Knowledge Base 知識庫

Knowledge Base 知識庫 KCTang
  1. This Knowledge Base is purely for the sharing of the knowledge of quantity surveying, and does not constitute as terms and conditions of our consultancy services. Our actual practice may vary to suit individual circumstances. This Knowledge Base shall not be used as evidence of practice and interpretations that we must adopt.

    此知識庫純粹用作分享工料測量的知識,並不構成為敝公司顧問服務的條件及條款。敝公司的實際做法可能因應個別情況而有所變化。此知識庫不能作為我司必須採用某做法及釋義的依據。

  2. This Knowledge Base was first published on Friday, 26th December, 2014 and was previously a WiKi site created on Thursday, 14th January, 2010.

    此知識庫首先於2014年12月26日星期六發布,之前是一個於2010年1月14日星期四建立的 Wiki 網頁

Quality Alerts 質量提示

Quality Alerts 質量提示 KCTang

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Note

  • 4 Nov 2015: Created.

Where is the satisfaction?
滿足感在那裡?

  1. Winning the trust of clients, being consulted frequently
    客戶信任,時常諮詢
  2. Problem solved
    解決到問題
  3. Proper monitoring of prices, without unpleasant surprises to the clients
    造價跟蹤管理得宜,不出客戶意料之外
  4. Considered fair and reasonable by both the Employers and the Contractors
    發包方及承包方都覺得公平合理

Invisible hand
無形的手

  1. Always be prepared to be audited by a third party
    隨時準備有第三者審計
  2. Professional misconduct would cause damage to the Company not compensable by professional liability insurance
    專業失當就算有保險都不能補償對公司造成的破壞

Treating the counter-parties
對待對手

  1. Fair
    公平
  2. Reasonable
    合理
  3. Non-corruptive
    廉潔

Attending meetings
開會

  1. Be prepared
    要有準備
  2. Watch out deportment
    注意儀態良好
  3. Refrain from smoking
    不要抽煙
  4. Present oneself appropriately
    洽當表現自已
  5. Should not keep silence without contribution
    不要默不作聲毫無貢獻
  6. Should not speak unnecessarily
    不作無謂發言
  7. Say “To check and reply” if necessary cannot answer
    真的不會答時, 不怕答“容後補答”、“要查證再覆”

Estimates for maintenance and renovation
維修裝修估算

  1. Estimates for maintenance and renovation may place greater emphasis on classification by locations. It is not appropriate to classify items under them according to so many elements used for new works, but structured levels are still necessary to facilitate easier reading and understanding. Therefore, the items can be grouped and listed as follows (the locations may be classified before or after them but should not be too trivial):
    維修裝修估算項目比較著重按地方分類,之下不宜再如新建工程的分部分得那麼多,但又要有層次,便於閱讀理解,故可分類排列如下(地方可先分或後分但不宜太瑣碎):
    • Scaffolding
      棚架
    • Removal of existing
      移除現有
    • Walls, Windows and Doors
      牆窗門
    • Fittings
      裝置
    • Finishes (no need to put under headings of floor, wall and ceiling)
      裝飾 (之下不必分地面、牆面、天棚等標題)
    • M&E
      機電
  2. Schedule of Works should be similar
    工程項目清單亦是這樣

Measurement of quantities
計量

  1. Do not rely too much on on-screen measurement of cad or pdf files because there is no record of what have been measured and no detailed breakdown
    不要太依賴用cad或pdf檔 在螢幕計工程量,因計了那裡都無紀錄,又無細數
  2. Use hardcopy and dimensions to measure or use scale where necessary in case of no dimensions
    用紙張件及標示尺寸計算或在無標示尺寸時用尺量
  3. Colour on the hardcopy to indicate extent measured
    在紙張件著色識認計算了那裡

Price information
價格資訊

  1. Build-up a database
    建立資料庫
  2. Collect directive circulars and prices published by Government and authorities
     收集政府、權力機構的指令性通知、價格
  3. Collect market prices through other commercial sources (i.e. cost software vendors)
    收集其他商業渠道的市場價格(例如造價軟件公司)
  4. View newspapers, periodicals, internet
    檢閱報章、期刊、互聯網
  5. Collate internal information
    整理自身的資料
  6. Analyse content ratios and unit costs of past projects
    分析過往工程含量及單位造價
  7. Obtain through tendering
    通過招投標取得

Cash flow table
資金流量表

  1. Use horizontal table with a chart
    盡量使用橫式有圖表那個款
  2. Include complete remarks
    要加齊註釋

Standard documents
標準文件

  1. Use standard documents/templates to prepare fee proposals, tender documents, tender reports and other documents, but may refer to other projects for useful changes
    要用標準文件編寫顧問費報價、招標文件、投標分析報告及其他文件,但可參考其他工程有用的改動
  2. Do not adapt from other projects, unless really appropriate, but should check  the standard documents for any updates
    不要直接用其他工程的改, 除非真的合適,但仍要核對標準文件有無最新的改動

Lead in water problem
鉛水問題

  • Check tender documents for expressions using lead, and check with the designers whether this is appropriate
    檢查招標文件有無用鉛的字句,及與設計單位了解是否適合

Insurance provisions in tender documents
招標文件保險條款

  1. Ensure that the name list of the joint-insured as specified in the Contractors’ All Risks and Third Party Liability insurance provisions is comprehensive; apart from the Employer, the Contractor and sub-contractors of all tiers, note whether the list should include:
    確保規定工程一切險及第三者責任險的條款的聯名被保險人的名單齊全;除發包方丶承包方及各層分包方外,還要注意是否要加入:
    • the Building Manager (being a manager of the relevant properties, he may be held liable)
      物業管理人(因他為相關物業的管理人,可能被追討責任)
    • other contractors employed by the Employer (because their works will be carried out currently with the Works, and the liability for accident may not be clearly separable)
      發包方聘用的其他承包商(因其工程與本工程同時執行,意外責任未必能分得清)
    • consultants (because they are not directly performing the Works, and the insurances can only cover risks caused by the performance of the Works, therefore, it is doubtful whether they should be included as one of the joint-insured) 
      顧問(因他們不是直接執行工程者,而保險只保障執行工程所造成的風險,因此,把他們作為聯名被保險人之一的效用存疑)
  2. Adjust the old term “separate specialist contractor” to match the term used in the new Standard Forms of Contract
    調整“separate specialist contractor”這舊有叫法以符合新標準合同的叫法
  3. State the values of their works for inclusion as part of the sum insured to avoid inadequate insurance cover
    列出他們的工程金額,作為保額的一部分以免保額不足
  4. State expressly work outside boundaries to avoid lack of insurance cover
    特別列出工地外的工程以免保險範圍甩漏
  5. Include in the amount of removal of debris the costs of demolition of building, hoardings (if not included in the present contract), scaffolding for demolition, etc; review whether the $1M stated in the standard documents are adequate and adjust as appropriate
    計算保險的殘礫清理保額時要包括拆樓、圍街板(假設本合同價未包括圍街板)及拆樓用的棚架;檢討標準文件寫的100萬元是否足夠及作適當的修改
  6. State the values of the previous works such as foundations and hoardings for inclusion as part of the sum insured under the material damage section to ensure full cover; alternatively, if the risk of total loss is low, insure as the principal’s properties under the third party liability section, but the limit of indemnity will be lower
    列出之前的工程,例如基礎、圍街板等的價值,加入物質損壞保險的保險額內以取得全額保;或者,如全毀的風險低,可以作為工程委託方的財産形式在第三者保險部份受保,但賠償額較低

Preparing Bills of Quantities or Schedule of Rates
編寫工程量清單或單價表

  1. Read the Standard Method of Measurement, whether you are experienced or not; do not just listen to other people
    任何時間都要睇工程量計算規則,無論生手定熟手,不要光聽人講
  2. Note concrete mix, beam depth stages, height stages, edges, shoulders, straight / sloping / curved, etc.
    計混凝土工程時要注意混凝土的標號、樑深的層級、高度的層級、邊沿、接肩、直斜彎,等等!
  3. Do not blindly follow past Bills of Quantities or Schedule of Rates because they may have simplified the measurement which may not be applicable to every project, and may in fact be wrong
    不能盲目照跟舊有的工程量清單或單價表因為它們可能把計法簡化了,但此不是單單工程都合用,而其實可能根本就錯了,

Preliminaries Bills
開辦營運費清單

  • Draw horizontal lines to separate items in Preliminaries Bills containing clause headings only to enable entry of prices in alignment with the item descriptions
    用橫線把只列條款標題的開辦營運費清單內的項目間開以便填寫價格時對齊項目說明

Documentary exchange with tenderers
與投標者的來往文件

  • Keep the hardcopies and softcopies of documents, correspondence, faxes and emails exchanged during tendering under a separate folder for each tenderer to enable easy tracking and compilation of contract documents
    把招投標標的 所有來往文件、信件、傳真及電郵的打印或電子件按每一投標者分開歸檔,以便追蹤及製作合同文件

Tender clarification queries
詢標問卷

  • Clarify in the tender clarification queries only those incorrectly priced high or low rates, not comparatively high or low rates
    在詢標問卷應只問錯誤地高或低的單價,而不是相對高或低的單價

Financial reports
最終造價估算報告

  1. Estimated Amount = Reasonably estimated maximum amount for budgetary purposes
    估計價 = 合理估計的最大金額,供投資預算用
  2. First Claimed Amount = Amount initially claimed or the biggest amount claimed by the Contractor
    原報價 = 承包商第一次或最大的一次的報價
  3. Latest Claimed Amount = Latest revised amount claimed by the Contractor, or the current amount after negotiated reduction
    最新報價 = 承包商最新的修訂報價,或通過談判應已減低了的金額
  4. Assessed Amount = Amount accurately or roughly assessed to be comfortably payable finally, in other words, the minimum final amount payable
    審核價 = 經準確或大約計算得的可安心作為最終應付的總額,亦即等如最低的最終應付總額
  5. When Assessed Amount = Claimed Amount, Estimated Amount should also be = Assessed Amount
    當審核價 = 報價時,估計價亦應 = 審核價
  6. In the final stage of final account, the Estimated Amount should be smaller than the Claimed Amount
    到結算後期,估計價應低於報價

Approximately
大約

  • Write “approximately X Nos.” instead of  “approximate X Nos.”
    寫成“approximately X Nos.” 而不是  “approximate X Nos.”

