Costs Involved in Various Processes of Construction

Part 1
The process of costing projects have been used to track business profitability for a long time.
Businesses use these process to estimate costs, revenue and potential risks of each business
activity. In the construction industry, the costing system is also highly used by many large
projects and medium term rise projects. Here, the estimated costs and the budget stipulated in the
bill of quantities are compared with the actual costs considering the risks involved. This report
will analyze costs involved in various processes of construction of a medium rise project and
analyze the risks involved to enable fine tuning of the operations to generate higher profitability.
Risk assessment
Risks What can happen Risk rating
estimate
Actual costs estimate
Weather risks Rainy seasons where workers
can’t work
20% 120%
Rise of ground water hindering
excavations and compactions
10% 110%
Rain may damage works done
(eg wet paint)
10% 110%
Overhead costs of pumping water
out of construction sites
15% 115%
Time risks Delay in construction works
(delay in arrival of materials)
10% 110%

Cost risks Rise in cost of products 20% 120%
Work quality Deflective work that will require
re work
10% 110%
Double handling 10% 110%
Construction risk Construction delays 10% 110%
Unforeseen construction changes 10% 110%
Technological risk Lack of technologies 10% 110%
Management errors 10% 110%
Schedule of project expenditure
Activity Time Cost estimate in Australian
dollars
(including labor and material)
Site clearance and preparations 1 week 1500
Excavations (cutting material
for sufficient foundation
depths)
3 weeks 25000
Blinding 1 week 6200
Fixing rebar for column bases
and construction of formwork
2 weeks 98400

Casting foundation bases 2 weeks 52200
Backfilling 1 week 5200
Hardcore filling 1 week 6000
Ground floor casting 2 days 7000
Column rebar fixing 1 week 5000
Column casting 1 week 800
Fixing formwork for first floor 2 weeks 500
Fixing rebar for first floor slab 1 week 6000
Casting first floor slab 1 day 7000
Column rebar fixing 1 week 5000
Column casting 1 week 800
Fixing formwork for second
floor
2 weeks 500
Casting second floor 1 day 7000
Column rebar fixing 1 week 5000
Column casting 1 week 800
Masonry wall erection 1 month 90000
Fixing windows and doors 2 weeks 6000
Roof trussing and roofing 1 month 100000

Finishing and tiling 2 months 50000
Category 1 Category 2 Category 3 Category 4 category 5 caterory 6
0
1
2
3
4
5
6
7
Series 1
Series 1
Cost estimate curve
Interim payment claims
It is a partial payment to the contractor to avoid his bankruptcy as shown in the spreadsheet

Part 2
Variations
Variatio
n
Description Amount Remarks
1 Additional floor area of by adding
additional depth to building by one
additional bay (ie 5583).
3000 Adding the depth to the
building will increase the
projected cost of concrete
and reinforcement bars
2 Extra over pc for paint selection 200 Unforeseen extra works and
paint selection for areas that
require special paints such as
waterproof paints
3 Extra over PC for tile selection to wet
areas
200 Some areas may require
special tiling to resist effects
of water flooding, which
may b unforeseen aerial
hence leading to budget
variations.
4 Change concrete suspended first floor
slab from delta core precast panels floor
system to concrete in situ slab 257 mm
thick –stairs as steelwork staircase
5000 Changing the floor design
from precast panels which
has voids therefore reducing
the amount of concrete used.

And instead using insitu
concrete casting will increase
the cost of the projected
concrete.
5 Alter all 2nd floor windows 600 Variations in design of
windows projected for use
increases the overall costs
6 Extra over pc for balustrade to main stair
well
530 The balustrade for stairs may
be altered to suit architect
aesthetic appearances hence
altering the projected costs.
7 Alter internal doors defective work –
tiling to wet areas
900 Alterations to the door due to
defective tiling works may
increase the labor and
material costs
8 Defective work- tiling to wet areas 450 Defective works increases
the overall labour costs
9 Change paving tile to pedestrian paving 450 The change from the
budgeted paving tile to the
pedestrian paving may
increase the amount
projected.

Due to this variations, a company should ensure that miscellaneous costs are provided in the cost
estimates to cover losses that may be incurred due to construction of Cost control and
assessments of variations should also be considered and performed regularly. The estimated
costs in the bill of quantities should also be adjusted to include the variations and hence
minimize the losses on the contractor.
Part 3 Cost report
Basing from the estimated costs, expenses, risks, variations and other miscellaneous expenses,
the client may be informed of the magnitude of this construction works using projected and
actual costs of construction as shown in the spreadsheets.
.