Factors Influencing Project Cost Estimation

The provided document discusses various factors that affect project cost estimation, such as subcontracting, labor and equipment maintenance, and on-costs associated with directly employed labor. It highlights the importance of accurate quotations from new companies or specialist traders to ensure effective project administration. The document also touches upon techniques for estimating project costs when time involved is unknown, including the analogous method, individual judgment, and computer programs. It serves as a valuable resource for students seeking to understand the complexities of project cost estimation.

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18093
Name of Student
Institution Affiliation

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Part A
Trade………………………….. Reference…………………….
Item Description of works/materials/items Unit QTY
Price per
unit
Total
$
1.0
1.1
1.2
1.3
1.4
PRELIMINARIES
Carry out the data checks of the that
are required to be done on the availed
data and the information which is
relevant to the project mostly regarding
the existing conditions, site and all the
tasks that are to be undertaken
To generate with 2 copies of the main
drawing, a soft copy which should be
stored in an open drive and a hard copy
labelled the details of the project
design and the specifications of the
client.
Protecting all the existing finishes in
the areas that are to be affected by the
construction and carefully taking note
of the impacts that the construction

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1.5
process structures which are existing
Invalid source specified..
Clearing and clearance of the areas
where the face is to be constructed
before the construction starts and when
it will be completed.
2.0
CONSTRUCTION WORKS
Supply of equipment, tools, labours,
professional, machinery, materials
supervision and all that is required in
the construction of front face.
Note: Refer drawing for details –
Project 1 attached
2.1 Demolishing of the old existing
structures on site , clearing of flora and
garbage from the
LS
2.2 Excavating the ground for the purpose
of the laying the foundation the soli
which are excavated some is discarded
while the other is stored to be used in
backfilling
2.3
Construction of Brick Fence footage of
600 mm thick x 150 mm (W) on-site
concrete British Reinforced Concrete

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A7 sides formwork and concrete G25
and others to complete.
2.4
Construction of Brick Fence infill
metal panels for installation between
columns. Size of the metal panel:-
a) 50 mm (L) x 75 mm (W) x 1200
mm (H) Invalid source specified.
2.5
Construct 150 mm thick x 300 mm
(W) x 300 mm (L) concrete columns
cast on site G25 as footage and British
Reinforced Concrete A7 sides’
formwork and for the brick fence.
2.6
Supply and install 225 mm (L) x 112.5
mm (W) x 75 mm (H) Face bricks
$700
per
thousa
nd
supply
&
deliver
y
2.7
Supply and constructing of 2500 mm
(W) x 2400 mm (H) steel garage door
One
no
$300
per
piece

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Supply and install 300 mm (L) x 300
mm (W) x 20 mm (H) sandstone
capping
20 no $200
per
meter
at each
edge
2.8
Close turf affected area to include
Backfilling side of ground beam spread
level.
All the affected areas should be filled
back and levelled.
LS
2.9 Site cleaning and clearance after the
construction of the front face.
That involves replanting the trees
which were destroyed.
LS
3.0 Total Cost for all the Items 1.0-2.9
4.0
ADDITIONAL REQUIREMENTS
Items that are meant to meet the
specification of the project but were
not included in the part of the technical
specifications they include. LS
LS

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LS
LS
Total Cost for Item 4.0
Part B
1. Labour required for the instalment of the metal panels is based on the length of the
face to be installed. The labour charges which were calculated were done based on the
perimeter of the front fence which was to be constructed.
2. The labour of the project will be priced at the same rate. If the project was tendered
and adjusted on the original document the process of construction would be slowed
down resulting to delays. There was the deployment of skilled and unskilled labour
from the subcontractors, and the main contractor was to be in charge of the
subcontractors.
3. The construction of the project was to be halted due to the delays of supply of the
sandstone capping. The sandstone capping was manufactured by precast hence there
was the risk of delays to supply to the site. The project was to halt till the sandstone
capping were yet to be delivered. This risk can be solved by ensuring that the
suppliers are informed on the urgency under which the materials should be delivered
to the site. Also to reduce the risks it is important to ensure close supervision of the
process of delivery of the materials to the site