Replace by or with
更換

  • “replace by” or ”with” may be distinguished by this example: in “replace A by B with C”, A is the replaced, B is the one who takes action, and C is the substitution
    “replace by”定”with” 可以此例子分辨:”replace A by B with C” 中A是被更換者、B 是行動者、C是代替者

Final account item descriptions
結算項目說明

  1. Note that if the words "revise", "change", "replace" and similar are used in the final account item descriptions, cost omission and addition are both expected
    注意當”修改”、”改變”、”更換”等類似用詞在結算項目說明使用時,意味應同時有減帳及加帳
  2. Make sure that the final account item descriptions are consistent with the cost effects
    確保結算項目說明是與費用影響匹配

End of Page

Personnel Organisation 人員編制

Personnel Organisation 人員編制 KCTang

Go to End

Note

20 Dec 2014: Moved form wiki.

Personnel organisation to consider
人員編制要考慮

  1. How many people
    要多少人
  2. Types and number of professional personnel
    專業人員的類別及人數
  3. Types and number of supporting personnel
    輔助人員的類別及人數
  4. Continuing learning
    持續學習

Kind of persons to employ
請什麼類形的人

  1. Enduring
    克苦
  2. Hard working
    實幹
  3. Attentive to details
    細心
  4. Highly analytical
    分析力強
  5. Eager to learn
    肯學習
  6. Able to use computer
    會用電腦
  7. Able to use common office software
    會用常用的辦公室軟件
  8. Literate in Chinese and English
    具中英語文能力

End of Page

Administrative Management 行政管理

Administrative Management 行政管理 KCTang

Go to End

​​ Note 注​​​​​​​

  • 19/1/2023: Updated to reflect the established practice.
    更新以反映既定慣例。
  • 30/7/2021: "Use of recycled paper" added.
    添加了“回收紙的使用”。
  • 13/7/2021: "Sending back source files" added.
    添加了“發回源文件”。
  • 7/7/2021: "Use of emails" expanded. "Filing of letters and emails" added.
    擴展了“電郵的使用”。 添加了“信件和電郵的歸檔”。
  • 7/4/2019: "Issuing Tender Documents just before holidays" added.
    添加了“臨假期前出標”。

​​ Joining the Company 加入公司

  1. Company:
    公司:
    • Add new member's name to company address book (using Google Contacts).
      將新成員的姓名添加到公司地址簿(使用 Google 通訊錄)。
    • Create a Google calendar for the new member.
      為新成員創建一個 Google 日曆。
    • Assign a name for the calendar in the format of "AB.Ccc" where AB are the initials and Ccc is the family name.
      以“AB.Ccc”格式為日曆分配名稱,其中 AB 是首字母,Ccc 是姓氏。
    • Give the Google account name and password to the new member.
      將 Google 帳戶名和密碼提供給新成員。
  2. New member:
    新成員:
    • Sign in the Google account to access the calendar and contacts.
      登錄 Google 帳戶以訪問日曆和聯繫人。
    • Fill in own full name in English and Chinese (if applicable), office phone number, private email address and private phone number.
      填寫自己的中英文全名(如適用)、辦公室電話號碼、私人電郵地址和私人電話號碼。
    • Record own daily office appointments and leaves on the calendar.
      在日曆上記錄自己每天的辦公室約會和休假。
    • Update the times after finishing the appointments.
      完成約會後更新時間。
    • Change the name of the computer and user name on the computer assigned for use to reflect own name.
      在指定使用的電腦上更改電腦名稱和用戶名以反映自己的名稱。

(added 添加, 19/1/2023)

​​ Office Hours 辦公時間

  1. Office:
    辦公室:
    • Normal office hours from 8:45 am to 5:45 pm from Monday to Friday except general holidays.
      正常辦公時間為周一至周五上午 8:45 至下午 5:45,公眾假期除外。
    • Lunch hour from 1:00 pm to 2:00 pm.
      午餐時間 1:00 pm 到 2:00 pm。
    • Normal office hours must be fulfilled before counting for overtime.
      在計算加班時間之前,必須完成正常的辦公時間。
  2. Staff members:
    職員:
    • Clerks must be punctual for the normal office hours.
      文員必須準時上班。
    • Some slight late arrivals of other staff members is tolerable but up to 9:30 am only.
      其他職員員的一些輕微遲到是可以容忍的,但僅限於上午 9:30前。
    • Any late arrival beyond that should be compensated by an equal amount of working time with no pay after fulfilling the normal office hours.
      超過此時間的任何遲到都應在完成正常辦公時間後以等量的無薪工作時間作為補償。
    • Sign in and out whenever they come and go.
      每當出入時都要簽到和簽出。
    • Fill in the timesheets everyday before leaving the office or just after coming back on the next day. (Timesheets will be subject to sample checks for salary payment purposes. If more than the actual time is recorded, the recorded time will be discounted based on the percentage error for salary payment purposes.)
      每天在離開辦公室之前或第二天剛回來時填寫考勤表。(計算薪酬時,會抽樣檢查考勤。如記錄超過實際的時間,計算薪酬的時間將按百分比誤差打折扣。)
    • Get the director-in-charge's consent before taking casual / annual leave.
      休事假/年假前須徵得主管董事的同意。
    • Notify all colleagues through WhatsApp before taking sick / casual / annual leave (the day before in case of pre-planned leave).
      在病假/臨時假/年假之前用 WhatsApp 通知所有同事(如果是預先計劃的假期,請提前一天)。
    • Submit doctor's certificate for sick leave afterward.
      之後提交病假醫生證明。

(Added 添加, 19/1/2023)

​​ Issuing Tender Documents just before holidays 臨假期前出標​​​​​​​

  1. If issuing Tender Documents on Friday, remind the tenderers that our office is closed on Saturday and not available for collection of documents.
    若星期五出標,提醒投標者敝公司星期六不辦公、不要到取文件。
  2. If issuing Tender Documents just before the Chinese New Year Holidays, ensure that the tendering period can accommodate the different lengths of holidays of the tenderers and their suppliers and factories. Factories usually close for longer time than the public holidays.
    若臨農曆年假前出標,確保投標期可以包容投標者及他們的供應商及工廠的不同的假期長度。工廠通常放假較公眾假期長。

(Added 添加, 7/4/2019)

​​ Office appliances 辦公用具

  1. Paper
    紙張
    • Use recycled paper as much as possible.
      盡可能使用再生紙。
    • Print on single side of new paper.
      在新紙上單面打印。
    • Reserve the other side for recycled use.
      保留另一頁以供回收使用。
    • Avoid printing on both sides because it will increase the workload when sorting out single and double sided printed paper in the future for scanning or disposal.
      避免雙面打印,因為這會增加日後整理單雙面打印的紙張進行掃描或處理時的工作量。
    • Print on both sides for thick documents only.
      僅厚文檔用雙面打印。
  2. 4-in-1 Printer, photocopier, scanner and fax machine
    4 合 1 打印機、複印機、掃描儀和傳真機
    • Rotate the use of recycled paper on different machines to reduce the wearing on any particular one.
      在不同的機器上輪換使用再生紙,以減少任何個別機器的磨損。
    • Rotate once every month.
    • 每月輪換一次。
  3. Binding machine
    釘裝機
  4. Telephone
    電話
  5. Broadband connection
    寬頻接線
  6. Internet service
    互聯網服務
  7. Intranet
    內聯網
  8. Computer
    ​​​​​​​電腦
    • Close software when leaving the desk for long.
      長時間離開辦公桌時關閉軟件。
    • Switch off the computer after leaving the office (except when remote desktop is required for use).
      離開辦公室後關閉電腦(需要使用遠程桌面時除外)。
  9. Client software
    客戶端軟件
    • Office automation - Windows 10 and 11, Office 360.
      辦公自動化 - Windows 10 和 11、Office 360。
    • Pdf and compression - Acrobat, Wondershare, WinRar.
      Pdf 和壓縮 - Acrobat、Wondershare、WinRar。
    • CAD and BIM - Autocad, Intellicad, Revit.
      繪圖及立體資訊模擬 - Autocad、Intellicad、Revit。
  10. Server software - Ubuntu
    伺服器軟件 - Ubuntu
    • File server - Samba.
      檔案伺服器 - Samba。
    • Email server - Postfix and Dovecot.
      電郵伺服器 - Postfix 和 Dovecot。
    • Web server - Drupal.
      網頁伺服器 - Drupal。

(Updated 更新, 19/1/2023)

​​ Passwords 密碼

  1. Unless authorised, do not watch, memorize or use passwords used by the Company to assess internal or external websites.
    未獲授權不應觀看、記下及使用公司使用的內外網站的密碼。
  2. Do not disclose passwords used by the Company to outside persons.
    不得對外人披露公司使用的密碼。

​​ Fax machine setting 傳真機的設定

  1. Set time clock.
    設定時鐘。
  2. Set sender’s identity.
    設定發送者的識別。

​​ Printer driver 影印機的驅動程式

  1. Do not install those provided by Windows.。
    不要安裝Windows 提供的。
  2. Install those provided by the printer companies.
    安裝打印機公司提供的。
  3. Copy the file saved in the “Installation Sources” folder in the server to the local computer, install, set to use A4, black and white, single sided and recycled paper, and delete the file after successful installation
    把存儲在伺服器”Installation Sources”檔案夾內的安裝檔抄到自己電腦,安裝,設定用A4、黑白、單面、再用紙,裝後刪除安裝檔。

​​ Protocol when answering phone calls 接聽電話的禮儀

  1. Answer first with company name or own name.
    先報上公司名稱或自已名稱。
  2. Pick up phone calls for other colleagues when they are not at their desk.
    當其他同事不在辦公桌前時,為他們接聽電話。
  3. Ask for the name, contact number, company and project name of the calling person and record on a paper.
    詢問來電人的姓名、聯繫電話、公司和項目名稱,並記錄在紙上。
  4. Take photo of the paper note and send immediately by WhatsApp to the colleagues intended to be called for follow-up.
    拍照紙上筆記,並立即通過 WhatsApp 發送給被找的同事跟進。​​​​​​​

(Updated 更新, 19/1/2023)

​​ Use of recycled paper 回收紙的使用

  1. Recycle paper which has been printed on one page only.
    回收再用僅打印在一頁的紙。
  2. Only recycle paper which is in good conditions and does not have stamped marks on the printed page visible on the blank page.
    僅回收狀況良好且在空白頁上不會見到打印頁上的印記的紙張。
  3. Use recycled paper to print emails and drafts not intended for sending out as hardcopies.
    使用回收紙打印不打算作為硬拷貝發送的電子郵件和草稿。
  4. Do not send out recycled paper to outside parties because it may contain confidential information.
    不要將回收紙發送給外方,因為它可能包含機密信息。
  5. Put recycled paper in the standby storage boxes and printer trays following the facing directions indicated at the standby storage boxes or printers.
    按照備用儲物箱或打印機上指示的朝向,將回收紙放入備用儲物箱和打印機托盤中。
  6. Inspect the recycled papers to be free of staples and in the correct directions before putting them in the printer trays.
    在將回收紙放入打印機紙盒之前,檢查回收紙是否沒有釘書釘並且方向正確。
  7. Put the recycled paper in the printer trays in such a way that the previously printed page will be on the back and upside down a後fter re-printing.
    將回收紙放入打印機托盤中,使之前打印的頁面在再打印後在背面倒置。
  8. Draw a diagonal line after re-printing on the last back page of such recycled paper.
    在再打印後在最後一頁畫一條對角線。
  9. Draw a diagonal line after re-printing on each of the previously printed pages not turned upside down .
    在再打印後在沒有倒置的舊打印頁的每頁畫一條對角線。
  10. Note that recycled pages which do not have the previously printed pages turned upside down will cause confusion when reading and when the document is to be scanned in the future.
    注意,沒有將舊打印的頁面倒置的回收紙會在閱讀時和將來掃描文檔時造成混亂。

