CONSTRUCTION

PROJECT AND
MANAGEMENT
PART 2: ESTIMATES

PRESENTED BY:
ENGR. HADJI PEEJAY ARANDA
INTRODUCTION

ABOUT THE SPEAKER

- Licensed Civil Engineer ( May 2003 )
- Licensed Master Plumber ( Feb 2012 )
- BSCE ( Water Resources ) DLSU – Manila ( 2002 )
- MSCE (Water Resources ) DLSU – Manila
(ongoing)
- Principal – HP Aranda Engineering and Design
- Faculty – University of the East – Caloocan
INTRODUCTION

ABOUT THE SPEAKER

- Previous Employment:
- PropMech – GreenHeat Corp (2010 – 2011)
- TIP – QC (2007 – 2010)
- UE – Mla (2012 – 2013)
- Adamson University (2012 - 2013)
INTRODUCTION

WHAT IS ESTIMATE?
● is an expression of opinion or the prediction of the

probable future cost of certain construction

activities, usually based on some data having an
acceptable degree of reliability.

● a preliminary statement of the approximate cost for

certain works.
INTRODUCTION

● to determine the forecast cost required to complete

a project in accordance with the approved plans,
specifications and construction methods

● use of exact mathematics

● more art than science; therefore all estimates are

not exact
WHY DO WE ESTIMATE?

●
To determine the probable cost of the project as
realistic as possible

●
To determine the most probable time to complete
the project
TYPES OF ESTIMATES

APPROXIMATE ESTIMATE

●
are sufficiently accurate for the evaluation of design
alternatives, or the presentation of preliminary
construction estimates to the owner, but are not
sufficiently accurate for bid purposes.

●
a more liberal view of quantities and prices may be
taken.
TYPES OF ESTIMATES

DETAILED ESTIMATE

●
Sometimes called final or definitive estimate.
●
It is prepared by determining the cost of materials,
labor, equipment, overhead, profit, and VAT in
detail per items of work based on the approved
design/construction plans, specifications and
construction methods.
TYPES OF ESTIMATES

DETAILED ESTIMATE

The objective is usually to determine the smallest

quantity and the keenest price for the various items
of work in the project. Usually prepared by the owner,
contractor, sub-contractors and suppliers prior to
bidding or on negotiating to do the work.
PURPOSES OF ESTIMATES

Though the general purpose of estimate is to

determine the COST, there are a lot of reason that
this must be done in accordance to the interest of the
project stake holders
PURPOSES OF ESTIMATES

FOR THE OWNER

●
To determine Economic Feasibility
●
To determine Capital Investment
●
To Assist in Financial Arrangement
●
Planning and Scheduling
●
Basis for ABC
PURPOSES OF ESTIMATES

FOR THE DESIGNER

●
Aid in site selection
●
Aid in choosing alternative design
●
Aid in determining design scheme
PURPOSES OF ESTIMATES

FOR THE CONTRACTOR

●
Basis of Bid Price
●
Progress Billings
●
Planning and Scheduling
PREPARING APPROXIMATE
ESTIMATE

Since there is little information other than the basic

design concept at the start of the project, the
importance of knowing the approximate cost is still
very much needed since this is the stage in which the
economic feasibility of the project will be made.
PREPARING APPROXIMATE
ESTIMATE

The accuracy of approximate estimate will depend

upon the availability of information known about the
project.

This is the part where experience and number of

similar projects made will come in.
PREPARING APPROXIMATE
ESTIMATE

One good example of approximate estimate is called

the Broad scope estimates. This is a function of the
costs of similar projects done previously.
Mathematically this is done by
ESTIMATING
A+ 4 B+C
UC= CONSTRUCTION COST:
6 PEURIFOY AND
OBERLENDER 6th Ed
A – Min cost of previous project P 68
B – Ave cost of previous project
C – Max cost of previous project
PREPARING APPROXIMATE
ESTIMATE

Ex.
A rough estimate of for a 2-storey commercial
building is needed by a prospective client during an
exploratory meeting with a contractor. After
describing initially the requirements of the client the
contractor mentally notes the costs of similar projects
that he made before
A+ 4 B+C
UC=
6
PREPARING APPROXIMATE
ESTIMATE

PROJECT COST
1 PHP 5,645,956.00
2 PHP 4,376,467.00
3 PHP 8,325,325.00
4 PHP 6,345,214.00
5 PHP 7,349,219.00
From the given we have
A = 4,376,467.00
B = 6,408,436.20 C = 8,325,325.00
PREPARING APPROXIMATE
ESTIMATE
A+ 4 B+C
Using the equation UC=
6
4,376,467.00+4∗6,402,436.20 +8,325,325.00
We have UC= 6

