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Review MODULE – CONSTRUCTION 1

1. R.A. 9184 (bidding process) the following 5 years. Thus, their wages in 1998 through 2002 increased at a rate of 9%
A project has been bid out by the Department of Public works and Highways. The per year. Assume further that, in 1997, they placed 120 blocks per 8-hour day, or 15
approved budget for the contract (ABC) is 500 million pesos. The results of responsive blocks per hour and that their annual increase in productivity for the following 5 years was
bids are as follows: 2% per year.
Bidder A = 550,234,451.98 (a) What might have been the reasons for this increase in productivity?
Bidder B = 610,345,763.12 (b) Based on the above information, calculate the labor cost per block placed for each of
Bidder C = 454,218,557.98 the 6 years.
Bidder D = 389,122,897.44 (c) Calculate the inflation rate for each of the last 5 years; that is, find the percentage
Bidder E = 284,758,426.54 increase in the labor cost per block for each year from the previous year.
1. which bidder are considered as prospective bidders.
2. solve for the maximum amount or the ceiling price of the project. 7. PROJECT CLOSEOUT AND TERMINATION PHASE
3. to which bidder will the project be awarded. - Often termed commissioning, this phase must be planned and programmed, tasks
must be assigned, the phase must be executed effectively and its costs, schedule and
2. R.A. 9184 (Change Order) quality must be controlled.
The quantities, actual unit prices, and BOQ unit price of a project are given as follows:
Item Qty Actual Unit Price BOQ 2 CATEGORIES:
1 120 80 100 (1) completing the work - which includes the physical activities that must be
2 50 2600 2400 accomplished on the site.
3 600 150 150 (2) closing out the project - involving the multitude of required documents and other
4 80 900 1000 paperwork issues, some related obviously to finances but others to certificates, project
5 800 45 150 records and provision to the owner of the required training, operational information, spare
6 500 100 80 parts and the like.
7 25 1100 1200
8 3500 18 20 1. Suppose a project consists of three buildings, plus sitework, with stipulated completion
dates as follows: Building A, 1 March 2004; Building B, 15 April 2004; Building C, 15 July
1. compute the Project Cost. 2004; Sitework, 1 August 2004. The contract provides for per-calendar-day liquidated
2. which Items are covered for change order. damages for the various portions as follows: Building A, P50,000; Building B, P30,000;
3. compute for the amount of change order in (%). Building C, P70,500; Sitework, P10,500. The actual dates of the beginning of beneficial
4. compute the maximum allowable amount of change order. occupancy are as follows: Building A, 1 April 1 2004; Building B, 1 April 2004; Building C,
10 August 2004; Sitework, 10 August 2004.
3. R.A. 9184 (Advance Payments, Progress Payments, Retention Money, Negative (a) Calculate the amount by which the final payment will be modified due to these actual
Slippage, Contract Completion, Liquidated Damages, Suspension of Work, completion dates.
Extension of Contract Time, Performance Evaluation, Warranties) (b) Now suppose, in addition to the liquidated damages provision, the contract provides
for bonus payments for the portions as follows: Building A, P60,000; Building B, P40,500;
Refer to the construction schedule at page 2. Contract Price = 14.5M Building C, 10,000; Sitework, 20,000. Revise your answer to (a).
1. draw the projected s – curve.
2. show the projected cash flow.
3. based on actual accomplishment at what month will the deduction of retention ends. Terms & Definitions:
4. is the project subject for termination. 1. CONSTRUCTION PROJECT LIFE CYCLE - the typical pattern of the flow of the
project work from its inception to its closeout and termination.
4. Direct & Indirect Cost
For a given project, it is estimated that 4m of 610mm Dia. RCP can be installed in one 2. TYPES OF PROJECT DELIVERY SYSTEM
hour using the following equipment and labor: Design – Tender – Build:
Description rate/hr Where: Tender = bid
1 backhoe 800 *applicable for both private/government Owner
1 plate compactor 120
1 foreman 50 Turnkey - is one in which the owner and contractor agree on a fixed contract sum for
2 skilled laborers 40 a contract under which the contractor will take responsibility for the entire project.
10 unskilled laborers 35
Build–own–operate–transfer/PPP(Public – Private Partnership) - The build–own–
The pipe cost P570 per meter. For every meter of pipe, the following materials are operate–transfer (BOOT) type of project has evolved as a means of involving the private
required: sector in the development of the public infrastructure. The concept, in use in some parts
0.07 bag of Cement @ P130/bag of the world for some centuries, requires the private sector to finance, design, build,
0.15 cu.m. of sand @ P300/cu.m. operate and manage the facility and then transfer the asset to the government free of
Value added tax is 10% of the cost of equipment and labor. Profit, overhead, charge after a specified concession period.
contingency, miscellaneous and insurance is 30% of the cost of equipment, labor and
materials. Joint venture - an arrangement that is ‘a voluntary association of two or more parties
1. Compute the Cost of labor and equipment per meter. formed to conduct a single project with a limited duration’. Joint venture agreements are
2. Compute the cost of materials per meter. formed between construction firms or between design firms and construction firms; they
3. Compute the unit price per meter. do not include owners. In a sense they are special purpose partnerships, because of their
separate, temporary nature.
5. Pre – Construction Phase (Types of Contracts and Delivery System)
1. Suppose you are invited to consider performing a pile-driving contract, where the steel Force account – the project owner acts as the prime contractor and carries out the work
piles are to be driven to refusal. Subsurface soil data is incomplete and not trustworthy. with its own forces by providing field supervision, materials, equipment and labor.
What type of construction contract would you prefer? Why?
2. Distinguish between a time-and-materials contract and a cost-plus contract. Phased construction - Although more a scheduling approach than a delivery system,
3. The text described a cost-plus-fixed-fee construction contract for which the estimated we discuss phased construction, or ‘fast-tracking’, here because several of the delivery
sum of all reimbursable costs was P15,000,000 and the fixed fee was P1,800,000. The systems are better suited than others to this method of planning and carrying out the
guaranteed maximum price (costs plus fee) was P17,500,000. Any savings in costs project schedule. The basic idea is that some portions of the design work occur
below the target of P15,250,000 was to be shared, with the contractor receiving 25% of concurrently with field construction, thus achieving an overall savings in total project
the savings. Suppose that any costs above P15,250,000 were to be shared equally duration.
between owner and contractor.
Determine the amount the contractor will be paid if the actual reimbursable costs are 3. PLANNING AND DESIGN PHASE
(a) P14,850 000: (b) P15,000,000: (c) P15,250,000 Consultant Selection - depends on the owner’s criteria for selection.

6. PROJECT OPERATION PHASE 4. CONTRACTOR SELECTION PHASE

1. One way of defining inflation in the construction industry is to measure the difference CONTRACTOR SELECTION - depends on the owner’s criteria for selection.
between the increase in the cost of a worker and the increase in the productivity of that
worker. If a worker is able to increase their productivity at the same rate as their wage 5. MOBILIZATION PHASE
increases, there is no inflation. - activities that take place between the award of the construction contract and the
Consider the following hypothetical example. Assume that in 1997 a concrete block beginning of construction work in the field.
layer’s labor rate was P150.00 per hour and they received a 9% annual increase each of