(Added 添加, 30/7/2021)

(Updated 更新, 19/1/2023)

​​ Use of emails 電郵的使用

(Expanded 擴展, 7/7/2021)

(Updated 更新, 19/1/2023)

Generally
一般

  1. Follow the template for folder structure under the email Data folder to create new folder structure for new jobs.
    參照Data電郵夾下的電郵夾結構模板” template for folder structure” 的概念把所有工程的電郵夾分類及統一名稱。
  2. Do not print emails except when printed copies are required for use (particularly when drawings are to be printed for taking-off and colouring for evidence of taking-off).
    不要打印電郵,除非需要使用打印副本(特別是當需要打印圖紙以進行計量和著色以作為計量證據時)。
  3. Delete spam emails on sight, to reduce everybody’s abortive time to read (permanent clearance from the Deleted Items folder will be done by the Administrator).
    一見垃圾電郵就立刻刪除,以免人人都要花時間看(從刪除郵件夾永久刪除由管理員做)。
  4. Ignore all emails received from time to time calling for security verification regarding iTune, Apple ID, Microsoft, PayPal, HSBC, etc. since they are mostly malicious emails.
    千祈不要理會不時收到的關於iTune、 Apple ID、Microsoft、PayPal、HSBC 等等要人重新輸入認證的電郵,黑郵居多。
  5. Do not open or save attachments received from unknown persons, and do not click open links.
    不要打開或儲存來自不認識的人的附件,亦不要打開連結。

Sending emails
發送電子郵件

  1. bcc all outgoing emails back to our office.
    發出所有電郵時,密件抄送回自己公司。
  2. Check that the bcc copies are received by our office to prove that the outgoing server is working.
    檢查自己公司是否收到密件抄送副本,以證明發送伺服器正常工作。
  3. Check that there are no delivery failure message (should appear within 5 minutes) to prove that the delivery is successful.
    檢查沒有發送失敗消息(應在 5 分鐘內出現)以證明發送成功。
  4. Handle any delivery failure immediately by contacting the intended recipient for the proper address, and re-send with a remark "Re-sent due to delivery failure", cc all others on the original email to make them know.
    立即處理任何送達失敗,聯繫預期收件人以獲取正確地址,重新發送,註明“因送達失敗而重新發送”,並抄送原始電郵中的所有其他收件人以知會他們。
  5. For urgent email failed to be delivered after retry or failure to contact the intended recipient, fax the email copy to his/her company with a remark "Faxed due to email delivery failure" and the date. Email the front page back to the office.
    緊急電郵在重試後仍未能送達或未能聯繫到預期的收件人,將電郵副本傳真給他/她的公司,並註明“因電郵送達失敗而傳真”和日期。 將首頁通過電郵發回自己公司。
  6. Email source files (Word, Excel, etc.) back to our office after sending out pdf files. Mark at the beginning "Source files attached".發送 pdf 文件後,將源文件(Word、Excel 等),電郵發送回自己公司。 在開頭標記“附加的源文件”。

Correspondence not by emails
非電郵的來往文件

  1. All outgoing and incoming documents not sent by email should be emailed back to our office for the record on the same day.
    所有非通過電郵發送的來往文件應在同一天通過電郵發送回自己公司以資記錄。

 

Printing frequency (no longer adopted)
打印頻率(不再採用)

  1. Print all emails once every half-an-hour as far as possible.
    盡可能每半小時打印一次所有電郵。
  2. Print before lunch break all emails received before 12 am.
    午休前打印所有在上午 12 點之前收到的電郵。
  3. Print before close of a day's work all emails received before 5 pm.
    在一天的工作結束前打印下午 5 點之前收到的所有電郵。
  4. Print upon starting a day's work all emails received before that.
    在開始一天的工作時打印之前收到的所有電郵。

Persons responsible for filing emails
電郵歸檔負責人

  1. Be responsible for filing the softcopies of emails of their own projects.
  2. Assign more junior or newly joined staff members to file softcopies of emails for a team of staff members.
  3. Define filters.
  4. Clerical staff (if available):
  5. Assign a person as the final guard to remind all others to print their emails by the 12 am and 5 pm deadlines, and print all remaining emails not falling within the scope of the any particular team.
  6. The above principle still applies if a clerk is employed to do the printing.

Printing

  1. Print the newly received pages of the emails only, i.e., excluding linked pages of past emails which have been received before.
  2. Print on one-sided recycled paper. (One-sided printout will be easier for reading and future scanning for archiving.)
  3. Print on double-sided paper only when required by the surveyor responsible.
  4. Print the one with track-changes if both Word or Excel and pdf files are received.

Not to print

  1. ​​​​​​​Delete spam emails.
  2. Delete promotional emails not relevant to our industry, profession or business.
  3. Do not delete nor print promotional emails relevant to our industry, profession or business. File them under their relevant folders, if available, otherwise under "Sales Promotion".
  4. Permanent deletion from the Trash folders should only be made by the director.
  5. Do not print documents which are too thick, say more than 30 pages. Ask the surveyor responsible to see whether the thick documents should be printed.

Emailed copies of faxes

  1. Treat emailed copies of faxes similarly.
  2. Convert emailed copies of faxes to proper emails by forwarding each email with attached fax back to the office but stating a proper subject title and inserting an image of the first page in the email beforehand.

Documents sent through links

  1. Do not download from links sent by unknown senders for unknown purposes. Check with the senders if in doubt.
  2. Download ALL documents received through genuine links and and email them back to our office for the record.
  3. Email ALL documents sent out through links back to our office for the record.
  4. Split them into several emails if the file size is too large.

Emails attached to emails

  1. Save emails attached to an email received on to the computer desktop and move them back to the email folder. They will appear at the positions of their original email dates. This would enable reading the story in a chronological order, and easy tracing later.
  2. Print such emails like other emails.

Handling of printed emails

  1. When there are more than one attachment, identify whether they belong to one submission or several submissions each bearing its own serial number or date (e.g., letters, site memos, proposed variations, instructions, variation quotations, payments, minutes, regular reports, etc.).
  2. Separate between different submissions by staples or clips.
  3. Arrange different submissions according to the dates stated on them (not the dates received).
  4. Within the same submission, arrange the attachments in logical sequence, usually covering letter or site memo at the front and drawings at the back. Descriptive documents are usually in the middle. Summaries may be put before or after the details depending on the authors. Follow the specific contents page or the list of items stated in the email. Do not follow the order of the attachments to the email because they have no logical sequence.
  5. Fold thin A3 attachment (say, not exceeding 5 pages) forward from right to left along the centre line into A4 size, and then fold the top flap from left to right along the centre line into half A4 size. 
  6. Fold thick A3 attachment backward from right to left keeping the edge clear from the left punch holes.
  7. Stamp the date received on the top right hand corner of each separate submission received (but no need for different parts of the same submission which are not supposed to be taken out for use separately).
  8. Stamp the date received on the top right hand corner on each programme and on the bottom right hand corner on each drawing because they may be filed or taken out for use separately.
  9. Mark near the date chop the relevant instruction numbers.
  10. Stamp neatly and clearly at a blank space.
  11. Do not stamp on submissions emailed by our office unless they are returned with emails received.
  12. Write on the emails simple reference numbers and dates of those separate submissions which are filed not immediately after the relevant emails to enable future tracing.
  13. Initial neatly on the bottom left corners of the emails after arranging the emails and attachments.
  14. File the emails directly in the appropriate email sub-folders of the relevant projects.
  15. If the emails are printed by somebody other than the relevant team members, file the emails under the "00Printed" email folder for subsequent filing by the relevant team members. 
  16. Distribute the printed emails once every half-an-hour to the relevant project team members for reading.
  17. Circulate within the relevant team starting from the director to the assistant. If any person is absent, pass on to the next one present.
  18. Read and initial on the top right hand corners of the emails and the first pages of separate submissions.
  19. Take immediate actions as required by the emails.
  20. File the emails in the relevant hardcopy folder after all team members have read and initialled and when no further immediate action is required.
  21. File different submissions according to their dates even though those dates may be sometime in the past so that they can tell the complete story when the files are read sequentially sometime later. The date received stamp can help to trace that emails sending them though the submission and the email may be filed separately.​​​​​​

 

​​ Filing of letters and emails 信件和電郵的歸檔

  1. Create a separate folder section for each preliminary cost estimate, proposed instruction, confirmation of verbal instruction, formal instruction, other item to appear in the final account (e.g., group of provisional quantities, provisional sum), financial report, payment valuation, etc.
  2. Name the email folders or label the hardcopy folder flysheets by their serial numbers.
  3. If an email covers more than one folder section, email it back to the office with a note added to the subject so as to distinguish. Do not just make copies because identical copies will be deleted if a "remove duplicate" check is done.
  4. File requests for estimates and estimates under the proposed instruction folders. Move them to the formal instruction folders after the issuance of the formal instructions.
  5. Move confirmations of verbal instructions to the formal instruction folders after the issuance of the formal instructions.
  6. Change the folder or label names to reflect or track the move.
  7. File quotations and assessment related to a formal instruction under the same folder section, i.e., all matters related from cost estimate until agreement are to be filed together to tell the complete story.
  8. Spilt into more folders if an instruction covers more than one variation or final account item.
  9. Update the financial report descriptions and amounts to match whenever a new or revised quotation or assessment is received or issued.
  10. File communications with each tenderer separately. This is important for tracking the development, preparing the letter of award/intent, and contract binding.
  11. In principle, all incoming and outgoing documents in the email folders and hard copy folders should mirror each other, except for working documents not sent out.
  12. Bind tender documents as a book, not to be filed.

(Added 添加, 7/7/2021)

​​ Use of WhatsApp 短信的使用

  1. Read Company chat group regularly.
  2. Reply immediately upon receipt of messages relating to self or all people, whether within or outside office hours.
    在公司群組收到關於自已或關於全部人的短訊要即覆
  3. Report after completion of the task.
    在事件完成後要報告
  4. Delete messages after completion of the task.
  5. Learn from others' messages to avoid committing the same mistakes and to adopt good practice.
  6. Delete non-relevant messages not worth keeping.

