Project Management & Costing Methods

This assignment delves into the realm of project management, examining systems approaches to planning, scheduling, and controlling projects. It further explores the application of Activity Based Costing (ABC) in diverse sectors, including construction, energy, and healthcare. The provided case studies and examples illustrate how ABC helps organizations accurately assess costs and improve profitability. The assignment emphasizes the crucial role of sustainability and efficient resource allocation in modern project management practices.

Project costing

Table of Contents
1. EXECUTIVE SUMMARY.........................................................................................................1
2. RISK ASSESSMENT..................................................................................................................2
2.1 Chart showing before and after risk conditions..............................................................14
2.2 Summarisation of important risks related to this contract work.....................................15
2.2.1 Analysis and management of risk...........................................................................15
2.2.2 Likelihood...............................................................................................................16
2.2.3 Consequence...........................................................................................................16
2.2.4 Severity of risk........................................................................................................16
2.2.5 Recommendations...................................................................................................23
3. PREPARING PROJECT ESTIMATES....................................................................................24
4. SCHEDULING OF WORK ......................................................................................................26
4.2 Planning in respect of Bid..............................................................................................28
4.3 Estimation of cost for expenditure related to site visit...................................................33
5. ORGANISATION CHART.......................................................................................................35
6. BACKGROUND RESEARCH ................................................................................................36
6.1 CBW complex................................................................................................................36
6.1.1 Background.............................................................................................................36
6.1.2 Location..................................................................................................................36
6.1.3 Features of project..................................................................................................36
6.1.4 Construction and design.........................................................................................37
6.1.5 Risk encountered....................................................................................................37
6.1.5 project delivery system...........................................................................................37
6.1.6 Calculation of Current dollar value........................................................................38
6.2 One central park.............................................................................................................39
6.2.1 Background.............................................................................................................39
6.2.2 Location..................................................................................................................40
6.2.3 Features of project..................................................................................................40
6.2.4 Construction and design.........................................................................................40
6.2.5 Risk assessment......................................................................................................40
6.2.6 Project delivery.......................................................................................................40

6.2.7 Dollar rate calculation.............................................................................................41
6.3 Brookfield Place.............................................................................................................43
6.3.1 Background.............................................................................................................43
6.3.2 Location..................................................................................................................43
6.3.3 Features of project..................................................................................................43
6.3.4 Construction and design.........................................................................................43
6.3.5 Challenges in project..............................................................................................44
6.3.6 Delivery system of project......................................................................................44
6.3.7 Dollar rate calculation.............................................................................................44
REFERENCES................................................................................................................................1

1. EXECUTIVE SUMMARY
Melbourne,
Department of marketing and sales
Subject: Reporting on various business proposals
This is the report in which all new opportunities that are available with respect to
Australian business contracts are to be evaluated. A detailed study will be carried out under
which focus will be provided on three projects which are selected on high rise buildings and that
has been instructed by CEO. All the aspects which are to be covered in this report include new
ideas that are introduced in company, summary about all three projects and all other functions
which are performed and the manner in which cost is calculated. Also, risk assessment will be
carried out so that proper analysis can be made.
Bidding will be done in relation of all the three projects that are present in Australia. The
total value that is involved in them is around $450 million. All factors that are to be considered
in the process of preparation of bid are as follows:
1. Duration that will be taken under this is approx. 5 months.
2. Total staff which is involved in this is 7 departments and 15 people under them.
3. Estimated cost of this is $ 300,420
The bifurcation of total cost is as follows:
S.n Department Cost
1 Administration $0
2 Marketing $60,273
3 Construction $12,992
4 Engineering $10,577
5 Contracts $18,798
6 Estimating $78,108
7 Planning $51,206
Total $231,954
19.25% overhead charge $44,651.21
ticket fare and accomodation $23,810
Grand total $300,415.53
S.N
. Phase Start Finish Cost
1

1 Scope
Definition
March
6,2017
May
11,2017
$56,577.36
2. Estimation April7,
2017
June
7,2017
$14,8513.4
4
3. Review June 11,
2017
June 28,
2017
$15,744.32
4. Submission June
29,2017
July 3,
2017
$3788.64
All the required information is provided in this report and can see in attached documents.
Regards,
Rijul Gupta
(Bid coordinator)
2. RISK ASSESSMENT
In all the three projects, there are various risks which are identified and all of them are
mentioned below together with the mitigations in respect of them:
S. No. Description of risk Recommended mitigation
1 In respect of Excavation and
demolition activities
→ In all the big projects which
are related to high rise, there
are various operations with
respect to excavation,
construction and demolition
that are required to be carried
out in simultaneous manner.
So, due to this, in order to
conduct all activities in a
proper manner, it is needed
that an initial planning shall be
done and also, redesigning of
structure is to be performed.
→ It is needed that all the
2

disruptions that take place in
construction activities shall be
reduced and for that, effective
planning shall be done (Ali and
Kamaruzzaman, 2010). Also,
total work that is to be done
should be divided into various
parts so that it can be achieved.
2 Risk of design: Omission and
other changes in drawings.
→ In the process of designing,
there are several changes that
take place and also, some
modifications are made at the
last minute. The process that is
to be carried out so that
detailing can be completed will
take a long time and by this,
overall period of project will
be extended.
→ In order to overcome all
disputes which take place, it is
required that good relations
shall be maintained in between
the contractor and clients.
→ Proper communication
system shall be developed so
that complete information can
be communicated in the best
possible manner.
3 Related to location of site → The risk in relation to safety
is present as street in which
3

