CM 3111 Exam 1
Unit Price Bid
A bid that is presented as what will be charged per unit.
Project Manual
A bound booklet that contains the contract documents, with the exception of the drawings, specifically organized into bid requirements, contract information, general conditions for constructions and technical specifications
Retainage
A certain percentage of the payments customarily held back by the owner as protection for the owner to ensure the completion of the contract and payment of the contractor's financial obligations. Usually around 10 %.
Direct Field Cost
A cost that consists of equipment, materials, and direct hire or subcontractor labour directly associated with a particular item of work or activity at the field for construction of the permanent facility.
Quantity Takeoff
A detailed measurement of materials and labor needed to complete a construction project. They are developed by an estimator during the preconstruction phase. These measurements are used to format a bid on the scope of construction.
Project Manual
A document that accompanies the drawings and includes information on how to bid the project, the contractual obligations of the successful contractor, and the specifications for the materials used in the construction.
Work in Place
A percentage of the work that has been completed.
Surety
A person who guarantees payment of another party's obligations.
Front-End Loading
A practice where contractors overvalue the initial items on the project to generate additional cash flow early in the project to cover the construction costs and undervalue items performed at the end of the project.
Design Drawings
A single-line floor plan and key elevations.
Schedule of Values
A statement that shows sales prices for specific items within the project. This statement breaks the project into quantifiable components.
Material Takeoff
A term used in engineering and construction, and refers to a list of materials with quantities and types (such as specific grades of steel) that are required to build a designed structure or item.
Conceptual Estimate
An estimate prepared by a contractor based on the project's early plan. Usually drawings are limited or not available for this type of estimate. The contractor makes assumptions about virtually every aspect of the project. This estimate is used early in the design process to check if the owner can actually afford the project.
Detailed Estimate
An estimate that includes determination of quantities and costs of everything that is required to complete the project. (labor, materials, equipment, insurance, bonds, overhead, and an estimate of the profit) The contractor must have a complete set of contract documents for this type of estimate.
Preliminary Estimate
An estimate that is prepared and maintained by the contractor during the design process based on the current, but incomplete design.
Construction Specification Institute (CSI)
An organization that formed in 1948 to improve the quality of construction specifications, they have developed a standard format for organizing the specification known as the MasterFormat, which consists of 50 divisions for specific areas in construction.
Statutory Bonds
Bond forms that conform to a particular governing statute; They vary from one jurisdiction to another.
Nonstatutory Bonds
Bonds used when a statutory form is not required.
Indirect Field Cost
Costs that do not become a permanent part of the project but are required for the completion of the work. This Cost includes but is not limited to field office administration, direct management and supervision, temporary facilities, construction equipment and small tools, start-up costs, insurances and taxes etc.
Shop Drawings
Drawings that show the sizes of materials and installation details.
Notebook
Each estimate prepared should have this. It should be broken down into several areas: the workup sheets, summary sheets, errors and omissions sheets, proposals received from subcontractors, proposals received from material suppliers and manufacturers' representatives, and notes pertaining to the project.
Square-Foot Estimates
Estimates that are prepared by multiplying the square footage of a building by a cost per square foot and then adjusting the price to compensate for differences in the building heights, length of the building perimeter, and other building components. This type of estimate is helpful to check whether the project, as designed, is within the owner's budget.
Historical Data
For matters relevant to estimating and costs, the best source of information is _______________________.
Design-Bid-Build (DBB)
For these kinds of projects, the General Contractor makes detailed estimates that are used to determine what the company will charge to do the work.
Design-Build (DB) or Construction-Manager (CM) Delivery Systems
For these kinds of projects, the General Contractor's scope of work involves providing assistance to the owners, beginning with the planning stage, and continuing through the actual construction of the project.
Liquidated Damages
Getting Penalized for being late on a project.
Cost-Plus-Fee Agreements
In these agreements, the contractor is reimbursed for the construction costs as defined in the agreement. However, the contractor is not reimbursed for all items.
Lump-Sum Agreement
In this agreement, the contractor agrees to construct the project in accordance with the contract documents, for a set price arrived at through competitive bidding or negotiation. The contractor agrees that the work will be satisfactorily completed regardless of the difficulties encountered.
Unit-Price Agreement
In this agreement, the contractor bases the bid on estimated quantities of work and on the completion of work in accordance with contract documents.
Integrated Project Delivery (IPD)
In this delivery system, a relatively new delivery system, involving the owners, designers, contractor and some of the key subcontractors in the design process. Owners, Designers, Contractor and Key Subcontractors all share governance, risk, contingency, and the profit on the project.
Design-Build Delivery (DB)
In this delivery system, the contractor acts as both the designer and the general contractor.