​​ Revit

  1. Use the License Transfer Utility provided by Revit to transfer Standalone License from one computer to another computer without infringing the license
    使用Revit提供的許可證轉移工貝(License Transfer Utility)把單機許可證從一部電腦, 轉移到另一部機而不違反許可證
  2. Use Revit 2015 because some outside companies still use Revit 2013 or 2014 and models of new version cannot be converted back to older versions
    使用Revit 2015版,此乃因為外面有些公司仍只用Revit 2013或2014版,但新版本的模型不能改回舊
  3. Use Revit 2015 for trial
    2016版屬試用

​​ Documentary system 文書機制

  1. Use standard documents and templates
    使用標準檔、範本
  2. Implement file management
    執行檔案管理
  3. State file names, reference numbers, project names, contract names, subjects
    註明檔案名稱、編號、項目名稱、合同名稱、主旨
  4. State date of receipt or dispatch, and affix acknowledgement chop
    註明收發的日期及蓋簽收章
  5. Carry out internal check
    執行內部審核
  6. Double-check after printing
    列印後要覆核
  7. Double-check after calculating
    計算後要覆核
  8. Double-check after transferring figures
    搬移數字要覆核
  9. Check quantities and rates
    覆核數量、單價

​​ File compression 檔案壓縮

  • Set Winrar to use zip format to enable users who do not have Winrar to open (Windows file explorer can open zipped files)
    把Winrar 檔的格式設定為zip方便沒有Winrar的人打開(Windows file explorer可打開zipped 檔

​​ Generate pdf file from Word file 轉換 Word 檔成 pdf 檔

  • 按以下優先次序以減少檔案大小:
    • Print CutePDF (如有)
    • Print - Save as Adobe PDF (如有)
    • Print - Adobe PDF (如有)
    • xport
    • Save as

​​ Travelling expense 交通費

  • State the destination on all taxi fare receipts for the record
    在所有的士單據上列明目的地,以作記錄

​​ Use of toilets 衛生間的使用

  1. Use the toilet roll plastic wrapper after unwrapping as the base cushion to the toilet roll to avoid wetness and reduce dirt
    把廁紙膠套在剝除後用作廁紙的座墊,以便防濕及減髒
  2. Place a new roll as reserve when the toilet roll is about to be used up
    廁紙接近用完,主動取放一卷作後備

End of Page 

Hong Kong Quantity Surveyors and Mainland Cost Engineers 香港工料測量師及內地造價工程師

Hong Kong Quantity Surveyors and Mainland Cost Engineers 香港工料測量師及內地造價工程師 KCTang

Go to End

Note

18/2/2023: Updated.

11/3/2020: Updated.

20/12/2014: Moved from wiki.

Quantity Surveyor

  • Is a construction cost and contract consultant.
  • Originated in Britain as a profession.

Nicknames of Quantity Surveyor

  • cost engineer” as used in the mainland China and the USA.
  • construction cost manager” to recognize his expertise in managing construction costs.
  • construction contract specialist” to recognize his expertise in understanding the law of contracts, the standard forms of construction contracts, and giving advice accordingly to other project team members.
  • construction economist” to recognize his expertise in understanding construction cost factors, variables, and impacts.
  • risks manager” to recognize his ability to draft contract and cost clauses to present the risks clearly to help tenderers submit adequate prices, and reduce post contract surprise claims and disputes.
  • lubricant” (my own invention) to recognize his skill in providing fair and reasonable cost and contractual advice to resolve deadlocks which may exist between other project team members on opposite sides of the table.

Professional Bodies which include Quantity Surveyors and Cost Engineers (or their Professional Bodies) as Professional Members (not exhaustive)

  1. The Hong Kong Institute of Surveyors (HKIS)
  2. Africa Association of Quantity Surveyors (AAQS)
  3. Association for the Advancement of Cost Engineering International (AACE)
  4. Association of Cost Engineers (ACostE)
  5. Association of South African Quantity Surveyors (ASAQS)
  6. Australian Institute of Quantity Surveyors (AIQS)
  7. Brazilian Institute of Cost Engineers (IBEC)
  8. Building Surveyors Institute of Japan (BSIJ)
  9. Canadian Association of Consulting Quantity Surveyors (CACQS)
  10. Canadian Institute of Quantity Surveyors (CIQS)
  11. Chartered Institute of Building (CIOB)
  12. Chartered Institution of Civil Engineering Surveyors (ICES)
  13. China Cost Engineering Association (CCEA)
  14. Commonwealth Association of Surveying and Land Economy (CASLE)
  15. Conseil Européen des Economistes de la Construction (CEEC)
  16. Consejo General de la Arquitectura Técnica de España (CGATE)
  17. Dutch Association of Quantity Surveyors (NVBK)
  18. European Federation of Engineering Consultancy Associations (EFCA)
  19. Fédération Internationale des Géomètres (FIG)
  20. Fiji Institute of Quantity Surveyors (FIQS)
  21. Ghana Institution of Surveyors (GhIS)
  22. Ikatan Quantity Surveyor Indonesia (IQSI)
  23. Indian Institute of Quantity Surveyors (IIQS)
  24. Institute of Engineering and Technology (IET)
  25. Institute of Quantity Surveyors of Kenya (IQSK)
  26. Institute of Quantity Surveyors Sri Lanka (IQSSL)
  27. Institution of Civil Engineers (ICE)
  28. Institution of Surveyors of Kenya (ISK)
  29. Institution of Surveyors of Uganda (ISU)
  30. International Cost Engineering Council (ICEC)
  31. Italian Association for Total Cost Management (AICE)
  32. Korean Institution of Quantity Surveyors (KIQS)
  33. Fachverein für Management und Ökonomie im Bauwesen (maneco)
  34. New Zealand Institute of Quantity Surveyors (NZIQS)
  35. Nigerian Institute of Quantity Surveyors (NIQS)
  36. Pacific Association of Quantity Surveyors (PAQS)
  37. Philippine Institute of Certified Quantity Surveyors (PICQS)
  38. Property Institute of New Zealand (PINZ)
  39. Real Estate Institute of Botswana (REIB) Royal Institute of British Architects (RIBA)
  40. Royal Institution of Chartered Surveyors (RICS)
  41. Royal Institution of Surveyors Malaysia (RISM)
  42. Singapore Institute of Building Limited (SIBL)
  43. Singapore Institute of Surveyors and Valuers (SISV)
  44. Sociedad Mexicana de Ingeniería Económica, Financiera y de Costos (SMIEFC)
  45. Society of Chartered Surveyors Ireland (SCSI)
  46. Union Nationale des Economistes de la Construction (UNTEC)

Major Types of Employers of Quantity Surveyors in Hong Kong
香港顧問工料測量師的主要僱主類別

  • Consultant quantity surveying practices工料測量顧問公司(as directors, partners, or quantity surveyors of different grades).
  • Contractors 承建商(as directors, commercial managers, contract managers, quantity surveying managers, or quantity surveyors of different grades).
  • Government, quasi-government organizations, and tertiary educational institutions 政府、半官方機構、大專院校(as directors, project managers, or quantity surveyors of different grades).
  • Developers 發展商(as directors, project managers, and monitoring quantity surveyors of different grades).

Major Scope of Services of Consultant Quantity Surveyors in Hong Kong
香港顧問工料測量師的主要服務範圍

  • Preparation of pre-construction cost estimates.
    編訂概算
  • Cost planning during the design stage.
    設計階段造價控制
  • Preparation of tender documents.
    編訂招標文件
  • Pre-qualification of tenderers.
    投標單位預審
  • Tender analysis.
    審標
  • Tender negotiation.
    議標
  • Contract award.
    定標
  • Preparation of contract documents.
    編訂合同文件
  • Checking of insurance policies and performance bonds.
    審核保險單、履約保證書
  • Valuation of progress payment applications.
    審核進度款
  • Cost monitoring during the construction stage.
    施工階段造價控制
  • Valuation of amounts of variations and claims.
    審核變更費、索賠
  • Negotiation and agreement of final accounts.
    商議結算

Specialized Services of Some Consultant Quantity Surveyors in Hong Kong
香港某些顧問工料測量師的特別服務範圍

  • Claims consultancy.
    索賠顧問
  • Dispute resolution advisory, mediation and arbitration.
    解決爭議、調解、仲裁
  • Insurance loss adjustments.
    保險理賠
  • Facilities management.
    設施管理
  • Value management.
    價值工程
  • Partnering facilitation.
    促進夥伴關係

Areas of Specialization as written by HKIS

Characteristics of Consultant Quantity Surveyors in Hong Kong
香港顧問工料測量師的特色

  • Full services from inception of project to completion of construction and defects rectification.
    由項目構思到建造完成的全過程造價諮詢服務
  • Now extending to post completion maintenance until redevelopment.
    現在申延到建造後的維修直至重建
  • Dynamic management with constant review and updating.
    不斷檢討及更新的動態管理
  • Cost and contract management of various kinds.
    造價及合同管理多樣化
  • Self-regulated by professional bodies.
    自我約制(通過專業團體)
  • No Government control, though there is a Surveyors Registration Ordinance.
    沒有政府監管(雖然有測量師註冊條例)
  • Mainly handling contracts with Bills of Quantities, but also contracts without Bills of Quantities.
    主要處理有工程量清單的合同,但亦處理沒有工程量清單的合同

Major Scope of Services of Contractor Quantity Surveyors in Hong Kong
香港承建商的工料測量師的主要服務範圍

  • Similar to that described for Consultant Quantity Surveyors but starting from the tender stage.
    與顧問工料測量師的差不多但從投標階段開始
  • Essentially commercial and contract management for the contractors.
    主要負責承建商的商務及合同管理
  • Dealing with upstream clients and consultants.
    處理上游的委託方及顧問
  • Dealing with downstream sub-contractors, suppliers and workers.
    處理下游的分包商、供應商及工人

Surveyors Registration Ordinance

  • There is a Surveyors Registration Ordinance with a Surveyors Registration Board set up to register professional surveyors.
  • Surveyors so registered are entitled to be called “Registered Professional Surveyors” such as “Registered Professional Surveyors (Quantity Surveying)”.
  • Such title is required for undertaking outsourced Government projects but is not mandatory for civil servants or working on private projects.

Getting professionally qualified

Training Path of a Typical Consultant Quantity Surveyor

  • Join a consultant quantity surveying practice.
  • Check the arithmetic of calculations done by others.
  • Measure quantities for approximate cost estimates, bills of quantities, variations, and remeasurement.
  • Get to know the Standard Method of Measurement better throughout the process.
  • Get to know the geometric forms and names of the components making up the whole construction.
  • Draft bills of quantities for editing by the senior.
  • Participate in counter-checking the measurement done by team members.
  • Assist in monthly valuation of contractors’ payments.
  • Visit the site for the purposes of doing the valuation.
  • Assist in preparing monthly financial reports.
  • Accompany the senior to attend pre-contract design meeting or post contract site meetings.
  • Price the variations and remeasurement.
  • Price the approximate cost estimates and the bills of quantities.
  • Agree final accounts with the contractors.
  • Assist to prepare the comparison tables attached to tender reports.
  • Assist to checking the typo corrections of tender documents drafted by the senior.
  • Assist to draft tender documents.
  • Assist to comment on insurance policies and bonds.
  • Attend meetings independently.
  • Give advice on tendering procedure, contractual arrangement and choices of contract clauses.
  • Draft tender documents independently.
  • Interview tenderers.
  • Prepare tender reports independently.
  • Supervise assistants.
  • Perform independently.
  • Continue to give advice on post contract contractual issues.
  • Help avoid and resolve disputes.