site is situated has high level of
people movement.
→ With respect to construction
work, there shall be effective
discussion that is to be
conducted by contractor with
council, all stakeholders and
neighbouring meetings.
4 Conflicts among all sub-
contractors
→ It is required that proper
environment shall be created
so that all members enjoy
working in specified field and
by this, team spirit is
developed.
→ All the work shall be
allocated to different
departments in a proper
manner and they shall be
explained clearly about what is
to be done in the provided
zone (Larham, 2010).
→ In the whole period of
construction, it should be
ensured that good coordination
and communication is
established.
→ A team member is needed
to guide all others who are
there in the team and for this, it
shall be noted that appropriate
4

and skilled persons are elected.
5 Coordination and logistics
related risk in which
transportation, location and
other aspects are included.
→ Proper plan is to be made
regarding the construction site
in which tenants are there in
some portion and remaining is
utilised for construction. In
this, proper execution of plan
will be required to be done so
that project can be completed
in an efficient manner.
→ Effective work environment
is to be made and for the same,
it has to be ensured that
appropriate training is given to
all assigned workers by a
qualified leader. By doing so,
proper working is ensured.
→ There are various issues
which arise and in order to
deal with them in the best
manner, it is required that
professional people shall be
allocated.
6 Community and constraints
that are related to it. In the site
updates, related to
infrastructure is required by
various contractors.
→ The main factor that is
involved in making project a
success is that proper
engagement shall be made by
whole community.
→ Appropriate actions are to
be taken with respect to
5

different updates related to
construction and for that,
several tools shall be taken into
consideration. Some of the
issues related to it are
newsletters, regular reporting
and project hotlines along with
complaints by neighbouring
buildings. Also, personal
relations are to be maintained.
7 Carrying out of construction
on various work faces in
simultaneous manner
(Amelung and Moreno, 2012).
→ All the functions shall be
assigned on appropriate basis
to team members who are
responsible for controlling of
team.
→ in the construction work
there is a complex mix and to
overcome that it is required
that several procedures related
to it shall be implemented by
project manager.
→ There are many ways with
the help of which it is possible
to overcome risk and it
includes conduction of
coordination meeting on daily
basis or an exclusion zone can
be established.
→ The construction work is
6

performed in different sectors
and in order to maintain
harmony among them it is
required that proper
coordination shall be
established between all the
subcontractors involved.
8 Risk related to additional cost
which arise due to changes that
takes place in laws and
policies.
→ In respect of all future
obstructions, it is required that
consideration shall be given to
margin of contingency.
→ Preparation of unbiased
contract and report shall be
undertaken.
→ In the report all the cost that
are incurred additionally or if
any delay has taken place
because of modifications in
laws and policies shall be
mentioned. This should be
done only when they are
related specifically to that
project.
9 Delay or hindrance is caused
in construction work due to
bad weather conditions.
→ All the environmental
factors and weather conditions
in relation to site shall be
studied in detail.
→ Regular updates should be
provided about the weather
condition of site.
7

→ Separation of contingencies
and allowances will be done
for weather aspects.
→ weather conditions of past
years shall be properly
analysed in relation to site so
that chances of occurrence of
extreme weather conditions
can be identified.
→ Before starting project all
the factors shall be researched
about weather of site so if any
risk is there then it can be
identified.
10 Risk of amalgamation in
respect of quality of project
and cost efficiency and
sustainability of environment.
→ Survey and study shall be
carried out for the
environment.
→ Various important methods
are there that can be used and
they include water recycling,
trigeneration power, passive
solar design and black water
treatment plant.
→ It is required that new and
innovative methodology shall
be incorporated in building
such as green walls.
→ Various developments keep
on occurring and in order to
make all the members aware
8

about them it is needed that
training shall be provided to
them about all the new
technologies.
11 Difficulty in implementation
of several structures because
of their designs and innovative
designs and all this leads to
delay in project.
→ Best construction
techniques should be
undertaken and for this study
about scope of project should
be done (Cooper, 2017).
→ workers will be able to
carry out operations in most
effective manner if they are
provided with all knowledge
regarding technology.
→ Use of best machines and
equipments shall be made and
it shall be ensured that proper
guidance of experts should be
used for that.
→ The person who is most
experienced will be assigned
responsibility about related
field and then he will have to
direct all other members of
team in proper manner.
12 Difficulty which is faced in
using big equipments and also
in installation process of broad
structures to extreme levels.
Also safety risk is involved
→ Such technicians should be
appointed who have worked
under same field in past and
have experience.
→ Equipment should be taken
9

under it. from such supplier who is well
known and on which trust can
be done.
→ Such procurement team
should be assigned which is
experienced and skilled so that
all issues in relation to
installation of them at sites can
be dealt in most appropriate
manner.
→ In order to avoid further
risk, it is needed that care
should be taken while
choosing machine and its
operator.
13 Delay of project due to
extension of material
procurement process
(Henderson and Stackman,
2010).
→There are several such
materials which are required in
good amount and also which
take lot of time in arrival so it
should be ensured that timely
orders are placed as by this
they will be delivered in
appropriate time frame.
→ Such supplier shall be
selected who is reliable and
also some of them shall be
kept so that can be used in case
of emergency.
→ Material to be needed shall
be estimated in advance so that
10

accurate planning can be done
in respect of it.
→ Proper supply of material
should be done on site and for
this such personnel are to be
hired in procurement team who
are professional and can
perform it in best manner.
Above are mentioned all the risk which are involved in three projects. Out of them there
are some which are most important and five among them together with mitigation strategies
related to them are provided below:
S. No. Risk description Mitigation
1 Risk of amalgamation in
respect of quality of project
and cost efficiency and
sustainability of environment.
→ Survey and study shall be
carried out for the
environment.
→ Various important methods
are there that can be used and
they include water recycling,
trigeneration power, passive
solar design and black water
treatment plant.
→ It is required that new and
innovative methodology shall
be incorporated in building
such as green walls.
→ Various developments keep
on occurring and in order to
make all the members aware
about them it is needed that
11

