CVE 4070

Construction EngineeringProject CloseoutProf. Ralph V. Locurcio, PE

Homework due… H-1 Career Day – due 10/14/04 Pyramid Schedule – due 10/14/04 H-2 Summary Ch 4 – due 10/21/04 Pyramid Cost Estimate – due 10/28/04 H-3 Summary Ch 18 – due 11/02/04 Construction Cost Estimate – due 11/04/04 Quiz #3 – 11/09/04 H-4 Your Resume – due 11/11/04 Quiz #4 – 11/18/04 Notebook turn in – 12/02/04

Quiz & Critique…

Question #1

1.You are the owner’s representative on a construction project. You have plotted the chart below to control the cumulative costs on your project. Check the appropriate box below to indicate whether you are ahead or behind schedule at Weed 5 & Week 11. (10pts) Cum - S$ = $$ scheduled; Cum - A$ = $$ actually spent

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Cum - S$

Cum - A$

Week 5: [ ] ahead [ ] behind Week 11: [ ] ahead [ ] behind

Question #1-solution

1.You are the owner’s representative on a construction project. You have plotted the chart below to control the cumulative costs on your project. Check the appropriate box below to indicate whether you are ahead or behind schedule at Weed 5 & Week 11. (10pts) Cum - S$ = $$ scheduled; Cum - A$ = $$ actually spent

0

200

400

600

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1200

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Cum - S$

Cum - A$

Week 5: [ ] ahead [ ] behind Week 11: [ ] ahead [ ] behind

S A

A S

X X

Question #22. There are two general types of contracts used in construction: “Fixed Price” and “Cost Plus”. Check the terms that describe each in terms of the scope of work, pricing,

changes, ease of administration and risk to the owner. (10 pts) Fixed Price Cost Plus

Scope ___known ___unknown ___known ___unknown Price ___low bid ___time & materials ___low bid ___time & materials

Changes ___few/none ___frequent ___few/none ___frequent

Admin ___easy ___difficult ___easy ___difficult

Risk ___low ___high ___low ___high

Question #2-solution2. There are two general types of contracts used in construction: “Fixed Price” and “Cost Plus”. Check the terms that describe each in terms of the scope of work, pricing, changes, ease of administration

and risk to the owner. (10 pts)

Fixed Price Cost Plus

Scope _X_known ___unknown ___known _X_unknown Price _X_low bid ___time & materials ___low bid _X_time & materials

Changes _X_few/none ___frequent ___few/none _X_frequent

Admin _X_easy ___difficult ___easy _X_difficult

Risk _X_low ___high ___low _X_high

Question #33. Number the actions below to show the proper sequence for making a change order on your construction contract. (10 pts)

___Notice to proceed issued to contractor ___Identification of need for change___Cost of change is negotiated ___Initiator prepares detailed scope___Justification approved by owner ___Owner agrees & signs change document ___Designer of record approves ___Work begins on the change order

Question #3-solution3. Number the actions below to show the proper sequence for making a change order on your construction contract. (10 pts)

_7__Notice to proceed issued to contractor _1__Identification of need for change_5__Cost of change is negotiated _3__Initiator prepares detailed scope_2__Justification approved by owner _6__Owner agrees & signs change document _4__Designer of record approves _8__Work begins on the change order

Question #44. The two broad types of estimates used in construction are conceptual and detailed; when are they used and what percent (%) accuracy you can expect from each. (10 pts)

Conceptual:________________________________________________________________________________________________________________________________________________________Detailed:___________________________________________________________________________________________________________________________________________________________

Question #4-solution4. The two broad types of estimates used in construction are conceptual and detailed; when are they used and what percent (%) accuracy you can expect from each. (10 pts)

Conceptual: Used for feasibility, planning, programming and budgeting studies; expect accuracy around +25% of actual cost.

Detailed: Used for construction cost estimates, bidding, change orders and final design; expect accuracy < 10% of final bid value.