Personal Attributes

  • Fair and reasonable – While Consultant Quantity Surveyors are engaged by their clients to protect the clients’ interest under the construction contract, they also have a duty under the construction contracts to act fairly and reasonably. Being fair and reasonable can in fact avoid unnecessary disputes under the construction contracts.
  • Integrity – Quantity Surveyors are dealing with money though no money is actually passing through him. However, any corruptive act would mean a huge sum of money lost by the clients or contractor-employers. Quantity Surveyors must serve with the highest degree of integrity.
  • Patience and persistence – Quantity Surveyors need to spend a long period of time to measure the quantities required for bills of quantities time and again. This would need patience and persistence to the task. Quantity Surveyors have to negotiate with contractors over contractual and monetary claims. Differences in opinions can lead to heated arguments. Patience is again very important.
  • Attention to details – Quantity Surveyors must be accurate in his words and cost figures. Great attention to details to ensure error free is a must. Self-checking and cross-checking are both essential.

(updated, 18/2/2023)

Core Skill-sets Required

  • Construction technology - Good knowledge of construction technology is the foundation stone of any surveyors.
  • Building services – While traditionally cost management of building services is handled by the building services engineers, for over 3 decades in Hong Kong Quantity Surveyors have already been providing measurement and cost management services for building services. Therefore a good knowledge of building services is also required.
  • Mathematics – Daily life mathematics is enough. Use of calculus is rare.
  • 3-D visualization – Quantity Surveyors should be able to visualize the 3-dimensional geometry based on 2-dimensional drawings.
  • Measurement – Good measurement knowledge and skill are the next higher level of foundation stone of Quantity Surveyors.
  • Language – Quantity Surveyors have to read many documents ranging from Standard Method of Measurement, Specifications, Forms of Contract, legal textbooks, occasionally case laws, insurance policies and bonds. Quantity Surveyors have to draft terms and conditions into the tender documents for construction contracts and loopholes must be avoided. Consultant Quantity Surveyors have to write to advise their clients and other members of the consultant teams. Contractors’ Quantity Surveyors must also be able to write properly to put forward the Contractors’ case. The language skills of Quantity Surveyors must be high in order to rise up the career ladder.
  • Use of computers and software – Quantity Surveyors have to know how to use the usual office automation software with proficiency.
  • Site visit – Quantity Surveyors should like to go to site periodically.

(updated, 18/2/2023)

Valued Added Skill-sets

  • Building Information Modelling – This is an important technology which must be learned and used by the present-day construction related professionals. Some Quantity Surveyors have developed special interest to realise the potential of BIM for Quantity Surveyors.
  • Software programming skills – While the majority of Quantity Surveyors do not have the need and therefore the aptitude to possess software programming skills, better use of BIM requires the knowledge to write scripts or programmes.
  • Digital transformation – Transforming and running the business work flow and deliverables in digital mode are the upcoming trend of all business sectors. Quantity Surveyors cannot fall behind.
  • Carbon emission reduction – Calculating carbon emissions and formulating carbon emission reduction measures will be the required upcoming skills of Quantity Surveyors.

(updated, 18/2/2023)

Types of Projects Involved

  • Public sector works and private sector works
  • Building and civil engineering works
  • New build, maintenance, alterations and additions, and renovation

Employment

  • Good Quantity Surveyors are always in good demand both by consultant quantity surveying practices and contractors and even big sub-contractors.
  • When the economy is booming with many new-build projects, Quantity Surveyors have to work a lot of overtime throughout the year. However, working overtime is common amongst the construction related professionals. The extent of overtime worked by Quantity Surveyors is not the worst as compared to other professions.
  • When the economy is bad, new-build projects will be less but people would spend money in maintenance, alterations and additions, and renovation. Final accounts for completed new-build projects are still to be settled. These offer a cushioning effect over the possible redundancy of Quantity Surveyors. Over the years with many recessions, Quantity Surveyors are less hard hit as compared with other construction related professionals.
  • Quantity Surveyors working for contractors will have higher pay.
  • Quantity Surveying graduates tend to choose to work for consultant quantity surveying practices first at a lower pay in order to gain training experience for the Assessment of Professional Competence. After getting qualified, they would have more choices.
  • In good times, consultant quantity surveying practices offer overtime pay. In the best time (not in recent years), the basic salary can become doubled.
  • Qualified Quantity Surveyors working for Government are on the same pay scale as other construction related professionals.

Where is the satisfaction?

  • Winning the trust of clients, being consulted frequently.
  • Problems solved.
  • Proper monitoring of prices, without unpleasant surprises to the clients.
  • Moving projects ahead to get through tendering.
  • Considered fair and reasonable by both the clients and the contractors.
  • Seeing projects constructed successfully.
  • Closing final accounts to all parties’ satisfaction.

Traditional Scope of Services of Cost Engineering Consultants in Mainland China (before 1990)
內地造價工程咨詢單位的傳統工作範圍(1990年前)

  • Preparation of pre-construction cost estimates, tender drawing cost estimates and final accounts, and usually as separate services.
    只做概算、預算及結算,而通常是分開的服務
  • Pre-construction cost estimates are done one or twice only, not following through the whole design stage.
    概算只做一、二次,不跟蹤整個設計階段
  • Not providing contract advisory services.
    不提供合同咨詢服務
  • Tender drawing cost estimates are usually for the client's reference for tender negotiation, not for tendering purposes and usually are subject to remeasurement when settling the final accounts.
    預算通常只是給委託方參考作為議標用,不作為招標用,而通常在結算時重算
  • Not providing contract advisory services.
    不提供合同咨詢服務
  • Not significantly involved in the tendering stage.
    招標階段不顯著參與
  • Not significantly involved in the construction stage.
    施工階段不顯著參與

Recent Scope of Services of Cost Engineering Consultants in Mainland China
內地造價工程咨詢單位的近年的工作範圍

  • Evolving progressively to provide full scope of services like Quantity Surveyors.
    陸續演變到好像工料測量師般提供全過程服務

Competitors
.競爭對手

  • Same profession:
    同專業
    • Local
      本地
    • Other provinces
      外省市
    • Foreign countries.
      國外
  • Other professions:
    不同專業
    • In-house employers of developers
      建設單位自有人員
    • Other professions within the same industry or outside.
      行裡行外的其他專業

Measures to Compete with Others
克服競爭對手的手法

  • Government policies, qualification requirements, tax - only applicable to the mainland China:
    政策、資質、稅收 - 只適用於內地
    • against: other provinces, foreign countries.
      對:外省市、國外
  • Customary practice, alliance, attachment - applicable to the mainland China:
    慣例、掛鈎、掛靠 - 適用於內地
    • against: local.
      對:本地
  • Capability, service contents, lower prices, integrity.
    實力、服務內容、平價、誠信

End of Page

Factors affecting Business Survival 影響企業生存的因素

Factors affecting Business Survival 影響企業生存的因素 KCTang

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Note

20/12/2014: Moved form wiki.

Favourable

  1. Professional competence
  2. Quality management
  3. Complaint avoidance
  4. Timely response
  5. High efficiency
  6. Innovation
  7. Integrity (this being listed last not because it is of the least importance but because it is a matter of course without saying)

Adverse

  • Professional negligence

End of Page

QS's Measures to Enhance Cost Effectiveness of Projects and Processes

QS's Measures to Enhance Cost Effectiveness of Projects and Processes KCTang

Go to End

Note

20/12/2014: Moved form wiki.

Estimating

  1. Provide early and quick advice on costs of preliminary design to avoid abortive design effort
  2. Provide early and quick advice on costs of alternative designs to select the better alternatives
  3. Participate actively in project meetings to voice out areas of design with possible imbalanced cost allocations
  4. Participate in value management workshops to evaluate different design options to enhance values of proposed designs
  5. Update the pre-construction cost estimates regularly in line with design development to ensure no uncontrolled budget overrun
  6. Advise on the cost implications of major changes likely to cause budget overrun to see whether the changes are justified and value for money
  7. Suggest savings to off-set unexpected changes contributing to budget overrun

Tender Documentation

  1. Suggest how the contracts should be packaged to give a proper balance between long lead time to complete design for the whole project, risks and hence higher tender prices to allow for long lag time to actually carry out some work sections, single line of responsibility, etc.
  2. Suggest how the design responsibilities should be shared between the Architect & Engineer and the Contractor to ensure proper share without undue high costs and unbearable risks while benefiting from the Contractor's design-and-build expertise
  3. Observe and follow the standard practice and procedures and use standard templates to reduce abortive work to team members in scrutinising the deliverables
  4. Request for the most up-to-date client's practice manuals, standard templates and house rules which may not yet be available on the web site yet to avoid abortive work
  5. Scrutinise the standard templates for preparing tender documents and make suitable amendments to reflect the project specifics to ensure that the tenderers are sufficiently alerted to when pricing the tenders
  6. Seek early approval on authority to use alternative standard provisions and on deviations from the mandatory standard provisions
  7. Check actively the tender drawings and tender specification to ensure sufficient details and no discrepancies, and request the Architect and Engineer to supplement and clarify accordingly
  8. Prepare the cost estimates and bills of quantities in good quality following a due process of quality control to eliminate chances of errors or omissions.
  9. Use provisional quantities or schedule of rates as a supplement to the bills of quantities in case the relevant design is not fixed and firm yet for tendering so to obtain rates for post contract pricing

Tender Analysis

  • Scrutinise the tenders received to ensure no irregularities in pricing

Post Contract Cost Contract

  1. Advise on the cost implications of every proposed variation as well as instruction involving expenditure of provisional items during construction
  2. Update the post contract cost reports regularly considering all variation instructions, expenditure of provisional items, claims, etc. to ensure no uncontrolled budget overrun
  3. Suggest savings to off-set unexpected changes contributing to budget overrun
  4. Value payments fairly and reasonably so as not to cause unfair and unnecessary cash flow burden on the Contractor, which will eventually result in higher final account claim
  5. Advise on proper contractual interpretation to fairly treat reasonable claims and resist unreasonable claims
  6. Suggest alternative solutions to help resolve problems encountered by the Contractor to avoid the problem to escalate into a cost claim without chance of mitigation
  7. Adopt the principle of mediation where parties should seek to achieve win-win situation instead of arguing over the rights and wrongs

End of Page

Development Cycle 建設流程

Development Cycle 建設流程 KCTang

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Note

  • 18/2/2023: Revised.
  • 17/3/2020: Revised.
  • 20/12/2014: Moved from wiki.

Varieties of construction project developments

  • Sectors:
    • Private sector
    • Public sector.
  • Types
    • Building works
    • Civil engineering works.
  • Site acquisition:
    • Leasing land
      租地
    • Purchasing buildings
      買樓
    • Renting buildings.
      租樓 
  • New or existing:
    • New development 
      新建
    • Redevelopment 
      重建
    • Conversion
      改造
    • Fitting out and renovation 
      翻新
    • Alterations, additions, repair, maintenance and renewal.
      改建、加建、维修、保養及更新
  • Purposes:
    • For self-use
    • For sales
    • For rental.