UC = 6,389,256.13
PREPARING APPROXIMATE
ESTIMATE

Ex:
The material cost of a two storey building in 2014
was 6,500,000.00 as agreed upon by the contractor
and the client. In 2017, the same contractor was
asked by another client for the estimated cost of a
similar project to be done. What will be the rough
estimate using the construction price index
PREPARING APPROXIMATE
ESTIMATE

From the Philippine Statics Authority

CPI (2014) = 227.3
CPI (2017) = 232.3

CPI current n
=(1+i)
CPI past

232.3 3
=(1+i)
227.3
PREPARING APPROXIMATE
ESTIMATE

√
3 232.3 3
227.3
= √(1+i)
3

1.007279=(1+i)
3
Estimated cost 2017 =6,500,000.00 (1.007279)
Estimated cost 2017 =6,642,976.20
The value may not seem much since the index used is
the overall item. It would be better if the price index for
EACH materials will be used in making the rought
estimate
PREPARING APPROXIMATE
ESTIMATE

Ex:
The cost of a two storey building in 2014 was
6,500,00.00 as agreed upon by the contractor and
the client. In 2017, the same contractor was asked by
another client for the estimated cost of a similar
project to be done. What will be the rough estimate
using the construction price index
PROGRAM OF WORK

To determine the total estimated cost of the projects

that covers the civil works construction, Engineering
Supervision and Administrative Overhead, Road
Right of Way Acquisition Cost, Construction
Contingency, etc.

It shall include the information on the quantity and

unit cost for each item of work, construction duration,
funding source, equipment requirements, etc.
PREPARING DETAILED
ESTIMATES
THE PROCESS FOR PREPARING DETAILED
ESTIMATES ARE AS FOLLOWS
Review the
scope of work Pricing of Pricing of
labor equipment
Review of the
materials Pricing of the Calculate
Summarize
specifications material mark-up

Review of the Determine Calculate Calculate

construction the profit VAT
methodology quantities
PROGRAM OF WORK

It shall include the information on the quantity and

unit cost for each item of work, construction duration,
funding source, equipment requirements, etc.
PROGRAM OF WORK

Specifically, the Program of work will often

identify:
• Dates and durations allocated to tasks.
• A critical path (the sequence of critical tasks upon
which the overall duration of the program is
dependent).
• Tasks which can only be carried out after other
tasks have been completed.
PROGRAM OF WORK

• Tasks which can be carried out simultaneously.

• 'Float' within tasks that are not on the critical path
(that is, delays that can be incurred without affecting
the critical path).
Identifying float can be helpful in highlighting where it may be
possible to transfer resources to tasks that are on the critical
path.
• The need for specific resources such as plant,
services or materials and their lead time.
PROGRAM OF WORK

Preparing the program of work should not be a paper

exercise that simply records what has already
happened or what is likely going to happen.

For a POW to be effective, it must be used as a tool

to help plan activities, monitor progress and identify
where additional resources may be required.
REVIEW OF MATERIALS
SPECIFICATIONS
On the designer’s point of view, specifying the types
of materials to a particular project is important with
considerations to the following:
✔
ECONOMY
✔
QUALITY
For contractors, the same considerations must apply
while at the same time it must satisfy the
parameters set by the designer/consultant
REVIEW OF THE CONSTRUCTION
METHODOLOGY

The purpose of a Construction Method Statement is

to:
●
Formalize who is responsible for completing the work
●
Set out the approach, processes and program
proposed for constructing and stabilizing the
PROJECT
●
Identify any unusual items or methods of working that
are required.
REVIEW OF THE CONSTRUCTION
METHODOLOGY

Contractors and developers are familiar with preparing

construction method statements for a wide variety of
purposes, not least to manage health and safety and
contractual risks on construction sites.
In terms of health and safety, the method statement
details a safe system of work. It identifies the hazards
that may arise during construction and the measures
that are to be taken to ensure the hazards do not pose
an unacceptable risk to workers and the public.
REVIEW OF THE CONSTRUCTION
METHODOLOGY

Method statements for some projects are necessary

because many people in the construction industry are
not familiar with the specific requirements for
constructing the project and some of the
requirements are contrary to accepted practice in
some fields
REVIEW OF QUANTITIES

The bill of quantities (sometimes referred to as 'BoQ')

is a document prepared by a quantity surveyor that
provides project specific measured quantities of the
items of work identified by the drawings and
specifications in the tender documentation.
The quantities may be measured in number, length,
area, volume, weight or time. Preparing a bill of
quantities requires that the design is complete and
a specification has been prepared.
REVIEW OF QUANTITIES