training shall be provided to
them about all the new
technologies.
2 Difficulty in implementation
of several structures because
of their designs and innovative
designs and all this leads to
delay in project.
→ Best construction
techniques should be
undertaken and for this study
about scope of project should
be done.
→ workers will be able to
carry out operations in most
effective manner if they are
provided with all knowledge
regarding technology.
→ Use of best machines and
equipments shall be made and
it shall be ensured that proper
guidance of experts should be
used for that.
→ The person who is most
experienced will be assigned
responsibility about related
field and then he will have to
direct all other members of
team in proper manner.
3 Delay of project due to
extension of material
procurement process (Adindu,
2012).
→There are several such
materials which are required in
good amount and also which
take lot of time in arrival so it
should be ensured that timely
orders are placed as by this
12

they will be delivered in
appropriate time frame.
→ Such supplier shall be
selected who is reliable and
also some of them shall be
kept so that can be used in case
of emergency.
→ Material to be needed shall
be estimated in advance so that
accurate planning can be done
in respect of it.
→ Proper supply of material
should be done on site and for
this such personnel are to be
hired in procurement team who
are professional and can
perform it in best manner.
4 Carrying out of construction
on various work faces in
simultaneous manner.
→ All the functions shall be
assigned on appropriate basis
to team members who are
responsible for controlling of
team.
→ in the construction work
there is a complex mix and to
overcome that it is required
that several procedures related
to it shall be implemented by
project manager.
→ There are many ways with
the help of which it is possible
13

to overcome risk and it
includes conduction of
coordination meeting on daily
basis or an exclusion zone can
be established.
→ The construction work is
performed in different sectors
and in order to maintain
harmony among them it is
required that proper
coordination shall be
established between all the
subcontractors involved.
5 Risk of design: Omission and
other changes in drawings.
→ In the process of designing
there are several changes that
takes place and also some
modifications are made at last
minute. The process that is to
be carried out so that detailing
can be completed will take
long time and by this overall
period of project will be
extended (Kumar, Cheng and
McGibbney, 2010).
→ in order to overcome all
disputes which takes place it is
required that good relations
shall be maintained among
contractor and client.
→ Proper communication
14

system shall be developed so
that all the important
information can be
communicated in best manner.
2.1 Chart showing before and after risk conditions.
Matrix of risk prior to
treatment Consequences
Irrelevant
Least
important Important
Most
important Catastrophic
1 2 3 4 5
Less than
or equal to
100000
Less than or
equal to
1000000
Less than or
equal to
10000000
Less than or
equal to
100000000
More than
100000000
Likelihood A. Almost
Fixed
95.00
% 5
B. Probable
80.00
% 3
C. Average
50.00
% 1,2
D.
Improbable
20.00
% 4
E. Rare 5.00%
Matrix of risk prior to treatment Consequence
Irrelevant
Least
important Important
Most
important
Catastrophi
c
1 2 3 4 5
Less than Less than or Less than or Less than or More than
15

or equal
to 100000
equal to
1000000
equal to
10000000
equal to
100000000 100000000
Likelihood A Almost
Certain 95.00%
B Probable 80.00%
C Average 50.00% 2,3,5
D
Improbable 20.00% 1,4
E Rare 5.00%
2.2 Summarisation of important risks related to this contract work
2.2.1 Analysis and management of risk.
In accordance with AS/NZS 4360: 1999 the standard process for risk management,
consequences, likelihood and risk severity are provided below:
2.2.2 Likelihood
Threshold Description Probability
A Almost Fixed 95%
B Probable 80%
C Average 50%
D Improbable 20%
E Rare 5%
2.2.3 Consequence
In all the project, the effect of risk will be different from one another (Council, 2012). In
order to determine the project severity, only one aspect is covered in this project and that is cost
involved.
16

Threshold Description Cost (USD)
1 Irrelevant Less than or equal to
$100,000
2 Least important Less than or equal to
$1,000,000
3 Important Less than or equal to
$10,000,000
4 Most important Less than or equal to
$100,000,000
5 Catastrophic More than $100,000,000
2.2.4 Severity of risk
Risk
Severity
Likelihood x Consequence
Combinations
Approx. Value
Range
Severity
Colour
Extreme A3-A5, B4-B5, C4-C5, D5 >$6m Red
High A1-A2, B2-B3, C3, D4, E4 $80,000-$6m Blue
Moderate C2, D3 $50,000-$2m Yellow
Low C1, D1-D2, E1-E2 <$200,000 Green
There are 13 risks which have been selected and classification of them is done on basis of
their consequences, severity and likelihood.
No
Risk
Description Likelihood Consequence
Risk
Severity
Severity
Colour
1 Destruction of the present building A
Almost
Fixed 4 Major Extreme
2 Major changes were issued by using
directions and variations. C Average 4 Major Extreme
17