Question #5 5. You have been asked to prepare a conceptual cost estimate for the construction of a new university library at Florida Tech to open in 2008. The 2004 RS Means data that you have suggests a cost of $13,000/ student for a similar library in the northeast of the US, and a construction period of 2 years. The Means data states that construction costs escalate at 3% per year in the southeast. If there are 3000 students at Florida Tech and the Cost Comparison Index between the northeast and southeast is 0.75, what is the estimated cost for the new library at Florida Tech at the mid-point of construction? (20 pts)

Estimated Florida Tech cost: _______________________________

Question #5-solution 5. Raw cost = $13,000 x 3000 = $39,000,000 Convert to SE USA = $39,000,000 x 0.75 = $29,250,000 Escalate to mid-point of construction = 2004 to 2007 = 3 yrs

Escalation factor = 3yrs x 3%/yr = 9% = 1.09Final estimated cost @ 2007 = 1.09 x $29,250,000 = $31,882,500

Estimated Florida Tech cost: $31,882,500

Question #6

6.You are the engineer in charge of operations for a Public Works Department in a small city in Florida. Your community has just experienced a severe hurricane which caused a lot of damage to facilities and infrastructure in your community. What type of contract would you use in each of the following situations and why. (30 pts) Your choices of contract type are: (1) Fixed price (2) Cost Plus (3) Cost Plus Incentive Fee

Question #6aSituation A: A highway is strewn with debris. You are not sure how

much debris is there and it must be removed immediately to restore traffic operations and for delivery of food and fuel.

Question #6a-solutionSituation A: A highway is strewn with debris. You are not sure how

much debris is there and it must be removed immediately to restore traffic operations and for delivery of food and fuel.

Answer: “Cost Plus” Use this contract because you do not know the total scope of work; you do not have time to design or cannot do a cost estimate of the total scope and you must begin work immediately. However, this type of contract is open ended and therefore you must monitor the contractor’s operations and invoices very closely. You have all the risk.

Question #6bSituation B: The roof has been blown off of a water supply pumping station. You have the as-built drawings for the building and desire to replace the roof exactly as shown in the original drawings. The pumping station is operational with a temporary roof. However, you would like work to start immediately and you would like to motivate the contractor to complete the roof within two months.

Question #6b-solutionSituation B: The roof has been blown off of a water supply pumping station. You have the as-built drawings for the building and desire to replace the roof exactly as shown in the original drawings. The pumping station is operational with a temporary roof. However, you would like work to start immediately and you would like to motivate the contractor to complete the roof within two months.

Answer: “Cost plus incentive fee”(1)You have the as-built drawings and make no changes, so you know the total scope. (2) You do not want to take time to design or go out for competitive bids. (3) You want to finish as quickly as possible, so you “incentivize” the contract. You will pay his actual costs for a known scope plus an “incentive” or “bonus” fee, if he finishes early. Here you take some risk, but you use a bonus to motivate and control the contractor.

Question #6cSituation C: A 40’x80’ prefabricated steel storage shed for landscaping equipment has been destroyed by the wind. You would like to replace the shed before the next rainy season which is 8 months away. The design is provided by the building supplier as part of the package.

Question #6c-solutionSituation C: A 40’x80’ prefabricated steel storage shed for landscaping equipment has been destroyed by the wind. You would like to replace the shed before the next rainy season which is 8 months away. The design is provided by the building supplier as part of the package.

Answer: “Fixed Price Contract” You have plenty of time. The design is part of the building package. You can specify the type of building you want and the functionality you need. Then you publish an advertisement to contractors with an invitation for bids and get competitive pricing on the entire building package, erected on your site. This will give you the best price and the least risk.

Question #77. True or False: It is best to issue a change order verbally to ensure that construction operations will not be adversely affected by the unexpected situation. (5 pts)

True_________ False___________

Question #7-solution7. True or False: It is best to issue a change order verbally to ensure that construction operations will not be adversely affected by the unexpected situation. (5 pts)

True_________ False____XXX____

Question #88.True or False: You are the owner’s rep. The engineer of record makes a site visit to your project to ensure compliance with the plans & specifications; you should instruct him to communicate freely with the contractor and to direct the contractor to make immediate corrections to any deficiencies he observes. (5 pts)

True_________ False___________

Question #8-solution8.True or False: You are the owner’s rep. The engineer of record makes a site visit to your project to ensure compliance with the plans & specifications; you should instruct him to communicate freely with the contractor and to direct the contractor to make immediate corrections to any deficiencies he observes. (5 pts)

True_________ False___XXX_____

Question #99. EXTRA CREDIT: Describe the accuracy of a cost estimate relative to percent of design detail. Explain the relationship in words or draw a diagram to show the relationship. (10 pts)

Question #99.EXTRA CREDIT: Describe the accuracy of a cost estimate relative to percent of design detail. Explain the relationship in words or draw a diagram to show the relationship. (10 pts)

Answer: As the percent of design detail increases we would expect the accuracy of the cost estimate to increase towards 100%; however, it will never be 100% accurate due to market factors that are unknown to us and are beyond our control. The diagram is:

% Accuracy

% D

esi

gn

0 25 50 90 100

100

90

60

30