The Main Contractors Estimators Action On Receipt Construction Essay

The Main Contractors Estimators Action On Receipt Construction Essay1. Introduction1.1 Structure of sub-contractingThe Hong Kong Construction Industry atomic number 18 made up of principal(prenominal)ly three layers though the cognitive process of bare-asseding, which include the tendering from developers to briny contractile organs and the sub-contracting main asseverators to sub- asserters. In the field, sub-contracting will be further discussed.In the process of sub-contracting, the reckoner of main contractors breaks down the whole construction wrick into various tasks. For instance, breaks down a building construction work into basement, substructure, bamboo scaffolding, superstructure and finishes. The computing device will then undergo tendering process and sub-contract these various works to favourable tenderers.In addition, point of pointence is a document plays a social function in the tendering process. It is a setd document which derived from tender that mai n contractor released and stooge be regarded as a reduced size of damaged Bills of Quantity that tenders submit to the main contractor. Since honorable mention contains monetary terms and which potful result in several companies interest, it has to be kept highly confidential to avoid collusion or unequal situation to happen.1.2 Role of cost figurerTo clarify, it is to discuss the role of main contractors cost estimator in this report. First of all, the estimator is not merely one person but a team with, for example, quantity surveyor, bedevil manager, contract manager and planning engineer. The roles of cost estimator before award of project are to estimate the cost of construction works, bring up initial budget, worth the Bills of Quantity and arrange for man power, materials supply and make ups for proposed project.After the award of project, the cost estimator will break down the works as described above, prepare sub-contacting schedule which say the time to finish te ndering of specific tasks and deadline of commencement of antithetic work, and prepare the tender document with self estimated budget not enclosed. After the recognize of quotation, the cost estimator will select to sub-contract to the most suitable tenderer with equal basis.Besides, there is other role that is significant to cost estimator. They are to balance the note and price for selection of sub-contractors, materials and plant, keep all the monetary details highly confidential even within the comp all and do not receipt of any kind of interest to avoid collusion which keep the tendering process undergoing in equal basis.1.3 Sub-contracting procedure after receipt of quotationThe planetary sub-contracting procedure can be illustrated by figure 1.3. After the preparation of the quotation documents and the sub-contractor list for open invitation of quotation, a request for quotation will be issued to the sub-contractors on the list. elicit sub-contractors will prepare their quotations and submit them by depositing to the bid box before the deadline set in the quotation documents.Upon the deadline for submission, a number of quotations would be authorized from different sub-contractors. The main contractors estimator is then started to assess and evaluate those quotations being received. The major actions of the estimator after receipt of quotation include checking of the quotations for their compliancy, errors and adjustments as well as selection of the preferred quotation by fictitious character/price mechanism. A quotation report will also be prepared afterward. If the main contractor utmostly gets the tender from the client (i.e. the developer), executing evaluation may be conducted by the estimating team for future works.-1.pngFigure 1.3 Sub-contracting procedure after receipt of quotations2. Checking of the quotations (with vermiform appendix 1)Upon receipt of quotations from the sub-contractors, the date should be entered on the enquiry rec ord. Basic information of the sub-contractors should be canvas and the database is to be updated wherever 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 cost are consistentIf there are any errorsIf the prices provided by the sub-contractor are reasonableHow are the prices when they are compared 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 ensnare to assure that they are made in accordance with the enquires requirements and no alternative offer have been submitted. Any breakdowns of price should always be checked while the grade are being entered into a computerized estimating dust to interpret they a re correct. The quotations should also be checked against the terms and conditions (Fig.2.1.a) and content of the enquires (Fig.2.1.b) for any arithmetic errors, missing items, reality and consistency of judge, tender qualification, validity period of tender, and signatures justly provided.2.1.1 Quotations from Material SuppliersThe quotations for material supply should be recorded 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 judge are entered during the pricing stage, and any divergence discovered from the provided enquires are to be recorded for later perspicacity.The estimator should check for the followingsThe materials adopted comply with that stated in specificationThe quantities of materials are sufficient to seemly the unavoidable amount as stated in the enquiresThe methods of delivering, unloading and handling of the materials comply with that required by the main contractor, speci al conditions for ordering and payment, and the suppliers with the most competitive prices should be contacted to ensure that they had noted all the relevant restrictions on delivery to siteThe delivery dates meet with those required, otherwise 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 same as the terms and conditions stated in the enquires and the quotations are not alternative offers.2.1.2 Quotations from constitute SuppliersThe quotations for plant supply should be recorded and on a Plant Quotations Register (Fig.2.1.2.a). Wherever a performance specification for the usage of the plants is given, the quotations should be checked cautiously to make sure that all the plants provided accomplish 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 includeThe on the job(p) hours of plant operators comply with the intended site working hoursThe responsibilities and