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Part C
1. The benefit of estimating the cost of a task.
 There are many benefits which are associated with the cost estimation before the
construction of the project as discussed below.
 The quantity and quality of the materials which are required for the task to be carried out can
be full and accurately determined before the construction of the project starts. That gives the
client a better idea of how much resources are required for the project to be completed.
 The flexibility of the task improves. Determining the number of materials, labour and other
resources which will be required for the task to be completed always there is a room which is
left for adjustments. The adjustments which will be required to be implemented during the
construction stage would have been catered for thus improving the flexibility of the task.
 The delays are reduced. Estimating the cost of the project before construction allows one to
know the estimated amount of material, labour, and other resources which will be required
during the construction period. The client or contractor assembles all the resources which are
required before construction the different parties who also will be involved in the construction
are assigned their task, and their deadlines are set of which they work to beat in that way the
delays are reduced.
 The administration of the task is fastened. The project manager or the client knows what
exactly is to be done in the project and what is needed. The project manager can come up
with the schedules on how the different tasks can be completed before the construction of the
project starts.
 The overall quality of the task improves because it allows the client or project manager to plan
in advance on how to bring on board various experts into the implementation of the project.
 It makes it easier to control (cost) finance of the project. Each of the subcontractor during the
agreement is allocated the amount of money which will enable him/her to accomplish the
work which is allocated to them. It is then the responsibility of the subcontractor to ensure that
the finance and the resources which were allocated to him/her have been managed well to
accomplish the intended task.

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 It enables the main contractor come up with system for proper labour allocation and
equipment maintenance. Once the agreement has been reached between the main contractor
and the subcontractors each of the subcontractor knows the exact amount of labour required
to enable him/her to accomplish the task which was assigned to him/her. The subcontractor is
responsible to maintain the equipment which are used by the subcontractors instead each of
the subcontractors is responsible for his/her equipment maintenance. That reduces the work
of the main contractor in maintaining the equipment.
2. Considerations which decision making on whether to tender on a project or not.
 The availability of labour, materials, and equipment which are required for the project to
be completed have a great impact on whether one is to tender the project or not.
 The available time for the project to be implemented. Time plays a very important role in
decision making on whether to tender or not. In most cases, clients tend to tender their
projects when they have insufficient time.
 The size and purpose of the project. Most people tend to tender big projects which they
cannot manage to execute on their own. Small projects in mostly are carried out by the
owners as they are easy to implement.
 The budget of the project. This is the fundamental factor which determines if one is to
tender or not. The decision of tendering has arrived if one has enough resources to tender
out.
 The type of the project. The input towards the project is greatly influenced by the type of
the project. The public and commercial projects will tend to require more materials, labour
and other resources which forces one to tend the project out. Most of the small private
projects are in most cases administered by the clients because they require very little
input which the client can manage on his/her own without necessary tendering out.1
1Thomas E. Usher and Philip Davenport, Fundamentals of Building Contract Management,(
UNSW Press,3rd Ed,2014) 67-312.

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 The available resources greatly depend on the size of the plant to be acquired to
accomplish the excavation process on site. In cases where the client or the contractor has
enough resources, he or she can be able to acquire a large and powerful plant to carry
out the excavation process.
3. Factors influencing the size of the plant required to complete the task.
 The type and size of the project.
 Massive projects are known to require deep extractions, unlike the small projects. Deep
extractions require large machines to do the excavations. Some of the projects which have
basements will require more excavations than the projects which do not have excavations
due to that they will require large and power machinery to enable them to accomplish the
depth and size of the excavation.
 The depth and size of the excavation.
 The size of the hole to be excavated has a great impact on the size of the machinery and
equipment which will be required to carry out the task. Large excavations in most cases
require large and powerful types of machinery unlike the small excavations.
 The volume of the waste soil that has to be excavated.
 The size and ability of the machinery which are required to do the excavations greatly depend
on the amount of soil that has to be excavated. Large machines are required to remove large
amounts of soils such as in the cases where the foundation of the project requires removal of
all the black cotton soils before laying the foundation.
 Type of soil to be excavated.
 The characteristics of the soil to be excavated has a great impact on the size of the plant
required to complete the excavation task. Some soils characteristics are known to complicate
the excavations process thus requiring the large plant to do the excavations.
4. The builder’s margin contents include
 Setout
 Progressive cleaning

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 Temporary services
 Insurances
 Council inspection
 Supervision
 Rubbish removal
 Access
 Safety equipment
 Site fencing

5. Reasons why engineering drawings take precedence over architectural drawings when
estimating and constructing a project.
 The engineering drawings can be used in the verification of the bill of quantities which have
been generated whereby the architectural drawings cannot be used in the verification
process.
 The ideas in the engineering drawings are logically presented which makes them be
consistent. The consistence in the engineering drawings allows the various cost estimators to
complete various parts of the quantity survey, or be continued later.
 Engineering drawings tend to be the same globally that makes it easier in coming up with a
system through which the engineering drawings can be used in the estimation of the cost of
the project. The architectural drawing lacks that aspect of uniformity which makes it very
difficult in estimating the cost of the project.
 The engineering drawings allow an engineer to be involved in generating a structure or
system that will assist in researching and developing alternative methods that will result in
cost optimization, unlike the architectural drawings.
 The engineering drawings are internationally accepted to be used in the cost and duration
estimation of different construction standard. On the other hand, the architectural drawings
are not internationally acceptable in the cost estimation process.