The bill of quantities is issued to prepare a price for

carrying out the works. The bill of quantities assists
tenderers in the calculation of construction costs for
their tender, and, as it means all tendering
contractors will be pricing the same quantities (rather
than taking-off quantities from the drawings and
specifications themselves), it also provides a fair and
accurate system for tendering.
PRICING

The bill of quantities is issued to prepare a price for

carrying out the works. The bill of quantities assists
tenderers in the calculation of construction costs for
their tender, and, as it means all tendering
contractors will be pricing the same quantities (rather
than taking-off quantities from the drawings and
specifications themselves), it also provides a fair and
accurate system for tendering.
PRICING

• Cost of Materials
DIRECT COST • Cost of Labor
• Equipment Expenses

• Overhead Expenses
• Contingencies
INDIRECT COST • Miscellaneous Expenses
• Contractor’s Profit
• VAT
PRICING

Cost at source:
processing, crushing, stockpiling, loading,
royalties, local taxes, construction and/or
maintenance of haul roads, etc.
MATERIALS
Expenses for hauling to project site
COMPONENT
Handling expenses COST
Storage expenses CONSIDERATION
Allowance for waste and/or losses
(not to exceed 5% of materials
requirement)
PRICING
a. ESTIMATED TRAVEL SPEED, LOADING/ UNLOADING
& ALLOWANCE FOR DELAY

TERRAIN ROAD DUMP TRUCK TRAVEL SPEED (km./hr.)

CONDITION CONDITION LOADED EMPTY
PAVED 35 55
FLAT
UNPAVED 30 45
PAVED 30 40
ROLLING
UNPAVED 25 35
PAVED 20 30
MOUNTAINOUS
UNPAVED 15 25
LOADING TIME (min.) 3 min.
UNLOADING TIME (min.) 2 min.
ALLOWANCE FOR DELAY (min.) 10% of Cycle Time
PRICING

b. FORMULA FOR THE CALCULATION OF DUMP TRUCK TRAVEL TIME

T = D÷R
Where :
T = Time, Time of Travel (hr.)

D = Distance, Hauling Distance (km.)

R = Rate, Travel Speed (km./hr.)

PRICING
c. COMPUTATION OF CYCLE TIME, T
Example: Average Hauling Distance = 2.00 kilometer
Flat, Unpaved
Average Haul Distance = 2.00 kilometer
Loading Time = 3.00 min.
Loaded Travel Time
First 200 m @ 20 kph = 0.60 min.
Succeeding 1600 m @ 30 kph = 3.20 min.
Next 200 m @ 20 kph = 0.60 min.
Unload and Manuever = 2.00 min.
Return Empty
First 200 m @ 30 kph = 0.40 min.
Succeeding 1600 m @ 45 kph = 2.13 min.
Next 200 m @ 30 kph = 0.40 min.
Cycle Time, T = 12.33 min.
Allowance for Delay = 1.23 min.
Total Cycle Time, T = 13.56 minutes
PRICING

Prevailing unit price of materials periodically

generated by the Regional Offices/District
Offices

Canvassed price of construction materials from

various suppliers
UNIT PRICE OF
Unit Price from the previously approved POW
MATERIALS and ABC

Time motion analysis and computation for

processed materials such as quarrying,
screening and hauling. This includes hauling
cycle, Free Haul Distance, etc.
PRICING
PRICING

Standard Specifications for Highways, Bridges

and Airports, revised 2013, Standard
Specifications for Public Works, 1995

Approved Special Specifications for the MATERIALS

project APPLICATION
Manufacturer’s Specifications
RATE

Established quality requirements to satisfy

the specifications of civil works items of work
PRICING

Minimum Wage Rates – basic wage plus cost of

living allowance based on a normal 8-hour work
per day as determined by RTWPB, NWPC, DOLE.
The Minimum Wage Rates for each Region,
Provinces, or Cities are based from the latest
LABOR minimum wage rates as approved by NWPC.
RATES
Workers Statutory Monetary Benefits – monetary
benefits for the workers in a private sector,
regardless of their employment status (e.g.,
probationary, regular, contractual, project bases) as
mandated by law.
PRICING
SCHEDULE OF LABOR RATES
DPWH - NCR - NATIONAL CAPITAL REGION
LOCATION: All Areas in NATIONAL CAPITAL REGION As of October 2016
BASIC WAGE SOCIAL BENEFITS
LABOR 13TH
RESOURCE RATE PER RATE PER RATE PER
DESCRIPTION COST LEAVES MONTH PHIL-
CODE NO. DAILY MONTHLY SSS MONTH DAY HOUR
FACTOR PAY HEALTH PAG-IBIG
1 Foreman 1.80 883.80 23,052.45 368.25 1,921.04 1,208.70 287.50 100.00 26,937.94 1,032.76 129.10
2 Leadman 1.65 810.15 21,131.41 337.56 1,760.95 1,208.70 262.50 100.00 24,801.13 950.84 118.86