(revised, 18/2/2023)

Stages of design and construction

  • The names may vary between different countries or even within Hong Kong between different stakeholders.
  • Simplest classification: 
    • Feasibility study
      可行性研究
    • Planning approval 
      規劃許可
    • Design
      設計
    • Tender documentation
      招標文件
    • Tendering
      招投標
    • Construction
      施工
    • Defects rectification.
      修補
  • Sales and rental marketing run concurrently.
  • Occupancy / use / repair and maintenance after construction. 
    使用/維修保養

Pre-contract stage

  • The period before awarding a contract for construction, generally referring to the main contract but actually can refer to any separate contract.

Post contract stage

  • The period after awarding a contract for construction.

Post-completion or occupancy stage

  • The period after completion of construction.

Estate management / property management / facility management

  • "estate management" is an old UK term.
  • "property management" is a new term.
  • "facility management" appears to originate from the US, but is now more commonly used every where.
  • Such management starts to take over after completion of construction.

End of Page

Organization of Parties to Construction 建設組織架構

Organization of Parties to Construction 建設組織架構 KCTang

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Note

  • 18/2/2023: Revised.  
  • 28/2/2022: Revised.
  • 28/3/2021: Contracting hierarchy added.
  • 20/12/2014: Moved from wiki.

Usual contracting hierarchy

(Excluding those not directly related to construction.)
(The one at higher level is the buyer and the other at the immediate lower level is the seller.)

  • Developer / Employer / Client (contract terms in Hong Kong or the UK) / Owner (contract term in US):
    • Consultants and site supervisory staff
    • Contractor / Main Contractor / General Contractor / Head Contractor / Management Contractor:
      • Direct labour
      • Suppliers (Nominated / Domestic)
      • Sub-Contractors (Nominated / Domestic):
        • Direct labour or suppliers
        • Sub-sub-contractors (many tiers):
          • Direct labour and suppliers.
    • Other Separate Contractors and Suppliers
    • Statutory undertakers / public utility companies / government departments.

Developer / Owner / Employer
建設單位 / 業主 / 發包方

  1. Project Manager.
    項目經理
  2. Consultants:
    顧問團
    • Architect
      建築師
    • Structural Engineer
      結構工程師
    • Building Services Engineer / M&E Engineer
      屋宇設備工程師 / 機電工程師
    • Interior Designer
      室內設計師
    • Geotechnical Engineer
      地質工程師
    • Landscaping Architect
      園境師
    • Quantity Surveyor.
      工料測量師
  3. Clerk of Works / Building Services Inspector.
    現場監工 / 機電監工

Main Contractor
總承包方

  1. Sub-Contractors:
    分包方
    • Nominated
      指定
    • Domestic.
      自選
  2. Suppliers:
    供應商 / 供貨方
    • Nominated
      指定
    • Domestic.
      自選

Other Separate Contractors and Suppliers
其他獨立承包方及供應商

Statutory Undertakers and Public Utility Companies
法定承辦商及市政配套單位

Purchasers and Users
買家 / 用家

End of Page

Estimating and Pricing

Estimating and Pricing KCTang

Note

  • 20/2/2023: Split into various pages.
  • 18/2/2023: Revised.
  • 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.

Rates and Prices

Rates and Prices KCTang

Go to End

Note

  • 20/2/2023: Split from "Estimating and Pricing". Incorporating mark-up, margin, wastage, bulkage and shrinkage.

Cost and price

  1. Cost” and “Price” are often used interchangeably.
  2. Between the two parties to a transaction, the price quoted by the Seller / Contractor is the cost to the Buyer / Employer / Client.
  3. For the same party, Cost + Profit = Price.
  4. Seller's price = buyer's cost.

Values

  1. Values can be monetary prices or other benefits.
  2. Cost can also include non-monetary costs.

​​​​​​​Price build-up

  1. The total price is built up from:

          Labour costs (​人工費) 

+       Material costs (材料費)

+       Plant costs (機械費)                                                  

          Direct costs (直接費)

+       Site and project overheads (現場及項目管理費)

+       Head office overheads (公司管理費)                       

          Costs (成本)

+       Profit and risks allowance (利潤及風險費)           

          All-in price before value added tax (稅前綜合價)

+       Value added tax (從價稅)                                       

          All-in price (稅後綜合價)                                          

  1. The value added tax here means a tax chargeable upon the net total price before this tax or the gross total price after this tax. Hong Kong does not implement valued added tax. Hong Kong only charges profit tax on the realisable profit annually.
  2. Some of the site and project overheads are not directly related to a particular work item but are commonly shared by more than one item. It is normal to price for these site and project overheads as the Preliminaries. The all-in rate for the work item will then only include the balance of the site and project overheads not included in the Preliminaries.
  3. Profit and overheads are usually allowed for as a percentage of the direct costs. The usual norm for variation is 15%, but it will be very different in competitive tenders. The profit and overheads allowed in the prices for different items can be different.
  4. Some part of the Works may be sublet to sub-contractors. They will include their own overheads in their prices to the Contractor. They may also share to provide some of the site overheads otherwise provided by the Contractor. Therefore, the mark-up on sub-contractors' prices for profit and overheads should be less than that on direct labour and materials.

Mark-up and margin

  1. 100 x (1 + 15%) = 100 + 15 = 115:
    • 115 has a mark-up of 15%.
  2. 85 + 15 = 100:
    • 100 has a margin of 15%.
  3. 15/115 = 13.04%:
    • A mark-up of 15% is equal to a margin of 13.04%.
  4. 15/85 = 17.64%:
    • A margin of 15% is equal to a mark-up of 17.64%.

(revised, 18/2/2023)

Cost, price, profit, mark-up and margin

  1. Simple approach:
    • When we face with the above terms, what should be the mathematical formulae to handle them and how can we remember the formulae?
    • Instead of using x, y and z to represent the formulae, it would be easier to derive the formulae based on some simple numerical values using 100 as the base.
  2. cost + profit = price.
  3. profit markup % = profit / cost x 100%.
  4. profit margin % = profit / price x 100%.
  5. Given profit markup and price, how to get the cost?
  6. A long way:
    • Cost + cost * profit markup % = price
    • Cost * (1 + profit markup %) = price
    • Cost = price / (1 + profit markup %) = price x 100 / (100 + profit based on 100).
  7. A quicker way:
    • If cost = 100 and profit markup = 15%, then profit = 15 and price = 115
      • This means, cost = price x 100 / 115
    • If cost = 100 and profit markup = 10%, then profit = 10 and price = 110
      • This means, cost = price x 100 / 110
    • To conclude, if profit markup = P%, then cost = price x 100 / (100 + P).

% wastage

  1. If a finished qty of work of 100 requires a material qty of 120. The qty wasted is 20.
  2. Should the wastage be 20/100 = 20% or 20/120 = 16.67%?
  3. Both can be correct depending on which is used as the base.
  4. However, in pricing, when the payment is based on the finished qty, the qty wasted should be borne by the finished qty. 
  5. In the above example, the addition to cover the qty wasted is 20/100 = 20%, so the wastage should be 20%.
  6. If a 3 x 6 finished board requires a 4 x 8 uncut board, the wastage to be allowed is (4 x 8) / (3 x 6) - 1 = 32/18 - 1 = 77.78%.
  7. To conclude, the wastage to be allowed
    = qty wasted / finished qty
    = (qty used - finished qty) / finished qty
    = (qty used / finished qty) - 1.
  8. The denominator is the payable qty (finished qty).

% bulkage (excavation)

  1. How to allow for the extra volume to work on if payment is based on the volume before bulking?
  2. Bulkage or bulking factor = volume after bulking / volume before bulking.
  3. Volume after bulking = volume before bulking x bulkage.
  4. The addition to cover the extra volume is volume before bulking x bulkage. This should be simple.

% shrinkage (concrete, mortar, plaster, screed) or % compaction (soil backfilling)

  1. How to allow for shrinkage if payment is based on the quantity after shrinkage?
  2. If shrinkage = 20%, for each 100 qty, qty shrunk = 20, qty left = 80.
  3. The addition to cover the qty shrunk = 20/80 = 25%.
  4. If shrinkage = 30%, for each 100 qty, qty shrunk = 30, qty left = 70.
  5. The addition to cover the qty shrunk = 30/70 = 42.86%.
  6. If shrinkage = S%, then the addition factor = S/(100-S).
  7. The denominator is the payable qty (qty left).

All-in rates and unit of quantity

  1. All-in rate = all-in price / quantity.
  2. Not all the costs are directly proportional to the quantity of the work, it can be a combination of:
    • Variable costs
    • Fixed costs.
  3. Cost = f(weight) + f(volume) + f(area) + f(length) + f(number) + f(quality) + f(quality) + f(time) + f(others).
  4. When the total price of a work item is required to be broken down into quantity and rate, the unit of the quantity to be used should be one which represents the most cost significant variable.
  5. If there are more than one cost significant variable, then the work item should be broken down into more than one sub-item.
  6. It is usual and easier to estimate the cost of a bigger sample quantity of a work item first and divide the cost by the quantity to obtain the unit rate so that:
    • Those costs not directly related to the quantity of the work item can be shared
    • Wastage, laps, etc. which are not measured in the quantity can be allowed for.

(revised, 18/2/2023)

Rate build-up

  1. Labour costs:
    • Daily rates to include for:
      • daily basic wage
      • travelling and meal allowances
      • allowances for hand tools and personal accessories
      • allowances for holidays with pay
      • mandatory provident fund (MPF) contribution
      • year end bonus
      • incentive payments
      • levies and insurances if not priced separately
      • etc.
    • ​Time to consider:
      • taking from stores, hoisting, lowering
      • placing, fixing
      • non-productive travelling and recess time
      • etc.
  2. Material costs:
    • Rates to include for:
      • ex-factory costs, package
      • export transportation, transit insurance
      • customs clearance and duties
      • demurrage, off-site storage
      • local delivery
      • off-loading, returning package
      • etc.
    • Quantities to consider:
      • basic quantities
      • breakage, damage, theft
      • wastage (cutting, conversion)
      • unmeasured laps
      • bulkage, consolidation, shrinkage
      • etc. 
  3. Plant costs (called "Equipment costs" in civil engineering contracts): 
    • Rates to include:
      • Use of plant (not purchasing of plant)
      • Mobilization, relocation and demobilization costs, if not measured separately
      • Fuels and consumables
      • Maintenance and repair.
    • Time to consider:
      • Time used
      • Unavoidable idling time
      • Mobilization, relocation and demobilization time, if not measured separately.
  4. Site and project overheads
    • Expenses on site or off-site specifically due to the project, not specifically related to any particular group of work but are commonly shared.
  5. Head Office Overheads
    • Expenses in running the head office, shared between different concurrent projects.
  6. Profit
    • The expected profit with allowance for risks.
  7. Tax if charged based on total price (not in Hong Kong which implements profits tax on the realisable profit annually, not value added tax on turnover).
  8. Rates build-up applicable to measured work as well as preliminaries.