3
The risk is involved in respect safety as
there is high movement which takes
place in that street where site is located. C Average 4 Major Extreme
4
The information is not communicated
in appropriate manner and due to this
disputes arise among all sub
contractors. B Probable 2 Minor High
5
Risk of coordination is present in
relation to erection, transport and
location. E Rare 4 Major High
6
Constraints of infrastructure at site due
to various subcontractors.
C Average 3 Moderate High
7
Carrying out of Simultaneous
construction works at several work
faces D
Improbab
le 3 Moderate Moderate
8 Risk related to cost increment by law
and policy modifications. C Average 2 Minor Moderate
9
Disruption in building works due to
poor weather situations and by that risk
of project delay arises. B Probable 4 Major Extreme
10
Maintenance of project quality along
with Amalgamation of cost efficiency
and sustainability of environment. B Probable 4 Major Extreme
11
Complexness in the execution of the
different construction due to its
innovative technologies and this leads
to project delay. C Average 4 Major Extreme
12 Complexness in approach of huge
equipment for commencement of big
construction to level of ultimacy with
A Almost
Fixed
2 Minor High
18

accuracy and high level of safety.
13 Delay in materials procurement causing
the postponement of the project. D
Improbab
le 4 Major High
All the consequences, likelihood and severity in respect of the risk which has been
identified before and after applying all strategies related to mitigation are provided in table given
below:
No RISK L C S MITIGATION L C S
1 Existing building's
destruction A 4
E
xt
re
m
e
 It is highly required that construction and
demolition of buildings shall be carried out
in simultaneous manner in relation to high
rise projects. Proper initial planning is to be
done so that smooth working can be
performed. Also redesigning of structure
should be done in effective way.
 By the help of proper division of work and
effective planning in various parts it will be
possible to reduce all interruption in
construction activities.
B 3
H
i
g
h
2
Big changes in
project were
issued in different
forms of direction
and variation.
C 4
E
xt
re
m
e
 In the process of detailing in respect
of drawings, there are various last
time changes which takes place and
this will increase time required to
complete the process involved in
project construction (Ratnatunga and
Waldmann, 2010).
 To resolve all conflicts between contractor
and client, it is needed that Strong
relationship shall be developed among them.
 Information shall be provided to all and also
good communication should be created
among all workers and employees.
D 3
H
i
g
h
19

3
Safety risk of
historical sites is
there or if location
is in some
crowded street
then also
movement of
people is high
which creates risk.
C 4
E
xt
re
m
e
 In given case the location is such where high
level of public movement is present and this
leads to creation of safety risk.
 It is required that proper discussion shall be
carried out in relation to construction work
with neighbours, stakeholders and council.
D 3
H
i
g
h
4
Arising of
conflicts among
all subcontractors
because of lack of
proper
information and
communication
system.
B 2
H
ig
h
 All the departments shall be provided with
the clear instructions regarding the work
which is to be performed by them.
 It is necessary that care shall be taken about
working environment so that all the members
enjoy working in company as a team.
 Guidance is required for all teams and so
such person shall be made leader who
possesses necessary skills and will be able to
guide all in most effective manner.
 In whole period of construction efficient
coordination and communication shall be
maintained.
C 1
M
o
d
e
r
a
t
e
5
In respect of
location and
transportation,
there is risk
related to logistics
and coordination.
E 4
H
ig
h
 It is very necessary that proper plan and its
execution shall be made in respect of
construction which is carried out in such
building where a portion of it is occupied by
tenants and also related to some adjacent
building which is involved in process of
construction.
 Most effective and efficient environment
shall be created and for that qualified leader
should be elected so that he can provide
appropriate training to all the workers.
 All the issues that arise at site shall be dealt
in appropriate manner and for that
professionals are to be hired.
E 3
M
o
d
e
r
a
t
e
20

6
Constraints in
respect of updates
of infrastructure in
respect of the
construction site
C 3
H
ig
h
 The main factor that is responsible for success
of any project is involvement of community
so it shall be focused.
 Various tools in respect of the update of the
building project that includes project hotlines,
newsletters, data meeting, regular reporting on
the complains by the neighbouring sites and
the personnel relationship is to be braced and
on basis of it all other actions should be taken.
D 2
M
o
d
e
r
a
t
e
7
Multiple activity
faces which
require carrying
out of
simultaneous
work.
D 3
M
o
d
er
at
e
 All the members in team should be
provided with the required activities and
also they are to be held responsible for
controlling work in whole team (Tsai,
2010).
 Project manager is authorised to implement
all procedures and policies so that complex
procedures can be done in proper way by
having complete understanding regarding
them.
 Exclusion zones are to be established and also
regular meetings and discussions shall be
done in order to overcome all these problems.
 It is necessary that proper harmony is to be
maintained in work which is performed in
continuous manner in various sectors by
project manager.
E 2
L
o
w
8
Incremental cost
which is incurred
due to alterations
in policies and
laws.
C 2
M
o
d
er
at
e
 In relation to future obstructions, margin of
contingencies shall be taken into
consideration.
 Such contract and report should be prepared
which is unbiased.
 There will be some or other additional cost
which is incurred due to amendments in state
laws and policies and some of them are such
which are directly related to project. So those
are to be specified in report prepared.
D 1
L
o
w
21

9
Delay in
construction and
whole project can
be noted due to
some adverse
weather
conditions.
B 4
H
ig
h
 All the factors related to environment and
weather conditions are to be studied in detail.
 Weather of site shall be updated on regular
basis.
 In relation to weather conditions
contingencies and allowances should be
bifurcated appropriately.
 Whether there are chances of occurrence of
any extreme weather condition can be
determined by analysing the records related to
it for past some years.
 All the research in respect of identification of
probability of happening any adverse weather
condition at site of project is to be carried out
before any construction project is
commenced.
C 3
M
o
d
e
r
a
t
e
10
Consolidation of
environmental
sustainability and
price efficiency
together with the
project's high
level of quality.
B 4
H
ig
h
 Environment should be surveyed and
studied in most effective manner.
 Various efficient techniques such as
trigeneration power, black water
treatment plant, a water recycling and
and passive solar design can be utilised.
 Advanced and new method like green
walls can be included in project related
to building.
 All the members are to be aware about
various changes and new technologies
which are being introduced so that they
can use them in proper manner. For this
it is needed that they shall be given
adequate training.
C 3
M
o
d
e
r
a
t
e
22