charges for maintenance are clearly identified.2.1.3 Quotations from Labour-Only Sub-ContractorsThe quotations for labour should be recorded on a Domestic Sub-contractors Register (Fig.2.1.3.a) which is employ as a form for sub-contract comparison. Any divergence from the enquires discovered should also be recorded for later judicial decision and unit grade pricing when selecting quotations.The estimator should check for the followingsThe conditions stated in the quotations is as same as the terms and conditions stated in the enquires and the quotations are not alternative offersThe discounts comply with the enquires 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 accurate information.2.2.1 Domestic Sub-contractorsThe main contractors estimator should ensure that all the items for a particular deal are priced properly, and should request the sub-contractors for any missing rates. The rates provided should be checked for consistency with the score of quantities, and they should be realistic although the cost will vary depending 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 estimator may apply a percentage or add a lump sum to certain rates in cases where considerations are taken for the followingWork of specific builders which is not measured somewhere else is neededCertain attendances are needed to b e included in the measured ratesSpecific trades requirement provided by the contractorMargin for over-heads and profit 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 act 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 cost for general and special attendances. The costs for general attendances are normally provided in the evaluation of project over-heads for logistical requirements while the special attendances are to be priced separately 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 equivalence of harms2.3.1 Comparing with Market PricesThe main contractors estimator should compare the quotations provided by the sub-contractors with the market prices.2.3.1.1 Variations in unit ratesWhile comparing the prices, the estimator should also consider factors which may affect the rates of materials, plants, and labour. 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 surface 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 each quotation submitted by all the sub-contractors. A spread piece of paper 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. Selection of the quotation (with Appendix 2)Price3.1 General criteria superiorTimeIn most of the case (i.e. except in case of nominated sub-contractor), there is still a long-list of sub-contractors, who compliant with the requirements, remain after checking the quotations with the enquiries. In order to signalize 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 instruction system.3.1.1 PriceThe quoted price in the quotation constitutes substantial effect on the decision making of the cost estimator. With a lower 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 Experience and qualificationsAn experience and qualified sub-contractor on the type of work of the project means it can finish the work in a more effective way compares with those without (i.e. the purpose time may be shortened due 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 es timator can evaluate the sub-contractors past performance with the company or refer to different Registers1and victor 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 inadequate working capital of the sub-contractor may hinder the working progress and lengthen 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 investigating 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 minimize loss to the client.3.1.4 story and management systemReputation of a sub-contractor is generated when it provided bore 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 both low price and good quality. Hence, in order to maintain a good balance between 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 prototypical stage. The ratio can depend on the complexity of the work, the degree of innovation and the flexibility. For instance, straightforward projects should be slight complicated and less innovative. Therefore, the price factor shou ld 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 weighted according to their importance to the project. Basically, there are four major criteria. They include the practice of the company, the project organization, the key project personnel and the project execution. perpetrate 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 chest of drawers level of team members.Key project personnel includes the qualifications, communication skills and enthusiasm of the team members and the extent they underst and 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 occupy 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 subsequent assessments of the quotations. In the assessment sheet, both the quality and price tons will be given and an general score will be added. An unfilled 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 failure of a specific criterion, then the estimators may re-assess the requirement 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 quote d 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 scores 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 same sheet. Since fi rm 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 open upThe 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. Actions 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 appropriateness of the quality and price ratio and the weighting system can used to adjust the mechanism and improve its operation in future works.6. ConclusionIn conclusion, the main contractors 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 s elect 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 Sewerage (DC/2009/11). The cost estimator proposed to sub-contract the installation works of temporary water and electricity 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 a daptation of selective tendering alternatively 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 received 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 better quality to price ratio and experienced. Figure 7b is the tender report for comparison. Since the score of Wing Wo was the highest, its managing 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 Tender list Figure 7b Tender report