SOURCES, USES AND APPLICATION OF CONSTRUCTION PRICING DATA. Rory Woolsey, CEP October 21, 2014
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1 SOURCES, USES AND APPLICATION OF CONSTRUCTION PRICING DATA Rory Woolsey, CEP October 21, 2014
2 SOURCES, USES AND APPLICATION OF CONSTRUCTION PRICING DATA 1. Pricing OVERVIEW: Construction Pricing Tools a) Sources and Uses b) The Process for Applying Data c) The Baseline of the Pricing Source d) Adjusting to Your Project 2. Example Pricing SOURCES: a) The Means Basis b) The Gordian Basis 3. Example of Pricing USES: a) Budget Estimating b) Job Order Contracting 2
3 FACILITIES CONSTRUCTION PRICING. HOW DO WE PRICE THIS PROJECT? 3
4 FACILITIES CONSTRUCTION PRICING. CHALLENGES TO PRICING FACILITIES PROJECTS 1. Ongoing operations 2. Time 3. Match existing 4. The Customer 5. Small Quantities 6. Environmental Issues 7. Weather 8. Noise 9. Dust Control 10. Safety 11. Tie into existing 12. Access/ Egress 13. Code issues; fire, seismic, ADA 14. Unknowns 15. No Record Drawings (or not updated)
5 FACILITIES CONSTRUCTION PRICING. MANY SOURCES OF PRICING DATA BNI RSMeans The Guide The Gordian CTC Trade Service Sweets cost guide Marshall Swift Saylor Engineering News Record Design Construction Data Own cost records - historical Suppliers Vendors Subcontractors Commodity pricing
6 FACILITIES CONSTRUCTION PRICING. MANY USES OF PRICING DATA 1. Budgetary Estimating 2. Labor Hours and Scheduling 3. Sanity Checking in Hard Bidding Projects 4. Bidding (filling holes) 5. Change Order Pricing and Negotiation 6. Unit Price Contracts / JOC 7. Value Engineering 8. Facilities Maintenance Budgeting 9. Checking Subcontractor Quotes 10. Life Cycle Analysis - Present Value 11. Buildings Valuation & Replacement 6
7 1. Scope of Work (Critical Step!!) 2. Quantify the Scope 3. Pricing Construction 4. Validate/ Check the Results FACILITIES CONSTRUCTION PRICING. APPLICATION OF PRICING SOURCES: PROCESS IS THE SAME
8 ALL DATA SOURCES HAVE A BASELINE WHAT IS THE BASIS OR BASELINE OF DATA?? 1. Time: Now or Historical 2. Location: National, Local or Site Specific 3. AE Scope: Specification 4. Context Scope: Site conditions represented 5. Execution Scope: Means and Methods 6. Cost Inclusions: Direct and Indirect 7. Bare: To what degree marked up Know the BASIS of the Resource Being Used
9 WHAT IS THE BASIS OF THE DATA PRICING FACILITIES PROJECTS I. Direct Costs Material Labor (plus Labor Burden; futa, suta, fica, wci) Equipment Subcontractor II. Site Overhead (5% to 15% of Total) III. Home Office Overhead (Variable 5% to 10%) IV. Profit (Variable 5% to 15%) V. Sales Taxes VI. Performance Bond VII. Estimate Contingency (Variable 5% to 20%)
10 TEMPERING ADJUSTING THE BASIS DATA TO FIT USE 1. Construction Cost Indices 2. Location Indices 3. Labor Hours 4. Local Material Pricing 5. Experience 6. History 7. Productivity 8. Line item modifiers 9. Coefficients (i.e. JOC)
11 EXAMPLE PRICING DATA SOURCE RSMeans Data Getting to Know the Pricing Resource
12 ALL DATA SOURCES HAVE A BASELINE THE RSMeans DATA BASIS: 1. Trusted: Source for Estimating for 70 Years 2. Location: National with city index adjustment 3. Average: Materials & labor averaged 4. Specification: No product names, general spec 5. Context Scope: Site conditions average 6. Execution Scope: Crews with assumed approach- Flexible 7. Cost Inclusions: Very bare or Subcontractor bare 8. Flexible/ Bendable: Create, adjust, massage 9. Detailed: All back up given, Can get complex
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18 EXAMPLE PRICING DATA SOURCE Gordian Data Getting to Know the Pricing Resource
19 ALL DATA SOURCES HAVE A BASELINE THE GORDIAN CTC DATA BASIS: 1. Trusted: Source for Job Order Contracting for 25 Years 2. Location: Location Specific, entity specific 3. Local: Materials & labor from local market 4. Specification: Detailed tech specification, site specific 5. Context Scope: Site conditions average 6. Execution Scope: Clearly defined at line item level 7. Cost Inclusions: Bare 8. Rigid: Less bending, more specific, defined clearly at line item level, line item specific modifiers 9. Assemblies Oriented: Nuts and bolts built into the line items and defined at the line item level 10.Contractor s say: Less details to deal with, More chunks
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24 EXAMPLE USES OF DATA SOURCE Job Order Contracting Getting to Know the Uses of Data
25 JOB ORDER CONTRACTING
26 26 THE PROCESS - HOW IS WORK DONE? Joint Scope Meeting With the Owner, Contractor, and Others to define the Detailed Scope of Work The Owner Issues Request for Proposal for the Agreed Upon Detailed Scope of Work Proposal Development Typical Proposal Due Date will be 2 weeks from RFP Proposal Review Issuance of Job Order Total Time Goal: Average 3-5 weeks
27 27 QUESTIONS? Rory Woolsey CEP Account Manager
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