• By the end of this course, the learner will be able to:

• Define PM general definitions

• Link Tendering life cycle
• Compare Types of contracts
• Define Types of costs
• Explain Relations between project resources
• Measure Civil and Arch, MEP quantities
• Create QTO sheets
• Calculate project resources productivities
• Create price breakdown sheets
• Estimate Direct cost
• Develop RFQ
• Assess the received offers and Select the best offer
• Create indirect sheet and estimate indirect costs
• Create markups sheet
• Prepare the final technical and financial envelope

2
• THIS IS A SAFE LEARNING ENVIRONMENT!!
َ ‫قَي ُدهُ وال ِكتابةُ ال ِعل ُم‬
• Please take notes ‫صي ٌد‬
• Don’t stop learning, search, ask and learn more.

3
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5
A project is defined as a Temporary with a clear Unique and creates Has boundaries of time,
sequence of tasks that Start and End something new money, quality, etc.…
must be completed to
attain a certain
outcome.

6
The application of knowledge, skills, Project requirements : start and end
tools, and techniques to project dates, scope, boundaries of works,
activities to meet the project constraints in resources, deliverables,
requirements. budget etc..

7
 Project Costs means the total sum of
all costs incurred in the development of
a project

8
Cost estimation in project management is the
process of forecasting the financial and other
resources needed to complete a project
within a defined scope

9
- Cost is the direct or indirect expenses - Price means the contract price or item
- Direct cost = Dry cost price including direct, indirect and markup
- Contractor is reimbursed with price not
cost

10
 Tendering is the process by which bids are
submitted from interested contractors to carry
out specific packages of construction

11
 Cost

Risk Resources

Project
constraints

Scope Schedule

Quality

12
- An uncertain event or condition that, if it occurs, has a positive or
negative effect on one or more project objectives. —PMBOK® Guide –
Sixth Edition
- Can a risk be Positive!!!!???

13
• All the needed tasks starting from receiving RFP till submitting the proposal, including but
not limited to :
• Quantity take off
• Direct cost calculations
• Indirect cost calculations
• Markup calculations
• Technical proposal preparation

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15
 Tendering
Senior
Tendering Team Tendering Commercial
Tendering
Engineer Leader/Section Manager Director
Engineer
Head

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 Client/Owner

Contractor Engineer

Project
stakeholders

Project Manager
Site supervision
and/or Cost
Consultant
Consultant
Tendering lifecycle
From
Client requirements
To
Project award
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Client/Owner PM or Cost Cons. Engineer Redesign
Requirements ` Engineer Design ` Budget ` if needed

21
• Change or update in Client Requirements.
• Budget according to project documents is above client budget.
• Other reasons…(New technology, design errors, etc…)

22
Client/Owner PM or Cost Cons. Engineer Redesign
Requirements ` Engineer Design ` Budget ` if needed

`
Final Project
Tender
Documents

23
Instructions To
Tenderers(ITT)

24
• Includes but not limited to:
• Project general information
• Project scope of works
• Project duration
• Type of contract(Re-measured or lump sum)
• Date of submission
• Place of submission
• Offer validity
• Advance payment
• Bonds
• Type of Bid
• Currency
• Language
• Evaluation of Tender
• Tender forms

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 Invitation To
Drawings
Tenderers(ITT)

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 Invitation To
Drawings Specifications
Tenderers(ITT)

29
• Specifications AKA specs.
• A document that describes and details the work and workmanship needed
to complete the project.
• It describes: Material, method of installation, reference code, storage
precautions, related works, etc…

30
 Invitation To
Drawings Specifications
Tenderers(ITT)

Bill Of
Quantity(BOQ) and
Method of
measurements

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• One of the project documents which includes:
• Unit of measurements for each BOQ item
• Rules of what items and costs are included in each BOQ item
• Example:
• is RFT a separated item or included in concrete?
• If separated, Is RFT unit of measurement is KG or Ton?

