Special Assignment #2 – Estimated Bid Price:
ASSIGNMENT REQUIREMENTS
You are required to price a project for a tender in the year 2016 for a warehouse/office using data from a previous project in the year 2010. (This special assignment has been adapted from a previous year).
The assignment is to be submitted with an assignment front sheet, signed by you (see Blackboard for proforma). Attached to this is to be the proposed tender submission and supporting calculations, stapled at the top left corner. DO NOT bind the submission or put in fancy covers or pockets. See Blackboard for further advice and proforma for the assignment front sheet.
The assignment submission is due as a hard copy and by electronic form (as an email attachment) as detailed below.
Note: Late submission will incur daily late penalty points (Refer to subject Unit Outline).
To assist in setting up this assignment an Excel workbook “2015Ass#2PricedBofQ_BidBlank.xlsx” has been
provided together with a sampler file “Ass#2_cashflow_sampler typical-1.xlsx”.
The major tasks required to complete Assignment #2 are as follows:
1. Use the price list supplied to calculate a direct cost unit price and total for the BofQ in 2016 dollar values and enter them in a new Excel worksheet using a copy of “PricedBofQ” and call it “BofQcalc”.
2. Add in to this worksheet (“BofQcalc”) a distribution of overheads, and a notional value for allowances, contingency and profit to calculate a sell price and rate for each item on the BofQ.
3. Link the rates and totals in “BofQcalc” into the Excel worksheet “PricedBofQ”. This is the priced bill of quantities for the tender submission.
4. Link the rates and totals in “BofQcalc” into the Excel worksheet “CFcalcBlank”. Use this worksheet to create a cashflow of direct costs (excluding allowances, overhead, contingency & profit) and also make a copy to create a cashflow of payments by the client (the sell price) using the facts given in these notes and the AS4000 contract terms.
5. Produce “S” curves of income and expense and a weekly cumulative cash flow graph for presentation to your company management using your cashflow of costs and client payments. Hint: The cashflow work sheet will only identify when the direct cost was incurred and when the client payments have been earned. Make sure you allow for payment lags in both the costs and the client payments. Also when you prepare the cashflow you will need to put in an allowance for the costs estimated in the next item, and then go back to put these subtotals final value into the calculation.
6. Other people in your company have prepared a list of possible risks and determine that 5.6% should be applied to the total cost as a reasonable estimate for allowances for known risks and also a contingency amount. Include these allowance and contingency amounts in the distribution in item 2. Use the cash flow in item 2 to add an allowance for financing costs for the project from start to completion.
The assignment submission will consist of the following:
You are to prepare professional standard ‘Excel’ workbooks for the following:
Calculations for a priced Bill of Quantities for a tender bid for the works. Print out your results and all your calculation details from the costing model for the assignment submission as printed sheets.
1. A priced Bill of Quantities for the project on A4 pages.
2. A cashflow table showing the schedule of contract payments by the client.
3. A graph showing the Income and Cost
4. Agraph showing the expected cash flow.
Assignment #2 – Estimated Bid Price: Team Assignment
Bestware Developments Pty Ltd, a developer (called the “Principal” in AS4000) who is a new client to your company, has requested a firm price tender for a proposed warehouse and office project. This developer does a large volume of work and your company is keen to impress them with a very professional tender. The developer has provided drawings and the following specification and BofQ for the building works to ‘lock up’ stage. Lock up stage includes earthworks, foundations, concrete slabs and carparks, steelwork, precast concrete walls and roof cladding.
Project: Warehouse & Office at Lot 15 Adams St, Menanda, Victoria 3007.
The project start date is 28 March 2016 and completion date is 26 September 2016.
Preliminaries, site establishment, Amenties and Fitout
The purchasing department of your company has obtained the following quotations. They are to be treated as single line items in the BofQ:
Preliminaries and site establishment $28,950
Site preparation & survey $8,750
Utilities and Fitout - including internal doors, internal windows, Sanitary Plumbing (i.e. above floor level), Electrical power and lighting (other than supply and installation of conduits and draw wires indicated on drawings), Carpentry, Plastering, Tiling and Painting. $32,650
The finishing trades, painting and office fitout (except for the above) are not included and will be done later by the company that leases the premises.