11
Project is delayed
as there are
various new
technologies
which are to be
incorporated. This
is because
implementation of
new methods
involves a
complex process.
C 4
H
ig
h
 In construction most effective technique shall
be undertaken and for that scope of project is
required to be studied by managers.
 It is very important that all the work should be
performed in most efficient manner and so
workers are to given proper knowledge about
all the methods and tools to be used.
 It is needed that all members in team are to be
instructed by a leader and therefore they shall
be chosen by considering skills and
knowledge possessed by them for the
assigned task.
 Experts are to be hired so that all latest
equipments can be used under their proper
guidance.
D 3
M
o
d
e
r
a
t
e
12 Problems are
faced in using big
equipments in the
big structures
installation and so
there is risk of
safety due to
accuracy issues
and other aspects
involved.
A 2
H
ig
h
 A well known and trustable supplier shall be
selected.
 The process involved in structure installation
is complex and so various issues are faced in
it. To deal with them professional and
experienced persons shall be appointed.
 Such technicians shall be selected who posses
past experience in same kind of work.
 In order to eliminate any further risk it is
required that operators and machinery should
be chosen by taking due care.
B 1
L
o
w
13
Project is
postponed if the
material required
to be used under it
is not procured in
timely manner.
D 4
H
ig
h
 To get material on time it is needed that all
those which are needed in large amount and
which also take time in arrival are to be
ordered accordingly so that problems related
to it can be avoided.
 It is very important that such supplier is
chosen on whom reliance can be placed. Also
to deal with emergency cases some backup
suppliers should be held.
 All the essential materials should be
supplied on site in appropriate manner
and for that skilled professionals are to
be included in procurement team
(Burger and et. Al, 2011).
 Estimations are to be made in respect of all
the material which is required and also proper
planning shall be done so that no issues while
carrying out operations are faced.
E 3
L
o
w
23

2.2.5 Recommendations
It has been determined after the evaluation that in the process of project execution there
are various risks which may be faced. So in order to deal with all those challenges, there are
many strategies which have been formulated by company. Many discussions and meetings have
been conducted and then company determined some mitigations which are to be adopted by it in
project of construction. Some of them are as follows:
 There are mainly thirteen risks which are faced by company in all three building projects
and so they have been discussed in detailed manner (Larson, and Gray, 2013). By doing
so same kind of risks can be minimised in coming period.
 All the issues related to OH & S are to be considered in appropriate manner and so they
are to be included in all meetings.
 It is highly required that management of project shall be done by strong team who
possesses necessary experience in same kind of field and by this they will be able to
prepare whole team in such manner that they are ready to deal with all unexpected risk
that many be faced by company in project.
 It shall be ensured that most experienced and skilled personnels should be hired in team
related to all departments so that no delay is caused in carrying out of project.
 For the availability of material, dealings should be done by company with famous and
trustworthy suppliers. Arrival of it on time shall be ensured by placing orders in required
time and this is to be done in respect of those materials which are to be used in high
quantity and and also whose arrival take more amount of time.
 Proper investigation in respect of project site shall be carried out and in that all the
calamities and condition of weather in past will be studied for past some years so that
preparation can be made for those delays which can be caused due to adverse weather
conditions.
 In the process of risk management and assessment, AS/NZS 4360: 1999/2004 is to be
followed by company (Kerzner, 2013).
 There are many issues which may be known or unknown and to deal with them
estimations are to be made and in this process allocation of all allowances, overhead
profits and profit margin for contingencies is required to be done.
24

 The team that is to be selected should not be made in messed manner rather there shall be
qualified and skilled professionals to be appointed. Also such technicians are to be hired
who possess appropriate experience so that they can use all equipments and machines in
proper manner.
 The priority in company should be provided to safety issues. For this all members should
be made aware of new technology that is to be used so that no accidents occur. Training
sessions are to conducted for meeting this criteria.
 It is very important that such persons are hired who know how to handle all assigned
task. Also they shall be capable enough to maintain proper communication and
coordination in team.
3. PREPARING PROJECT ESTIMATES
In the project there will be various costs which are incurred and so it is needed that
proper estimation shall be done. For this various calculations are to be made. All the employees
will be paid some amount and with the help of that hourly payment rate can be determined
(Kelly and Benetti, 2011). For this total amount is divided with working hours that are there in
respect of full year and by doing so hourly rate is identified.
Computation of various aspects:
Total week days present in an year = Total number of days – Total days in weekends
Total weeks worked in an year = 52.2 weeks - ( 4 days week leaves annually + Public holidays
for 2 weeks + 1.3 weeks Vacation for long service + Sick leave for 2 weeks)
= 42.9 weeks
Worki
ng time
weekly
Pai
d
tim
e
Yea
rly
avail
able
time
Total
days in
weekend
during
year
Year
ly
week
days
in
total
Annua
l Leave
Public
Holida
ys
Sick
Leave
Long
Service
Leave
Actual
Workin
g Time
wee
k
40 52.2 4 2 2 1.3 42.9
Day 5 365 104 261 20 10 10 6.5 214.5
Hour 8 160 80 80 52 1716
25

It has been assumed that per day working hours are 8 hours and on that basis total
working hours for whole year are:
= 42.9 X 8 X 5 = 1716 hours.
Loading 17.5%
Payroll tax 4.25%
Other insurance 4.75%
Workers compensation
insurance 1.35%
Superannuation 9.50%
Relevant calculations:
Weekly base payment = Annual salary / 52.2
Superannuation = 9.50% X Annual salary
Leave loading on annual basis: Weekly base payment X 4 X 17.5%
Insurance amount = (Annual leave loading + Annual salary) X (4.75% + 1.35%)
Total employee cost per year = Annual salary + Superannuation + annual leave loading + Total
insurance + Payroll tax
Per hour rate = Total employee cost of an year / Total actual hours of working per year
The hourly rate of each employee present in company is represented in table provided below:
26