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Item Description Qty Unit Rate Total (EGP)

C Reinforced Concrete (Substructure)

C Reinforced cast-in-place concrete Grade 300 including formwork,

Reinforcement steel, and construction joints, concrete surface repair and
concrete tests all as per drawings and in accordance with specifications

A To Isolated footings 203 m³

B To Retaining Walls 125 m³

C To Columns 96 m³

D To Flat slab 501 m³

Total

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• MasterFormat® is a product of the Construction specifications institute
• It provides a master list of Divisions, and Section numbers.
• Example:

35
 Invitation To
Drawings Specifications
Tenderers(ITT)

Bill Of
Quantity(BOQ) and Contract general and
Method of particular conditions
measurements

36
• General conditions is the contract standard without any change.
• Most of Clients make some changes in General conditions, the changes will
be presented in Particular conditions.

37
(a) The Agreement.
(b) The Contract Data.
(c) Particular Conditions of Contract and Annexes.
(d) General Conditions of Contract.
(e) Specifications.
(f) Drawings.
(g) Bills of Quantities and Preamble, and the Method of Measurement.
(h) The Schedules and other documents forming part of the Contract (signed
by both Parties).

38
Client/Owner PM or Cost Cons. Engineer Redesign
Requirements ` Engineer Design ` Budget ` if needed

`
Final Project
Client’s Invitation `
Tender
for Bid (IFB)
Documents

39
• Open Bids( Mostly used for governmental Bids)
• Selective Bids(Private sector Bids)
• Negotiated Bids (mostly used for extending scope of works)

40
 Project Name

Expression of interest
Client Name, PM name

Email of PM

41
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 Financial

Preparing
Contractor Contractor
Client’s RFP to Financial and
expression of Tendering
interest
Contractor technical
Planning
proposals

43
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 QTO

Financial Proposal

45
 QTO

Direct costs

Financial Proposal

46
• Cost resources are labor, equipment, material and Subcontractor.
• Direct cost is the cost of resources which you can directly assign to a specific BOQ item.
• If a resource is shared between two or more BOQ line item. The resource cost is not a
direct cost.
• Examples of direct costs:
• Labor: Mechanical workers fixing water pipes
• Material: Mortar material in Blockwork
• Equipment: Concrete pump in foundation item
• Subcontractors: Generator's subcontractor

47
 QTO

Subcontractors

Direct costs

Financial Proposal

48
 Evaluation of Selecting best
Packages RFQ Getting offers
offers offer

49
• Packages consists of : Drawings, specs, MOM and BOQ
• Who are the subcontractors/suppliers you will send the RFQ to?

50
 QTO

Subcontractors

Direct costs

Financial Proposal

Self Performed
and Cost
breakdown

51
 QTO

Subcontractors

Direct costs

Financial Proposal

Self Performed
and Cost
Indirect costs breakdown

52
• Indirect costs are the costs that are shared between two or more BOQ line
item.
• Example of indirect costs:
• Project Staff salaries
• Client mobilization requirements
• Contractor Site offices
• IT costs
• Electricity and water
• Safety requirements
• Scaffolding for elevations
• Site security
• Site equipment

53
 QTO

Subcontractors

Direct costs

Financial Proposal

Self Performed
and Cost
Indirect costs breakdown

Markups

54
• Net profit
• Head office expenses
• Financial costs
• Insurance
• Social Insurance
• Value added tax on contracting 5%
• Risks
• Stamp duties
• Bonds fees

55
Direct cost Indirect costs Markups Total price

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 Financial

Preparing
Contractor Contractor
Client’s RFP to Financial and
expression of Tendering
interest
Contractor technical
Planning
proposals

Technical

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• Company past experience and ongoing projects.
• Company owned equipment
• Tax Card
• Value added tax certificate
• Commercial register
• Egyptian federation for construction & building Contractors register
• Financial statements for X years

58
• Stamped Tender Documents
• Preliminary schedule
• Organization chart
• Equipment histogram
• Manpower histogram
• Key personnel CV
• Method statement and work execution plan
• Mobilization Plan
• Vendor list
• Subcontractor list
• Technical clarifications
• Datasheets and catalogues
• QC, QA and HSE plan

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Prepared technical Finalizing Submitting Tender
Management Modifications proposals and
and financial to client
review printing
proposals