Construction Manager Delivery (CM)
In this delivery system, the contractor and some of the key subcontractors are involved in the design process, providing expertise in construction methods and costs, as well as managing the construction process.
Assembly Estimating
In this type of estimating the estimator bids the components in groups. This type of estimate can be prepared in hours instead of days, but this estimate has many broad assumptions and is less accurate.
OnScreen Takeoff
Is a collection of programs, processes and information used to perform a part of the cost estimating process in the construction industry.
Subcontractors
May be individuals, companies, or corporations hired by the general contractor to do a particular portion of the work on the project.
Estimator
Often involved solely with the estimating of quantities of materials and the pricing of the project.
3-7%
On Residential and Commercial Construction, there is normally a ______________ % Profit Margin. Industrial Construction has a higher Profit Margin.
Superintendent
On large construction projects, this person's job is to run the day-to-day operations on the construction site and control the short-term schedule. This person's role also includes important quality control and subcontractor coordination responsibilities.
Progress Payments
Payments that are based on the completed work and stored materials. Because of the cost and duration of construction projects, contractors must receive these payments as work is completed.
Final Payment
The amount of retainage withheld throughout the construction period that is given to the contractor upon project completion.
Building Construction Estimating
The determination of probable construction costs of any given project.
Organization
The estimator must maintain a high degree of ________________ throughout the estimate development stage.
Takeoff
The process in which detailed lists are compiled, based on drawings and specifications, of all the material and equipment necessary to construct a project. The cost estimator uses this list to calculate how much it will cost to build the project.
Specifications
The written descriptions of materials, construction systems, and workmanship. The purpose of these are to define the quality of materials and the results to be provided by the application of construction methods.
Professional Quality Surveyor
These are for-hire firms or individuals who make unit quantity takeoffs of the materials required to build a project.
Project Management Companies
These companies specialize in providing professional assistance in planning the construction of a project and keeping accurate and updated information about the financial status of the project.
Project Comparison Estimates
These estimates are prepared by comparing the cost of a proposed project to a completed project. The estimator starts with the costs of a comparable project and then makes adjustments for differences in the project.
Parametric Estimates
These estimates use equations that express the statistical relationship between building parameters and the cost of the building. The equations used in these estimates are very complex and may use log functions, ratios of parameter, and multiplication of parameters.
Manufacturer's Representatives
These people represent certain materials, product suppliers, or manufacturers. They visit construction sites and make certain that their product is available and well known by most all of the different people on a construction site. They are salespeople with expertise in their product lines and are welcomed not as salespersons, but as needed sources of information concerning the materials and products they represent.
Freelance Estimators
These people will do a material takeoff of a portion or entire project for whoever may want a job done. In some areas, these people will do material takeoffs of a project being competitively bid on and then sell the quantity list to one or ore contractors who intend to submit a bid on the project.
Subcontractor Bond
These protect the prime contractor against financial loss and litigation due to default by a subcontractor.
Reporting Services
These provide information about projects that are accepting bids or proposals.
Contract Documents
These set out the obligations and responsibilities of the parties to the contract.
Marine Insurance
This Insurance policy covers equipment used in waterways, such as barges and boats and provides similar protection as automotive insurance.
Errors and Omissions Insurance
This Insurance policy covers liability arising from errors or omissions by the designers of a project.
Commercial General Liability Insurance
This Insurance policy covers liability arising out of negligent actions by the contractor and the company's employees, and includes bodily injury, property damage or loss, and other personal injury such as slander or damage to reputation.
Inland Marine Insurance
This Insurance policy covers off-road construction equipment, such as backhoes, scrapers, and dump trucks not licensed for use on public road sand provides similar protection to auto insurance.
Property Insurance
This Insurance policy covers real property owned by the contractor, such as office buildings, shops, and warehouses.
Business Personal Property Insurance
This Insurance policy covers the contents of a building, such as computers and furniture.
Automotive Insurance
This Insurance policy covers vehicles used on public roads including cars, trucks, portable office trailers used on the job site, and construction equipment that drives on public roads, such as dump trucks.
Umbrella Insurance
This Insurance policy goes on top of all the company's insurance, increasing the limits of coverage.
Life Insurance
This Insurance policy may be taken out by a company for key personnel where the company is the beneficiary to protect the company against losses due to the death of the employee
Builder's Risk Insurance
This Insurance policy protects projects under construction against direct loss due to fire and lightning. This insurance also covers temporary structures, shed and equipment stored at the site.
Worker's Compensation Insurance
This Insurance policy provides benefits to employees or their families if they are killed or injured during the course of work.
Single Contract
This contract comprises all work required for the completion of a project and is the responsibility of a single, General Contractor. This centralization of responsibility provides that one of the distinctive functions of the General Contractor is to plan, direct and coordinate all parties involved in completing the project.
