Lecture 10: Labour and Subcontractor Pricing

Question 1

What are the two main approaches in pricing labour?

Answer 1

1) Productivity rates - Convert takeoff quantities into labour-hour then apply wage rates and
equipment rates to the total hours to estimate prices

2) Use of unit prices - Applied to listed takeoff quantities by using RSmeans

Question 2

What basic wage depends on?

Answer 2

Location and craft

Question 3

Explain about the 3 wages type

Answer 3

1) Union wage - Contract b/w local union & contractors’ Mgmt
2) Open-shop wage - Agreement between worker and employer
3) Prevailing wage - Survey of wage in the geographic area

Question 4

What is “ Labour burden” ?

Answer 4

Additional expenses related to labour such as different kind of insurance, taxes and benefits.

Question 5

What is the challenge in estimating long-duration projects?

Answer 5

The estimator has to predict how wage rates may change over the term of longer projects for each of the different crafts used in the work.

Question 6

What is a productivity rate?

Answer 6

The number of units of work produced by labour in a unit of time (one hour, day or week).
Should be realistic -No person works 60 min/hr.

Question 7

If the task involves a crew?

Answer 7

Estimate for each member labour hourly rate (basic wage + labour burden)

Question 8

How much of the work is done by subcontractors?

Answer 8

80%

Question 9

Subcontractors pricing issues

Answer 9

1) Different subcontractors use different price bids (Lump-sum, unit price, hourly basis)
2) Interoplate works differently than GC
3) Failure to perform (banckrupcy)
4) Errors in sub-trade bids and more

Question 10

When does a list of sub-trades required for the project should be prepared and notified?

Answer 10

As soon as bid drawings and specs are obtained

Question 11

Explain what are performance bonds and bid bonds.

Answer 11

1) Performance bonds: manage construction risk
2) Bid bonds: issued by the contractor to the project owner, guarantees that the winning bidder will undertake the contract under the terms at which they bid

Question 12

What is the best way to evaluate subcontractor quotes?

Answer 12

Compare the subs’ quotes with your own estimate

Question 13

What is the best way to compare different quotes?

Answer 13

Start with the most complete quote, find out what it includes. Adjust the others quotes by adding items they miss.

Question 14

When general expense requirements can be calculated?

Answer 14

Only when the quantity take-offs are complete

Question 15

What are general expenses? Give examples important Q)

Answer 15

1. Site personnel (not associated with a specific work item)
2. Safety & first aid
3. Travel and accommodation
4. Temporary site offices
5. Hoardings and temporary enclosures
6. Temporary heating
7. Site access and storage space
8. Site security
9. Site equipment
10. Site cleanup

Question 16

How do you price site personal?

Answer 16

Multiplying the monthly payroll
cost of the personnel on the list by the number
of months they are required to be on the
project

Question 17

Which expenses may be included in safety requirements?

Answer 17

1) The cost of workers’ time when attending safety meetings
2. The cost of workers’ time when engaged in other safety-related activities
3. The provision of safety awards on the project
4. The provision of safety supplies at the site