Your company policy for corporate overheads and profit is:
1. Add 6.5% for profit to the total estimate cost including overheads and Allowances and excluding PC sums & margin.
2. Add contingency on the total excluding profit & PC sum & margin. Amount of contingency depends on the project risks but generally is not to exceed 10%. For risks greater than 10% the company will not bid, or will seek to qualify the tender submission.
3. Add 17.5% for overheads to the total direct cost and allowancessum( excluding PC sums & margin).
4. Add 8.5% margin to PC sums for overheads, incidentals and profit (called attendance and incidentals in the BofQ)
Discussion with the Principal (owner/developer) has produced the following additional information:
The BofQ pricing for PC (Provisional Cost) sums must only contain the nominated values advised by the Principle. The percentage mark up on the PC items must not exceed the percentage nominated by the Principle for PC items.
The Principle has used a new company for the BofQ measure and is keen to hear about any percieved inconsistencies between the drawings and the quantity takeoff supplied.
As a condition of the Planning Permit, clean topsoil on the site is to be excavated, kept in a clean state free of contaminates, and carted to the local Council depot.
The principle supplied a copy of soil tests taken in each of the four corners of the site for the foundation design showing 150 mm of topsoil and then lightly consolidated (undisturbed) clayey sand to 2 metres.
The site establishment will require a portaloo, a site office and crib room with temporary power and footpath protection and temporary fencing to the street site boundary.
Unless an alternative is chosen a temporary car park area adjacent to the site office will be needed with 75mm of crushed rock hard standing from the street boundary to a distance 15 metres iside the property. This parking area can be used by staff and workers until the site office and sheds have to be moved to complete the carpark and truck access paving, at which time the new office area will be used.
The temporary carpark will also need crossover timber protection across the footpath.
The principal has agreed that measure and pricing of insitu concrete in the BofQ can include structural excavation, forms, reinforcement, concrete placing and finishing. Payment will only be made for placed and finished concrete quantities.
The Principal notes that it will only be able to pay within 30 days of receiving a approved certified payment certificate and invoice.
The defects liability period on this contract is 26 weeks from contract practical completion.
The contract form is AS4000, retention is 10% and will be retained to the end of the defects liability period of 26 weeks. See the attached extract from AS4000.
Other investigations:
A review of Principal’s reputation for paying on time (from discussions with credit agencies and other contractors), confirms that payments are likely to be paid an average of 30 days after a certified payment certificate is received. This is good news as some large clients in the industry can routinely take 60 days to pay progress claims.
It takes an average of 2 weeks for the companies supervisor to measure the work and submit a progress claim to the client and it will take the client’s manager a further 2 weeks to certify the payment. Minimum four weeks to be allowed for preparing, agreeing and processing the monthly claim for invoicing.
Your company prides itself on paying trade subcontractors and material suppliers within 14 days of an invoice and invoices are generally received within 7 days of material supply. As a result the company has loyal, well established and reliable suppliers. The accounting deparment advises that employees are paid fortnightly and the average accrual period for expenses is 3 weeks.
Most subcontractors are small businesses and they submit weekly claims for payment.
Your company bank has recently become very risk adverse due to credit tightening. As your company is not prepared to mortgage its assets it will not be able to obtain a bank guarantee to remove the retention on this contract.
The bank charges your company an interest rate on the outstanding cash flow of 9% (on overdrafts) and zero % on positive balances.
Your company has a standard model that it uses for tender cashflows and this has been supplied for you to use, along with relevant historical prices and the BofQ supplied by the client. The BofQ has been uploaded into the company standard cashflow model for you by the company planner. The formulas and set up of the model, and the planned sequence of activities, need to be checked for any inconsistencies. Any prices not included in the historical listing are to be extrapolated from similar history or otherwise estimated using analysis.