Working Drawings
This document consists of the actual plans (drawings, illustrations) from which the project is to be built. It contains the dimensions and locations of building elements and materials required, and shows how they fit together.
Technical Specifications
This document contains written instructions concerning the project requirements that describe the quality of the materials to be used and their performance.
General Conditions
This document defines the rights, responsibilities, and relations of all parties to the construction contract.
Owner-Contractor Agreement
This document formalizes the construction contract, and it is the basic contract. It incorporates by reference all of the other documents and makes the part of the contract.
Invitation to Bid
This document invites potential contractors to bid on the project and provides a brief summary of the project, including project scope and size, location, project's owner, and more.
Addenda
This document is a drawing or information that modifies the basic contract documents after they have been issued to the bidder, but prior to the taking of bids. They may provide clarification, correction, or changes in the other documents.
Bid Form
This document is a standard form that all contractors use to submit their bids.
Supplementary General Conditions (Special Conditions)
This document is used to amend or supplement portions of the general conditions, because conditions vary by locality and project.
Instructions to Bidders
This document provides bidders with the procedures that must be followed to submit a complete bid and contains such information as date, time, and the place the bid is due, attendance at pre-bid meetings and more.
Bid Bond
This ensures that if a contractor is awarded the bid within the time specified, the contractor will enter into the contract and provide all other specified bonds.
Fixed Fee
This fee consists of a contractor that is being paid a fixed fee for the project regardless of the cost of the project.
Fixed Fee with Guaranteed Maximum Cost
This fee consists of a contractor who is paid a fixed fee for the project, but also guarantees that the construction cost will not exceed a specified amount.
Percentage Fee
This fee consists of the contractor's fee being based on a specified percentage of the construction cost.
Sliding Scale Fee
This fee decreases as the costs increase. This fee provides an answer to the disadvantage of the percentage fee.
Performance Bond
This guarantees the owner that the contractor will perform all work in accordance with the contract documents and that the owner will receive the project built in substantial agreement with the documents.
Payment Bond
This guarantees the payment of the contractor's bill for labor and materials used or supplied on the project.
Public Advertising for Bids
This is required for many public contracts. Generally through Newspapers, Trade Magazines, Journals, and Notices posted in public places or the internet.
License or Permit Bond
This is required of the prime contractor when a state law or municipal ordinance requires a contractor's license or permit.
Bidding Period
This is the time period after the basic contract documents have been issued to the bidders and before the bids are due.
Change Order
This is work that is added to or deleted from the original scope of work of a contract, which alters the original contract amount and/or completion date.
Suppliers
This person submits price quotes to the contractors and subcontractors to supply the materials required for the construction of the project. Virtually every material used in the project will be estimated, and multiple price quotes will be sought.
R.S. Means
This provides cost information to the construction industry so contractors in the industry can provide accurate estimates and projections for their project costs. It has become a data standard for government work in terms of pricing, and is widely used by the industry as a whole
Profit Margin
This provides the General Contractor an acceptable rate of return and compensation for the risk associated with the project.
Scope of Work
This should reference the drawings, the project manual, and all addenda issued before the execution of the agreement.
Proposal Form
This stipulates the price for which the contractor agrees to perform all of the work described in the contract documents.
Competitive Bidding
This type of bidding involves each contractor submitting a lump-sum bid or a proposal in competition with other contractors to build the project.
Model Estimating
This type of estimating uses computer models to prepare an estimate based on a number of questions answered by the estimator. The model makes many assumptions about the design of the project that it is working on and avoids the site and excavation cost.
Fixed Fee with a Bonus and Penalty
This type of fee has a contractor who is reimbursed the actual cost of construction plus a fee.
Negotiated Bidding
Type of bidding where the parties arrive at a mutually agreed upon price, terms and conditions, and contractual relationship.
Contract Sum
Under a Lump-Sum Agreement, the ___________________ is the amount of the accepted bid or negotiated amount.
Separate Contracts
Under this system of contracts, the owner signs several different agreements for the construction of various portions of a project.
1) Review of the Construction Documents 2) Site Visit 3) Divide into work Packages 4) Schedule the Estimate
What are the 4 key activities for planning the estimate?
1) Reject any or all bids 2) Accept a bid other than the lowest 3) Reject any proposal not prepared and submitted in accordance with the contract documents.
When Awarding the Bid, the Owner reserves the right do to what 3 things?
Lowest Lump-Sum
When a Competitive Bidding project is awarded based on the price, the _____________________ bidder is awarded the contract to build the project.
Bonds
Written documents that describe the conditions and obligations relating to the agreement. This is not a financial lone or insurance policy, but serves as an endorsement of the contractor.