Tender pricing

See Tender Pricing for more details.

End of Page

Consultants' Cost Data

Consultants' Cost Data KCTang

Go to End

Note

  • 20/2/2023: Split from "Estimating and Pricing".
  • 18/2/2023: Revised.
  • 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

  1. Tenderers when tendering will get their cost data by making enquiries with their prospective sub-contractors and suppliers.
  2. 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.
  3. 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.
  4. Consultants would therefore rely more on past cost data for cost estimating and for evaluation of tenders.
  5. 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.
  6. When estimating composite rates covering more than one work item, the quantity ratios of the constituent work items would be important.
  7. Rates:
  8. Quantity factors and ratios:
    • Cost Analyses of Other Projects
    • Analyses by sampling.

Adjust for time differences

  1. 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.
  2. 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.
  3. 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.

Index references

  1. Census and Statistics Department - Index Numbers of the Costs of Labour and Materials used in Public Sector Construction Projects
  2. Census and Statistic Department - Average Wholesale Prices of Selected Building Materials
  3. Architectural Services Department - Building Works Tender Price Index
  4. Architectural Services Department - Building Services Tender Price Index
  5. Rider Levett Bucknall Construction Cost Update Hong Kong
  6. Arcadis Quarterly Construction Cost Review Hong Kong and China

End of Page

Cost Geometry 造價幾何

Cost Geometry 造價幾何 KCTang

Go to End

Note

  • 27/2/2023: Revised.
  • 20/2/2023: Split from "Estimating and Pricing".

Cost vs quantity

Not a straight-line relationship between costs and quantities

  1. Cost = f(weight) + f(volume) + f(area) + f(length) + f(number) + f(quality) + f(quality) + f(time) + f(others).
  2. But, the pricing unit of an item of work or material is based on one kind of unit of measurement.
  3. This means that all other costs not related to that unit have to be converted to use that unit as the base.
  4. These other cost factors do not change in direct proportion to the pricing unit.

​​​​​​​Total cost vs quantity

  1. The total cost of factory production (and therefore sales of materials and goods) does not increase in proportion to the increase in the quantity produced, since there are some initial fixed costs (e.g. factory, equipment, rental deposits) and recurring fixed costs (e.g. monthly rents, additional equipment when the existing capacity is exceeded) not in proportion to the quantity to be included.
  2. The total sales value may also not increase in proportion to the increase in the quantity sold (e.g. bulk discount, delivery vehicle not used to full capacity).
  3. The total cost is usually higher than the total sales value initially, but the total sales value must rise up to exceed the total cost eventually for the business to be viable.

Linear items

  1. For linear items, there can be fixed costs which do not change when the length changes.
  2. The unit rate per length can decrease if the length is increased without any change to the fixed components.
    • e.g. 10 m @ $4/m + 2 No. @ $5/No. = $40 + $10 = $50;
      • $50 / 10 m = $5.00/m;
    • while 15 m @ $4/m + 2 No. @ $5/No. = $60 + $10 = $70;
      • $70 / 15 m = $4.67/m.

(revised, 18/2/2023)

Superficial items

  1. For superficial items, the perimeter length increases less rapidly than the increase in the superficial area (300% vs 800% in the table below):
  2. The ratio of perimeter length / area decreases if the area is increased.
  3. This means the unit rate per superficial area would have the same effect.
  4. However, for the same area, the perimeter length can increase considerably if the shape is elongated:​​​​​​​​​​​​​​
  5. The shape is important.

Cubic items

  1. For cubic items, the rates of change of the side area and volume relative to the base area would depend on which dimension is changed:
    • ​​​​​​
  2. For the same height, the volume increases in proportion to the increase in the base area (i.e. fixed volume/base area), while the side area increases less rapidly resulting in a decrease in the side area/base area ratio:
  3. For the same base area, the side area and volume increase in proportion to the increase in the height (as shown in the graph below). Their rates of change are the same:
  4. If both the height and the base area are increased, the volume/base area will increase, but whether the side area/base area will increase or decrease will depend on the relative rates of changes of the height and the base area.
  5. In all cases, the unit cost and unit sales value should therefore not remain constant.
  6. The appropriate unit cost and unit sales value should be determined based on the quantity required, and suitably adjusted in case of changes in the quantity.

(table added, 27/2/2023)

Impact on unit cost and unit rate

  1. Making a unit rate competitive enough to secure sales volume and produce profit is important.
  2. Works or sales contracts usually require the unit rates to be fixed even though the quantities may be varied. If the variation is significant, there can be a huge loss or profit. Some contracts permit the adjustment of the unit rates in case of unexpected big changes.
  3. The quantity of any item of work can vary between different construction projects and how to estimate an appropriate unit rate is crucial.

Breakdown into more or less items

  1. It would be more expedient if less items need to be measured to arrive at the total cost or price.
  2. This means that the unit rate has to allow for the costs of other related items not measured separately.
  3. However, when the costs of other related items do not vary in proportion to the quantity of the item measured, the unit cost of the item measured would change significant to become unrealistic, then such other related items should be measured separately for costing.
  4. Therefore, the unit rates should only be required to include for related items which change in proportion to the quantity measured or for non cost significant ancillary items. Yet, significant changes to the quantity may still make the non cost significant ancillary items to become significant. This is an area for contractual claims.

Building form and shape

  1. Appreciate the effect of different site areas for the same building:​​​​​​​​​​​​
  2. Appreciate the effect of doubling the number of storeys:
  3. Appreciate the effect of elongating the building without increasing the floor area:
  4. ​​​​​​​Unit cost per floor area:
    • Construction costs are usually compared based on unit cost per floor area.
    • The above suggests that the unit cost per floor area cannot be a constant for the same type of buildings of different forms and shapes.
  5. Impact on design:
    • The relationship of number, length, area and volume is more important for the design of the building form and shape.
    • Whether a building is more economical or expensive than the other for the same floor area and type would primarily depend on the ratios of the numbers, lengths, areas and volumes of the building components to the floor areas, and then on the materials and standards.​​​​​​​​​​​

Most significant cost parameters

  1. Appreciate which cost portions should bear more direct proportions to each parameter:
    ​​​​​​​​​​​​​​​​​​​​​​​瞭解那部份的成本內容與那個造價參數有較直接的比例關係:​​​​​​​​​​​​​​
    • ​​​​​​​​​​​​​​
  2. Parameters:
    • Floor area (above ground + below ground)
      樓面面積
    • Ground area (= roof area)
      地面面積 (=屋面面積)
    • Transfer structure area
      轉換結構面積
    • External elevation area
      外立面面積
    • Basement screen wall area or more effectively basement volume of excavation
      地下室外牆面積或較有效的地下室土方體積
    • Site area
      工地面積
    • External area (site area - ground area)
      室外面積
    • Number of equipment
      台數
    • Refrigeration tonnage
      冷噸
    • Other elemental quantities.
      ​​​​​​​其他功能分部工程量。
  3. Quick cost estimating:
    • Using this small number of cost parameters can enable quick cost estimating.
  4. Accurate measurement:
    • The values (quantities) of those parameters which will be used extensively throughout a cost estimate should be accurately measured, unlike the general message here that the cost estimates should be approximate.

End of Page

Cost Factors

Cost Factors KCTang

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Note

  • 20/2/2023: Title changed.
  • 18/2/2023: Revised.
  • 3/3/2022: Modular integrated construction added.
  • 29/3/2021: Full stops added.
  • 2/3/2021: Revised.​​​​​​​
  • 17/3/2020: Created.​​​​​​​

Generally

  1. Cost factors may be asked from different perspectives at different stages:
    • Feasibility study before choosing site:
      • What type of development?
      • Which country and place to invest and develop?
      • Why cost differently between countries, places and sites?
    • Planning and design after fixing site:
      • What design, provisions, types, standards of the whole and its components?
      • Why cost differently?
    • Tendering:
      • Why tender prices so different?
    • Construction:
      • Why original contract sum changes?
  2. Cost factors generally:
    • Some factors affect the quantities, and therefore the total cost.
    • Some factors affect the unit cost per area or unit cost per length (e.g., roads, rails, tunnels, bridges, etc.).
    • Some factors affect the unit rate per quantity of work.
    • Price changes during the post contract stage are excluded here.
  3. Think and brainstorm:
    • The factors can equally apply to other industries or commercial or even social sectors.
    • Common sense knowledge is to be applied.
  4. Classify systematically:
    • There is no absolute answer to "which classification is the best?".
    • A systematic classification should help people think further systematically in the future and present the more relevant factors systematically depending on the perspective and stage.

(3 and 4 added, 2/3/2021)

No fixed prices

  1. One important thing to learn is that there is no fixed (constant) set of unit prices in any economy, as evidenced by the many factors suggested.
  2. Free market economies operate on free market competition of the prices. They would only regulate prices for using government services and some public utility services.
  3. The mainland, China used to fix a constant set of unit prices (by issuing standard price books) with moderate periodic inflationary adjustments but when foreign materials and equipment using foreign currencies are involved, the price fluctuations can become serious. After opening up the market, the mainland has admitted significant free market competition though some measures to regulate the prices are still implemented.
  4. Hong Kong operates as a free market economy. Therefore, there is no fixed set of unit prices for construction works. An exception to this is that Hong Kong Government publishes Schedule of Rates for term contract works. See notes at the end.

(Section added, 2/3/2021)

Reasons for variances in unit rates in the same city

  1. Even for work items of the same description, the rates can be quite different between projects due to various reasons.
  2. Design:
    • Functions
    • Materials and construction
    • Standard.
  3. Site location:
    • ​Transportation
    • Restrictions.
  4. Construction:
    • Project size
    • Extent of mechanization
    • Extent of standardization
    • Extent of repetition
    • Extent of pre-fabrication
    • Volume of bulk purchasing
    • ​Workmanship
    • Weather
    • Extent of safety measures
    • Extent of environmental protection measures.
  5. Economic environment:
    • Level of market competition
    • Exchange rates
    • Time differences.
  6. Contractual:
    • Degree of contractual risks
    • Harshness of contract terms
    • Payment terms
    • Degree of design liability and statutory submission obligations
    • Extent of warranties.
  7. Human factors:
    • Consultants’ attitude
    • Owners and occupiers’ attitude and co-operation
    • Tenderers’ pricing strategy in distributing the costs, profit and overheads differently across different work sections.

(Section added, 2/3/2021)

​​​​​​​Country (assuming putting a done design to a different country)

  1. Different planning and design regulations.
  2. Different environmental requirements.
  3. Different tax requirements.
  4. Planned economy or free market economy.
  5. Significance of government intervention.
  6. Different purchasing power of local currencies.
  7. Availability of foreign currencies.
  8. Availability of local supply of labour, materials, plant and management.
  9. Degree of reliance on foreign supply of labour, materials, plant and management.
  10. Different requirements on holidays and restriction on working hours.
  11. Different productivity of local labour.
  12. Different extent of availability of public roads and utilities.
  13. Different degree of ease of evacuation of existing occupiers.
  14. Significance of corruption.