Name Description No of
staff
Annual
salary
Base weekly
payment
Annual
leave loading Super Payroll tax Total
insurance
Total cost of
employee per year Hourly rate of pay
Nageena Prajapati Bid coordinator 1 119,813 $2,295.27 $1,606.69 $11,382.24 $5,160.34 $7,407 $145,369 $84.71
JaneSnow Bid production
manager 1 $52,352 $1,002.91 $702.04 $4,973.44 $2,254.80 $3,236 $63,519 $37.02
Francis Ng Production
Assistant 1 $51,096 $978.85 $685.20 $4,854.12 $2,200.70 $3,158.65 $61,994.67 $36.13
Design Design Engineers 2 89,051 $1,705.96 $1,194.17 $8,459.85 $3,835.42 $5,504.96 $108,045.39 $62.96
Construction Construction
Engineers 1 88,336 $1,692.26 $1,184.58 $8,391.92 $3,804.62 $5,460.76 $107,177.88 $62.46
Contract Contracts 1 $85,217 $1,632.51 $1,142.76 $8,095.62 $3,670.29 $5,267.95 $103,393.61 $60.25
Rick Parisalla Scheduler 1 $76,255 $1,460.82 $1,022.58 $7,244.23 $3,284.30 $4,713.93 $92,520.03 $53.92
Nasrin Abdi Planning Engineer 1 $89,446 $1,713.52 $1,199.47 $8,497.37 $3,852.43 $5,529.37 $108,524.64 $63.24
Nancy
PEREZ
QUINTEROg
Lead Estimator 1 $124,808 $2,390.96 $1,673.67 $11,856.76 $5,375.47 $7,715.38 $151,429.28 $88.25
John Ball Estimator 1 $110,717 $2,121.02 $1,484.71 $10,518.12 $4,768.57 $6,844.30 $134,332.70 $78.28
Jill Pham Estimator 1 105,289 $2,017.03 $1,411.92 $10,002.46 $4,534.79 $6,508.76 $127,746.92 $74.44
David Rodan Estimator 1 $79,287 $1,518.91 $1,063.24 $7,532.27 $3,414.89 $4,901.36 $96,198.75 $56.06
Bill Smith Clerical Support 1 $46,034 $881.88 $617.31 $4,373.23 $1,982.68 $2,845.73 $55,852.96 $32.55
CEO Chief Executive
Officer & Board 1 N/A N/A N/A N/A N/A N/A N/A N/A
4. SCHEDULING OF WORK
In the process of preparation of bid in respect of construction project, the duration has
been decided at 4 months that is starting from 6th March 2017 and will end on 3rd July 2017. The
time period for which work will be carried out in one month is for 8 hours in one day and in a
week 5 days are working (Yang and Hao, 2017). There is one day which is given as roster off in
each month. In the coming four months the total public holidays which will be received together
with four days of roaster off are presented below:
27

In the project which is being performed the total number of departments which are
operating are seven and all of them are mentioned here under:
1. Marketing
2. Administration
3. Construction
4. Contracts
5. Engineering
6. Planning
7. Estimating
There are various stages in which work is performed in any project and in the current scenario it
is classified in four phases. All of them are as follows:
 Scope definition and this covers visiting sites, designing and formulation of strategy.
 Estimation is to be made in which take-off, planning, pricing and contingency will have
to be included (Kim, 2017).
 Then next stage is review under which examination will be carried out for all levels from
internal to CEO review.
 Last comes the submission, here final pricing is done and also schedule in respect of it is
made together with submission and documentation.
4.2 Planning in respect of Bid
With the help of MS project and taking into consideration details regarding working
hours, a schedule about the manner in which all tasks are to be performed has been made. There
are four phases in which all the total 20 activities are bifurcated. All the allocation will be made
by taking time frame in consideration and the responsibility of its execution is on all seven
departments which are identified earlier.
28

All the operations should be performed in manner specified and within the time period
that is set (Fregonara, 2017). There can be some float in respect of some activities which will
take extra time in completion whereas rest are done in set period.
All the data which is available has been applied and on the basis of that outcomes are
found that are as follows:
29

30

All the cost in respect of various employees is estimated and that is provided below:
Resource
Name Initials Code Group Max.
Units Std. Rate Work Cost
Jane Snow JS 1 Marketing & Sales 100% $37.02/h 400h $14,808.00
Francis NG FN 1 Marketing & Sales 100% $36.13/h 208h $7,515.04
31

Design DES 2 Engineering 100% $62.96/h 168h $10,577.28
Construction CON 1 Construction 100% $62.46/h 208h $12,991.68
Contract CTR 1 Contracts 100% $60.25/h 312h $18,798.00
Bill Smith BS 1 Estimating 100% $32.55/h 320h $10,416.00
Rick Parisalla RP 1 Planning 100% $53.92/h 96h $5,176.32
Nasrin Abdi NA 1 Planning 100% $63.24/h 192h $12,142.08
Nancy PEREZ
QUINTERO NPQ 1 Planning 100% $88.25/h 384h $33,888.00
John Ball JB 1 Estimating 100% $78.28/h 320h $25,049.60
Jill Pham JP 1 Estimating 100% $74.44/h 368h $27,393.92
David Rodan DR 1 Estimating 100% $56.06/h 272h $15,248.32
CEO CEO 1 Administration 100% $0.00/h 80h $0.00
Nageena
Prajapati YOU 1 Marketing & Sales 100% $84.71/h 448h $37,950.08
Total $2,31,954.32
19.25%
overhead
charge $44,651.21
Ticket
fare
and
accom
odatio
n $23,810
Grand
Total $3,00,415.53
All the estimations that are made in respect of various departments are as follows:
S. No Department Estimated Cost
1 Marketing $60,273
32

