7/3/2022: Cost geometry and most significant cost parameters moved from Pre-Contract Cost Planning and Control.
17/2/2021: Term contract edition updated.
17/3/2020: Revised.
26/2/2020: Revised.
17/2/2020: Tender price indices links updated.
20/12/2014: Moved from wiki.
Consultants' source of data
Tenderers when tendering will get their cost data by making enquiries with their prospective sub-contractors and suppliers.
Consultants may make enquiries with prospective contractors, sub-contractors and suppliers for cost data but may only be able to obtain some indicative budgetary prices which may differ from that obtained under circumstances of real business opportunity and competitive tendering.
To evaluate whether tender prices received are reasonable market rates, other cost data not received for the same tender would need to be used to compare.
Consultants would therefore rely more on past cost data for cost estimating and for evaluation of tenders.
Consultants would know the rates and prices in tenders received but would not normally know the costs, profit and overheads in the tenders. It does not really matter when the Consultants are interested more on the all-in rates. The details of costs, profit and overheads are only essential when handling claims.
When estimating composite rates covering more than one work item, the quantity ratios of the constituent work items would be important.
Rates:
Tender prices
Final Account prices
New inquiries (contractors, sub-contractors, suppliers)
Architectural Services Department Schedule of Rates for Term Contracts for Building Works 2019 Edition:
They are published once every many years and should be used with extreme caution for new works.
Quantity factors and ratios:
Cost Analyses of Other Projects
Analyses by sampling.
Adjust for time differences
There can be up or down fluctuations of costs and prices over time. When using past cost data for the present or future work, adjustments should be made for the time differences.
Indices for adjusting for time differences:
Cost indices – reflecting labour and material costs
Tender price indices – reflecting prices of work
Consumer price indices – reflecting general consumer prices not just for the construction industry.
Cost indices and tender price indices can change at different rates. Cost indices can rise but tender price indices may fall in case of severe competitive market lacking work.