Heavy Equipment
3 1.50 736.50 19,210.38 306.88 1,600.86 1,208.70 237.50 100.00 22,664.31 868.92 108.61
Operator

Highly Skilled
4 1.50 736.50 19,210.38 306.88 1,600.86 1,208.70 237.50 100.00 22,664.31 868.92 108.61
Operator

5 Light Skilled Operator 1.40 687.40 17,929.68 286.42 1,494.14 1,208.70 212.50 100.00 21,231.44 813.98 101.75

6 Driver 1.30 638.30 16,648.99 265.96 1,387.42 1,208.70 200.00 100.00 19,811.07 759.53 94.94
7 Skilled Laborer 1.30 638.30 16,648.99 265.96 1,387.42 1,208.70 200.00 100.00 19,811.07 759.53 94.94

8 Semi-Skilled Laborer 1.20 589.20 15,368.30 245.50 1,280.69 1,171.80 187.50 100.00 18,353.79 703.66 87.96

9 Unskilled Laborer 1.00 491.00 12,806.92 204.58 1,067.24 967.70 150.00 100.00 15,296.44 586.45 73.31
PRICING

Acceptable output in the Department

and the construction industry based on
historical data and other references.
LABOR
OUTPUT
Submitted construction methodology.
PRICING OF THE MATERIALS

The prevailing “Associated Construction

Equipment Lessors, Inc.” (ACEL) rental
rates approved for use by the DPWH.

EQUIPMENT Rental rates of equipment not indicated in

the ACEL booklet is taken from the rental
RENTAL rates prepared by the Bureau of
RATES Equipment.

Rental rates from previously approved

ABC and other source from private
companies.
PRICING
PRICING OF THE MATERIALS

It shall be treated as a separate pay

item, and shall be computed based on
the equipment requirements of the
EQUIPMENT project as stipulated in the proposal
MOBILIZATION and contract booklet.

AND
DEMOBILIZATION In no case should mobilization and
demobilization exceed 1% of the
Estimated Direct Cost (EDC) of the civil
works items.
PRICING OF THE MATERIALS

CONTRACTOR’S
PROFIT

VAT
INDIRECT OCM
COSTS

Computed at 10% of the sum of the • Overhead Expenses

Estimated Direct Cost (EDC), Overhead, • Contingencies
Contingencies & Miscellaneous
Expenses (OCM) and Profit. • Miscellaneous Expenses
PRICING OF THE MATERIALS
INDIRECT COST
% FOR
OCM AND PROFIT TOTAL
INDIRECT COST
ESTIMATED % FOR
DIRECT COST (EDC)
OCM PROFIT OCM AND
(% OF EDC) (% OF EDC) PROFIT

Up to P5Million 15 10 25
Above P5M up to
P50M 12 8 20
Above P50M up to
P150M 10 8 18
Above P150M 8 8 16
FACTORS TO BE CONSIDERED
IN ESTIMATES

Fluctuation of
Materials Cost
Weather Condition Wastage Factor

Swell/Shrinkage FACTORS Traffic Condition

Factor

Peace and Order

Terrain Condition
Condition
PRICING OF THE MATERIALS
REFERENCES:
OCRAY, Robie ST (2016)
A PRESENTATION ON CONSTRUCTION ESTIMATES
(GPM711 MCM UNIVERSITY OF THE EAST – MANILA)

DPWH (2016)
MANUAL ON COST ESTIMATION FOR SCHOOL BUILDINGS (BUREAU OF CONSTRUCTION)

PEURIFOY AND OBERLENDER (2014)

ESTIMATING CONSTRUCTION COST
MCGRAW HILL

ARANA, F (2017)
ESTIMATES (BUDGETARY)
MEPF PRESENTATION

CIRIA RP992
The SuDS Manual Update: Paper RP992/22
PRICING OF THE MATERIALS
FOR QUESTIONS OR FOR COPIES OF PRESENTATION
PLEASE EMAIL ME AT”

[email protected]
PRICING OF THE MATERIALS
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PRESENTATION MATERIALS

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