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6. The purpose of sub-contracting projects during the construction process.
 Improves the Product’s Quality
Subcontracting brings in much expertise from different fields into the construction of the
project. Involving the project team of members who are specialized in different fields boosts
the final product which is the project being constructed.
 To Increase Productivity
Subcontracts are well laid out, and each of the subcontractors knows what is exactly is
expected of them thus working to achieve the best within that subcontract thus increasing the
productivity of the overall project team.
 To reduce delays.
During the agreements of subcontracting both of the parties who are involved agree on the
duration which the task should be done. There are very clearly start and the deadline for the
project. All the subcontractors work to ensure that they meet the deadlines thus reducing the
delays.
 The quantity and quality of the materials which are required for the task to be carried out can
be full and accurately determined before the construction of the project starts. That gives the
client a better idea of how much resources are required for the project to be completed, and
during the subcontracting, each of the subcontractors knows the exact amount of materials he
or she requires.
 To ease the control of finances
During the process of subcontracts all the subcontractors are required to present their
proposed bill of quantities, and from there the cheapest of them with quality is selected and
then financed according to what was on the bill of quantities in that way the finances of the
project are controlled and well managed.
 To eliminate sub-used labour and equipment maintenance.

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 Each of the subcontractors knows exactly the number of employees he/she requires to
complete the intended task. Each subcontractor knows how to deal with his/. Her own labour
which and equipment which in turn reduces the sub-using different labour at different phases
of the project.2
 To allow the main contractor acquire new connections with other contractors while
developing the skills which he/she might be lacking in the company. At the same time, the
main contractor may decide to sub contract due to lack of resources such as machinery and
skilled labour.
 To give an opportunity for other developing companies to show their capability. Most of the
well-developed contractors sometimes they opt to subcontract their projects to the
developing contracts to allow them to develop their skills such as in the cases of internship
and the industrially based learning for institutions.
7. Issues of obtaining quotations from a new company or specialist traders.
 The new company or the specialist trader is likely to come up with an exaggerated bill of
quantities whereby the number of materials and labour which will be needed will be wrongly
estimated. Thus the bill of quantities which will be obtained will not be able to fully and
accurately represent the quantity of the material, labour, time and work which will be done.
 The obtained quotation cannot be used in the administration of the project because most of
the contents which are contained are wrongly calculated.
 Similar projects which will be carried out cannot use this quotation to estimate the cost and
duration of the project because most of the estimations which were carried out were
exaggerated.
2 Franklin and Andrews, Spoon’s Fabrication Norms for Offshore Structures: A
handbook for the oil, gas and petrochemical industries, (CRC Press 1st Ed, 2015) 45-294.

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 The new company or he specialised trader may be using the rates and standards which one
is not used with and in that way it will make it very difficult to interpret the contents of the
quotation thus making the quotation to be meaningless.
 The possibility of the entire project failing is increased due to the poor project administration
which may occur due to the poor quotation.
8. On-costs which are associated with the directly employed labour.
• Commissions
• Piece rate wages.
• Pension contributions
• Direct labour salaries
• Payroll tax.
9. The Conditions of a contract which may have an impact the cost of the project and are
included in the bill of quantities.
• Price variations clauses
• Validity considerations
• Payment conditions
• Penalties
• Contract change conditions
10. How to come up with the cost estimation of a project when you do not know the time involved
to carry out the work.
In the situation where the cost estimator does not know of any of the techniques which are
used to estimate the cost of a project. The best way is to use the analogous method whereby
he/she will compare different aspects of the project with the same aspect of their past similar

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project. From there after comparing the different components of the project with the current
project, it is easier to come up with an estimated cost of that project.3
Another way through which one can calculate the cost of the project is to use the individual
judgment and in that case, one is expected to use the knowledge he/she has in the
construction sector to come up with the estimation.
Computer programs are another option through which one can easily come up with an
estimation of the project cost and duration. The tutorials which can guide one on how to use
the programme can be downloaded then followed to enable one to come up with the
estimated cost of the project.
References
Justin Sweet, Marc M. Schneier, Legal Aspects of Architecture, Engineering & the
Construction Process (Cengage Learning, 8th Ed, 2015) 120-596.
3 John Mullen and R Peter Davison, Evaluating Contract Claims,( John Wiley &
Sons,2nd Ed,2014) 110-222.

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Thomas E. Usher and Philip Davenport, Fundamentals of Building Contract Management, (
UNSW Press, 3rd Ed, 2014) 67-312.
John Mullen and R Peter Davison, Evaluating Contract Claims,( John Wiley & Sons,2nd
Ed,2014) 110-222.
Franklin and Andrews, Spoon’s Fabrication Norms for Offshore Structures: A handbook for
the oil, gas and petrochemical industries,( CRC Press 1st Ed,2015) 45-294.