Hey Steemians I have already shared half the whole construction process and demonstrated you how the quanitty surveyor get involved. Last time I introduced you the tendering stage in the view of Employer's QS (Consultancy firm), today I wanna introduce you how the Contractor's QS representative to bid for the tender. We always say Bidding is an art, with many calculation and strategy behind. Imagine that if you bid for too high, you lose the tender, but on the other side if you bid for too low, you win the tender but you lost money! Thereby, a good estimator is a rare asset to the Contractors, without them they are highly unlikely to win any jobs or keep losing money from winning the tenders!
The following demonstration is set up based on a traditional contract -
- Checking the Quantities
Once you received the full set of drawing as well as the BQ provided by the Employer, you have to check the quantities on the BQ very carefully. As I said the quantities are all taken by a quantity surveyor, human makes mistakes, there must be something wrong, what we are looking for is missing items, error description, and the most important element - underestimated quantity .
Imagine that the BQ contains like Apple x 1, Orange x 1000, but after your checking you found out that actually there should be 1000 nos of Apple. We will then say Bingo!!! That's what we gonna find! Why? Coz pricing a very high rate on the Apple doesn't make your tender sum to be great increased due to the underestimated quantity, but when the works started, you will claim for the additional 999 no. of apple (we called this Variation Order ), which has to be valued based on the BQ rate that you priced for.
Thereby, for this tender you may price something like $1,000 per Apple, but $50 per Orange -
Your Tender Sum = $1,000 x 1 + $50 x 1,000 = $51,000.00
But, after the tender is awarded, indeed the contract sum will be turned to be >
$1,000 x 1,000 + $50 x 1,000 = $1,050,000 !!!
那現在就下價來大家看看了 ，比方說我下價$1,000 一個蘋果, $50一個橙
那我的標書價錢會是 $1,000 x 1 + $50 x 1,000 = $51,000.00
所以最後你由$51,000的標總價 變成了$1,000 X 1,000 + $50 x 1,000 = $1,050,000 !!!!
- Cost allocation for better cash flow
In order to maintain a good cash flow, after we price the whole BQ, we will then make some cost allocation, one of the common technique namely "front-loading", we will prize the preliminary items and the initial stage items like excavation, piling, for a higher rate, and price those finishing and fitting out works at a relatively lower rate in order to get back the cash earlier.
Of course there still many pricing strategy and mechanism behind the bidding system, many researchers study and aim to formulate different bidding system in order to maintain a good winning rate for their company. Today I will just share you two of them that I think is the most interesting part, and I hope you enjoy it :)