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• Project size
• Project grade
• Project location
• Project duration
• Project start date
• Market conditions

62
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• Superficial floor area or area per m2
• For preliminary studies of the various aspects of the work
• Used when low level of details is available
• Which area to estimate on?
• How can we estimate price/m2?
• What is included in the estimate?
• Floor Area Estimate = BUA x Cost per m2

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• Used when more design requirements or documents are available but not the
final design documents.
• Number of Personal Units x Cost Per Unit = Total Cost of Building
Examples:
• The number of beds in a hotel
• The number of rooms or bedrooms in a building
• The number of parking bays in a basement car park
• The number of beds in a prison

65
• This is the accurate method of estimating in which the entire building work is
subdivided into individual items of work
• The quantities of each item of works are calculated from the complete set of
drawings

66
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• Labor productivity is the key
• Location and jobsite conditions
• Work schedule
• Consider the following: Wages, Insurance, Social insurance, overtime,
medical insurance, Transportation, accommodation…
• Skilled labor
• unskilled labor

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• All materials that are used in the finished structure.
• Unit of supplying materials is important. It is not always the same as BOQ item
• Taking into consideration : Transportation, waste, taxes, freight, handling
• Material management considers using fewer materials and preventing waste

70
• Buy or rent decision
• Choose number and size of equipment
• Transportation to and from site

71
• Main elements of cost:
• Engineering and project management cost
• Construction costs (materials, equipment, manpower and subcontractor)
• Construction financing
• Inspection and testing
• All indirect costs and markups

72
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• As per the previous tender process flowchart
• Most common
• Design by Engineer
• Build by contractor

74
• The designer and builder are the same entity
• EPC contract (Turnkey)
• E: Engineering
• P:Procurement
• C:Construction

75
• Design-Build-Operate-Maintain
• Public-Private partnership (PPP)
• Build operate Transfer (BOT)
• Build own operate transfer (BOOT)

76
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 Advantages Disadvantages

Reduce client risk Greater contractor risk

Minimum change orders Increase in tender prices

Less management from client side More contractor tender effort

Potential greater margin for the contractor Slower tender process

Simplicity and Certainty of contract price

The bid price encompasses all of owner’s costs to

complete the project

the owner does not care about the actual

costs/quantities of construction and does not
have to monitor them

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 Advantages Disadvantages

The Employer will only pay for actual Uncertainty of contract price
quantities performed

Contractors can benefit where the More variation orders

anticipated quantities are underestimated
as the contractor will be paid at the agreed-
upon unit price for all units completed.

Lower bid price for the Employer More effort regarding invoices during
construction

Less QTO effort in tender phase

79
• What is cost plus contract?
• When to used cost plus contract?
• Types of cost plus contracts
• Cost + fixed fees
• Cost + percentage of cost
• What do you think the Term “cost” describes?

80
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 Contract book name Description Notes

Green book 1999 Short Form of Contract -Design by Employer

Red book 1999 Conditions of Contract for Construction -Design by Employer

For Building and Engineering works
designed by the Employer
Red Book (MDB edition) Conditions of Contract for Construction -Design by Employer
2005 For Building and Engineering works -the Multilateral Development
designed by the Employer Banks (MDBs) adopted the FIDIC
Conditions of Contract.
Yellow Book 1999 Conditions of Contract for Plant and -Design by Contractor
Design-Build For electrical and mechanical
plant, and for building works, designed by
the Contractor
Orange Book 1995 Conditions of Contract for Design-Build -Design by Contractor
and Turnkey
Silver Book 1999 Conditions of Contract for EPC/Turnkey -Design by Contractor
Projects
DBO Contract 2008 Conditions of Contract for Design, Build
and Operate Projects

82
• A way of safeguarding against the danger of an unresolved argument.
• In case of any ambiguity , the document that is higher on the list is the superseding.

83
84
 Final Project
Client/Owner Contractor Client’s RFP to
Engineer Design Tender
Requirements interest Contractor
Documents

Preparing
Technical and Contractor
Tender Submitting Management
Financial Tendering
Evaluation Tender Review
proposals Planning

Selecting winner
Negotiations Project award Contract Signing
Contractor

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