2 Administration $0
3 Construction $12,992
4 Contracts $18,798
5 Engineering $10,577
6 Planning $51,206
7 Estimating $78,108
Total $231,954
After the amount which is to be incurred in respect of all costs is determined, it is required that it
shall be allocated to each phase so that identification in accordance with stages can also be made
(Aouni, McGillis and Abdulkarim, 2017). Therefore for this purpose phase wise estimation is
provided below:
No. Phase Cost
1 Scope Definition (Design, site visit, build strategy) $56577.36
2 Estimation (Takeoff, pricing, planning & contingency) $155844.00
3 Review (Internal review up to CEO review) $15744.32
4 Submission (Final Price, Pricing Schedule,
Documents & Submission) $3788.64
Total $231954
4.3 Estimation of cost for expenditure related to site visit.
A bid is being prepared for a company located in Sydney, New South Wales. In order to
carry out research site will have to be visited which is located in Sydney (Owens, 2017). For this
flight will be taken from Melbourne Airport.
For this estimates made by a travel company, discover Australia are to be used which are
as follows:
There will be various travels to be undertaken among which first is to be made for evaluation of
site and that is fixed from 14th March 2017 to 22nd March 2017. After this visit will be made for
attending meeting in respect of bid clarification and that is from 21st June till 23rd June 2017.
33

(Source: Discover Australia)
So in accordance with this, the total cost that will be incurred in visiting site is as follows:
New
Project
(NSW)
From To
Package
(airfare &
accommoda
tion)
Traveling
and meal/
day
Duration
(day) Staff Cost
Site
Evaluatio
n visit
14/03/2
017
22/03/
2017 $2,815 $150 9 5 $20,825
Bid
clarificati
on
meeting
21/06/2
017
23/06/
2017 $635 $120 3 3 $2,985
Total expenses $23,810
34

All the expenditures to be made are identified and with the use of them total amount to be spend
for bid is also determined. Therefore total cost estimate for bid together with their bifurcation is
provided below:
Particulars Amount
Cost related to preparation of bid $231954
Cost in respect of Visit of site $23810
Overheads @ 19.25% $44651.21
Total cost of bid completion $300415.21
Rounding off $300420
The cost which is estimated above is acceptable as the size of contract lies in range of $200 to
$500 millions.
5. ORGANISATION CHART
In an organisation, it is very important that connection shall be established among various
levels of people and for that the most effective manner that can be undertaken is by preparing an
organisation chart. All the activities that have been planned can be executed in most effective
manner and this is ensured if organisation chart is prepared in proper manner. All the tasks which
are required to performed by a particular sector are specifically mentioned in chart made and also
the members with whom it is to be done (Gharehbaghi and Sagoo, 2017). So this is one of the
most important advantage which will be received with the use of organisation chart.
Understanding about the operations to be done and information about them is available to all
members by using chart as it is presented in easy manner. The main of aim of this is that all new
ideas and perspective of each member is shared among all and that will be used by them for the
advantage of company.
In he given scenario it can be noted that there are total seven departments in which 15
employees are working for preparing bid. It is required that leader will have to be elected for bid
team and this is carried by Nageena prajapati who is bid coordinator and this is done after bid
contract is received which is performed by permission of bid production manager, CEO and
production assistant. In the meeting various aspects will be discussed that involves activities to
35

be undertaken at various stages in project and also about employees who will be involved in this.
All operations to be conducted and a schedule in respect of it will be provided to leader of every
department so that they have all details in respect of activities. Stakeholders also have the right to
know about all activities which are being performed in project and so the prepared schedule is
also provided to all of them. In some of the activities more resources and time is required and
due to this reason priority is given to them so they are carried our firstly and special care is taken
towards all of them. The main purpose for which meeting is conducted is to make all members
know about the task which is assigned and manner in which they are to be done so that timely
completion of them can be ensured.
6. BACKGROUND RESEARCH
6.1 CBW complex
6.1.1 Background
In Melbourne’s CBD, there are various high rise buildings and on of them is CBW
complex that is located at prime place and in this high rise buildings are there for office purpose
and they are of 5 star quality (Kim, Oke and Aigbavboa, 2017). Modern look has been given to it
and acts as meeting point for all the people. The technologies which are used under this are good
and can be considered in respect of coming projects.
6.1.2 Location
The location of this is 181 William street that is situated at corner of two main streets
which include William street and Bourke street. All workers and visitors can easy reach here due
to its central location where all local transport can be used.
6.1.3 Features of project
The period which is taken in its construction is two and half years. Around $320 million
is incurred in respect of it. Under this there are two towers of A grade which covers 76000 sq. m.
under them the space which is involved includes rental area ans also basement. 14 floors in
building are for IAG insurance and black Dawson lawyers are allotted 5 floors. Green star design
ratings were given to both the buildings.
36

6.1.4 Construction and design
 Developer: Brook field properties
 Architect: Bates Smart and SJB
 Main contractor: Norman Disney Young
6.1.5 Risk encountered
In the project there are various challenges which are faced and they relate to design, high
profile nature and location. Some of the aspects are as follows:
1. Planning: The tower is build in effective manner by making a proper plan. It was
decided that south section will be optimised at the time when existing building is
being demolished.
2. Cost: As second tower was not included while planning so due to it, variations
was identified amounting to $80 million. Due to early planning these points were
not included in it.
3. Difficulties in construction: It was because that distance among two towers was
12 meters and so due to this safety is affected.
4. Environment: Many problems were faced because green star is targeted. To
overcome them new and advanced technologies have been used under this.
5. Site logistics: Opening of only one segment was made and all other are to be
continued. This is an illogical thing to have people in building while construction
is going on.
6.1.5 project delivery system
 In this project destination control lift system is used which has taken place for the first
time and it increased time efficiency.
 Water reticulation system is used in project with the help of which water is recycled.
 DALI lighting control system is used in project.
 Due to large size personnel from different departments are incorporated.
 Risk was taken in case of designing in initial stage but because of proper planning it got
successful.
37

