The contractor is reimbursed for actual cost plus a
special fee for head office overheads and profit

COST PLUS/ COST-REIMBURSIBLE CONTRACT

11

The fee may be a fixed amount or a percentage of
actual costs

COST PLUS/ COST-REIMBURSIBLE CONTRACT

12

May be used when the client wishes to be involved
in contract management

TARGET COST CONTRACT

13

- is the compilation of all the costs of
the elements of a project within an agreed upon
project scope.

ESTIMATING

14

 It is the production of a statement of the
approximate quantity of materials, time and costs
to perform construction decisions

ESTIMATING

15

is to produce an
accurate, cost effective prediction of what a project
will most likely cost and it needs to be done in
different manners at different stages

objective of cost estimate

16

the degree of approximation is even greater
because of the difficulty in predicting all the
probabilities of items such as labor productivity and site
conditions

Pricing

17

Two activities are involved when carrying out an
estimate:

Measurement and Pricing

18

There are two distinct tasks in estimating: (Purpose)

To determine the probable real cost of the project
 To determine the probable real time to build the
project

19

The person who prepares estimates in the planning,
design, and perhaps construction stages

ESTIMATOR / QUANTITY SURVEYOR

20

He or she must also be knowledgeable of the
expected life of construction materials, accounting,
taxation, law, economics, and awareness of
engineering design

ESTIMATOR / QUANTITY SURVEYOR

21

The following factors affect the accuracy of cost
estimates:

1. Site, location and accessibility
2. Subsurface and soil conditions
3. Time and season
4. Climatic conditions
5. Wage agreements
6. Market prices of basic materials
7. The demand for construction

22

_____ should have a thorough knowledge of
building trades and types of construction and
methods of construction

 Estimator

23

The costs that spent on a specific activity or project can
be classified as:

Fixed cost
Time-related cost
Quantity-proportional cost
Project direct costs
Project indirect costs

24

 The principal components of a contractor's costs
and expenses result from the use of______________________________

labors,
materials, equipment, and subcontractors

25

Additional general overhead cost components
include

taxes, premiums on bonds and insurance,
and interest on loans.

26

costs that spent once at specific point of time

Fixed cost:

27

costs spent along the activity duration
(e.g., labor wages, equipment rental costs, etc.)

Time-related cost:

28

costs changes with the quantities
(e.g., material cost)

Quantity-proportional cost:

29

These costs are estimates based on detailed analysis
of contract activities, the site conditions, resources
productivity data, and the method of construction
being used for each activity

Project Direct Costs

30

Indirect costs comprises

project (site)overheads and general (head-office)
overheads