6.1.6 Calculation of Current dollar value
CPI for 2002 to 2006 is:
CPI from 2012 to September 2016 are:
38

The conversion will be made with the help of following formula:
F = P x (1 + i)n
Here,
F: Current value
P: Value in 2006
I: Inflation
n: 1
Inflation will be calculated as follows:
[(152.6-109.4)/152.6]x100 = 28.30%
F = 320000000 x (1+ .2830) = $410560000
6.2 One central park
6.2.1 Background
This is a three tower in which 5 residential buildings are there. In this commercial
facilities are also given. This is made in Carlton and United Breweries and is redeveloped.
39

6.2.2 Location
It is located in 28 Broadway, Chippendale and this is situated opposite to technology
university.
6.2.3 Features of project
Under this 1426 apartments are there and is completed by undertaking two stages from
2010 till August 2014. the estimated cost is A$ 597 millions. Under this two towers are there in
one park and in them 623 residential units are there (Cross, Shelley and Mayer, 2017). In second
stage The mark and Park lane are constructed.
6.2.4 Construction and design
Architect: Ateliers Jean Nouvel
Developers: Frasers property Australia
MEP engineer: Arup
Other consultants: AIK; Aspect Oculus; AECOM; Turf Design; Patrick and many more
6.2.5 Risk assessment
Various difficulties are face in project and they are as follows:
1. Changes in drawings: Most of the modifications have been made in designing and by this
delay was caused.
2. Fast tracked start: Excavation of site is done before the contractor arrived in which work
was provided earlier.
3. Multiple workfaces: Under this three faces were made and this was done in beginning of
second stage. There was great pressure to maintain material and logistics.
6.2.6 Project delivery
 There were unusual addition including cantilevered sky garden on level 29.
 Innovations were included so that delivery can be made and sustainability is maintained.
 There was a unique method involved in which Favco M2480D was used in project.
40

 Water recycling, passive solar energy and site trigeneration power was used so that 5 star
requirements can be met.
6.2.7 Dollar rate calculation
CPI from 2008 to September 2012:
Formula for this calculation is as follows:
F = P x (1 + i)n
F: Current value
P: Value in 2006
I: Inflation
n: 1
Inflation rate = [(109.4-105.9)/105.9]x100 = 3.3%
F = 597000000 x (1+.033)= 616701000
41

6.3 Brookfield Place
6.3.1 Background
The addition is made to Skyscraper in Australia and that is known as Brookfeild place. In
this historical view was given to earlier contemporary one. People like this place as under this
food, retails and beverages sector is also included.
6.3.2 Location
This building is considered as Home for BHP billiton and is located in 125 St. Georges terrace
(Morata, Yon and Johnson, 2017). The place is great attraction for all people as this is historical
and one of famous site in Perth's CBD.
6.3.3 Features of project
The total duration taken in its completion is from 2008 to 17th May 2012 and this is the
date which is prior to decided date. The cost is estimated at A$ 500 million.
The main characteristic of it are as follows:
42

 Under this 74854 sq. m. land is covered and on it 45 storey building is constructed.
 Gym, 10 tenancy cafe court and New childcare centre is included.
 In this retail space covers 7126 sq. m. of area and heritage building includes 4064 sq. m
of land. Some of important places are WA trustees, print hall, newspaper house and they
are required to be renovated.
 Cycling facilities, Roof storage and terrace and basement in 4 levels is made.
6.3.4 Construction and design
 Architect: Hassel, Fitzpatrick & Partners
 Main Contractor: Brookfield Multiplex (The negotiated contract in June 2008 with
primary contractor ‘Design and Construct’ and Brookfield made Brookfield as the main
contractor)
 Developer: Brookfield Properties
6.3.5 Challenges in project
The most important risks which are involved in this are as follows:
1. K Frame installation: The erections was to be carried out in west and east of tower. For
the assembling of each frame it is required that provision is to be provided for installation
of steel frame. Mega deck cantilevered platform is the method which is invented in this.
2. Construction in multiple work faces in simultaneous manner: various works were carried
out at same time and they included heritage building, gym, commercial tower, cafe. This
was challenge to do this and maintain coordination among them. For this exclusive zones
were created and also meetings were conducted (Profitable Project Costing, 2017).
3. Capital cladding: In order to match external columns and E frames finishing was to be
done by aluminium cladding.
4. Associated glass work: The risk which was encountered in this is steel installation and
curtain wall panels in the lift shaft. Crash decks were installed to resolve this problem as
by this falling of material was protected.
43

6.3.6 Delivery system of project
Delivery of project was made to Brookfield multiplex and this was done under construct
and design model by manager and head contractor. United property was used after the situation
was realised and this was done for development management, leasing and many other purposes
as by this better outcomes are gained.
There was wide popularity gained by project and so expansion to 65 members is made.
Such teams were framed who are having experience to handle such projects.
6.3.7 Dollar rate calculation
CPI from 2008 till September 2012 are:
F = P x (1 + i)n
Here,
F: Current value
P: Value in 2006
I: Inflation
n: 1
Inflation will be calculated as follows:
[(109.4-100.4)/100.4]x100 = 8.96%
F = $500000000 x (1+ 0.0896) = $544800000
44

45

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