Site location and conditions

  1. Extreme climatic conditions: hot, cold, frozen work period, typhoon.
  2. Seismic zones.
  3. Existing status of use: greenfield or brownfield.
  4. Existing type of use: urban, rural or agricultural.
  5. Existing site topography: flat, hilly, mountainous, offshore, etc.
  6. Ground conditions: soft, rocky, reclaimed, submerged, swampy.
  7. Obstructions underground and above-ground.
  8. Availability of public roads and utilities.
  9. Ease of evacuation of existing occupiers.
  10. Congested site or sufficient space for storage and maneuvering.

Planning and design

  1. Functional type of the building or civil engineering construction.
  2. Class and standard of the construction.
  3. Planning and design regulations for different sites and constructions.
  4. Environmental requirements.
  5. Structural form of the construction (brick, reinforced concrete, steel, timber, composite).
  6. Plan shape of the construction. (Different elevation area to floor area ratios. Square building costs less than rectangular building on external elevations.)
  7. Storey height. (Storey height will affect the vertical elements of the building both internally and externally. Higher storey height will increase the volume of the building to be heated or cooled, and therefore HVAC services.)
  8. Number of storeys. (Different shares of the roof and ground slab and beam costs. Need to have staircases for non-single storey buildings. Need to have lifts and refuge floors for tall buildings.)
  9. Height of the construction. (Heavier loading on taller buildings.)
  10. Orientation of the construction. (Thermal transmission on external surfaces. Use of sunlight.)
  11. Impact on neighbouring properties.
  12. Extent of provision of construction components.
  13. Functions, materials and quality of components.
  14. Extent of site works and external works shared by the main construction (affecting unit cost per area or length).

Economic environment

  1. Stability of economy.
  2. Forecast of cost fluctuations.
  3. Level of market competition.
  4. Exchange rates and their changes.
  5. Time differences (if compared between projects at different times).

Construction

  1. Project size.
  2. Period of construction and its reasonableness.
  3. Ease of transportation.
  4. Access restrictions.
  5. Changing labour, material and plant costs over time.
  6. Extent of plant required and availability of plant.
  7. Availability of supervisory staff.
  8. Extent of hoardings, covered walkways, scaffolding required.
  9. Extent of temporary works required.
  10. Extent of safety measures required during construction.
  11. Extent of environmental protection measures required during construction.
  12. Extent of mechanisation.
  13. Extent of standardisation.
  14. Extent of repetition.
  15. Extent of pre-fabrication.
  16. Volume of bulk purchasing.
  17. Workmanship expected.
  18. Weather which may be encountered.
  19. Availability of temporary water and electricity.
  20. Risks of safety, health, environmental hazards.
  21. Risks of changing government policies and neighbourhood and social expectations.

Contractual

  1. Procurement method.
  2. Degree of contractual risks.
  3. Harshness of contract terms.
  4. Payment terms.
  5. Degree of design liability and statutory submission obligations.
  6. Extent of insurances, bonds and warranties.

Tenderers' ability and perception (causing differences in tender rates)

  1. Labour, material and sub-contract costs which can be sourced at the time of tendering.
  2. Availability of plant.
  3. Availability of supervisory staff.
  4. Availability of expertise.
  5. Availability of sufficient cash flow or reliance on loans.
  6. Reasonableness of the period of construction.
  7. Consultants’ attitude.
  8. Owners and occupiers’ attitude and co-operation.
  9. Tenderers' profit expectations.
  10. Tenderers’ pricing strategy in distributing the costs, profit and overheads differently across different work sections.

How about modular integrated construction?

  1. Designers’ capabilities.
  2. Statutory requirements.
  3. Factory capabilities.
  4. Early involvement of contractors.
  5. Off-site costs, delivery and logistics, factory’s environmental impact.
  6. On-site storage, hoisting, special jointing, fixings, weatherproofing, fire-resistance.
  7. Shortened period of site overheads.
  8. Local environment impact.
  9. Local workers’ prospect.

End of Page

Pre-Contract Cost Planning and Control 施工合同前造價計劃和控制

Pre-Contract Cost Planning and Control 施工合同前造價計劃和控制 KCTang

Go to End

Note 註

  • 5/3/2023: IPMS revised. Various images updated.
  • 18/2/2023: Revised.
    修改。
  • 8/4/2022: Chinese version partially added. Minor adjustments made.
    添加了部分中文版。進行了細微調整。
  • 16/3/2022: Re-sequencing and minor corrections made.
    進行了重新排序和小幅修正。
  • 10/3/2022: Minor adjustments made.
    進行了細微調整。
  • 7/3/2022: ICMS split out on its own. Cost geometry and most significant cost parameters moved to "Estimating and Pricing".
    ICMS 分拆獨立。造價幾何和最重要的造價參數移至"估算和定價"。
  • 3/3/2022: Minor adjustments made.
    進行了細微調整。
  • 1/3/2022: Updated for ICMS 3 and IPMS.
    針對 ICMS 3 和 IPMS 進行了更新。
  • 23/2/2022: Minor adjustments made.
    進行了細微調整。
  • 18/3/2021: 9 sections added or revised. Punctuation style revised.
    添加或修改了 9 個部分。標點樣式修改。
  • 13/3/2020: Usual payment terms added.
    添加了通常的付款條件。
  • 26/2/2020: Minor adjustments made.
    進行了細微調整。
  • 20/12/2014: Moved from wiki.
    從 wiki 移來。

Pre-contract cost management 施工合同前的造價管理

  1. Principal cost management tasks during the pre-contract stage:
    施工合同前的主要造價管理任務:
    • Prepare cost estimates or cost plans
      編製估算概算或造價計劃
    • Prepare cash flow tables
      編製現金流量表
    • Attend design meetings
      參與設計會議
    • Monitor the design
      監控設計
    • Adjust the cost estimates and reconcile
      調整估算概算及解釋變化
    • Compare alternatives.
      比較備選方案。
  2. Estimate, plan, update and control.
    估計、計劃、更新和控制

Need for pre-construction cost estimates 為何需要施工前概算

  1. Know the costs for investment decisions:
    知道成本造價以作投資決定:
    • Calculate land bid price
      計算買地投標價
    • Calculate acceptable rental
      計算可接受的租金
    • Evaluate the feasibility of the investment.
      評估投資的可行性。
  2. Establish a project (development) budget.
    確定發展項目的投資預算。
  3. Obtain funding.
    獲取資助。
  4. Borrow money from the bank.
    從銀行借錢。
  5. Formulate a design brief which defines the scope and standard of the project.
    制定設計任務書以說明發展項目的範圍和標準。
  6. Monitor the design development to control the costs within budget.
    ​​​​​​​監控設計的深化以控制不超出投資預算。
  7. Estimate fees or review fee percentage.
    估算顧問費或覆核顧問費率。

Best time to plan and control the costs 計劃和控制造價的最佳時機

  1. As early as possible during the development process.
    在項目發展階段中越早越好。
  2. Better chances to make design changes to find a better solution.
    較有機會修改設計取得更好的方案。
  3. To reduce abortive design costs and time.
    減少設計返工成本和時間。

Ways to calculate cost estimates 計算造價估算的方法

  1. Techniques:
    • Estimates should be done using expedient methods, approximations and shortcuts to reduce estimating time and costs in order to afford more estimates.
  2. Methods:
    • By unit cost per floor area / length / number estimates
    • By measuring the most significant cost parameters
    • By measuring elemental quantities
    • By measuring approximate quantities
    • By pricing the bills of quantities ready for issuance or already issued for tendering.

​​​​​​​​​​​​​​Estimating mottos 四字真言

  1. From big to small.

    由大到小。

  2. From rough to fine.

    從粗到細。

  3. Focus on the important.

    重點出擊。

  4. Make bold assumptions.

    大膽假設。

  5. Verify carefully.

    小心求証。

  6. Compare with the unlike.

    觸類旁通。

  7. Conduct self-checking.

    自我覆核。

  8. Reconcile with the previous.

    瞻前顧後。

  9. Empathize with the Client.

    ​​​​​​​設身處地​​​​​​。

(gerunds changed to verbs, 8/4/2022)

​​​​​​​Different names of pre-construction cost estimates 概算的不同名稱

  1. Rough Indication of Costs ("RIC").
    大約估算。
  2. Preliminary Indication of Costs.
    初步估算指標。
  3. Preliminary Cost Estimates.
    概算。
  4. Elemental Cost Estimates.
    功能分部概算。
  5. Cost Plans.
    成本計畫。
  6. Cost Models (An American term).
    成本模型 (美式用詞)。
  7. Pre-tender Estimates.
    標底。

Budgets, cost estimates and cost plans

  1. Budget:
    • A budget is the maximum sum a Developer is willing and able to spend on a project.
  2. Cost estimate:
    • A cost estimate is a forecast of the probable ultimate cost based on the current design.
    • It is required to be done throughout the pre-construction stages as well as the construction stage until the estimated costs become fixed prices.
    • A cost estimate for now, if satisfactory and approved, will become the cost plan for the future design.
  3. Cost plan:
    • A cost plan is a detailed cost framework for controlling future design.
    • It sets out the portions of the total budget allocated to different parts of the construction so as to serve as the cost limits to the relevant parts of the construction.
    • It may just be based on some interpolation from the cost data of other projects or may be based on some detailed cost estimate specifically prepared for the relevant design.
    • It usually refers to the cost plan before the award of the principal contract. After that, the cost plan will be replaced with regular final statements.
  4. Rough indication of costs ("RIC"):
    • It is a kind of cost estimates. It may be just based on unit cost / number or unit cost / floor area or unit cost / other functional unit to be used in the feasibility study or early design stage based on some ideas or sketch designs
    • HK ArchSD still calls it "Rough Indication of Costs" when the estimate is still in the early stage though the details may be more than just based on unit cost per floor areas.
  5. Approximate estimate:
    • Approximate estimates should be done using expedient methods, approximations and shortcuts to reduce estimating time and costs in order to afford more estimates.
    • This principle should be applied to pre-construction cost estimates or post contract cost estimates.
  6. Detailed cost estimate:
    • It is a more detailed cost estimate prepared when the design is more developed.
    • "Detailed" refers to the number of items measured, rather than to the accuracies of the quantities estimated.
    • Some consultants call it "Preliminary Cost Estimate", and some call it "Cost Plan".
    • It may become the Budgetary Estimate if approved.
  7. Pre-tender estimate (按工程量清單計算標底):
    • A pre-tender estimate is no longer an approximate estimate and is prepared by pricing the bills of quantities ready for issuance or already issued for tendering.
  8. A logical sequence is like this:
    • Rough Indication of Costs => Detailed Cost Estimate => Cost Plan / Budgetary Estimate => Pre-tender Estimate.

(revised, 18/2/2023)

Elemental cost classifications

  1. Trade by trade classifications:
    • Pricing documents for tendering are usually arranged in trade by trade or works section orders or work breakdown structures according to the local standard method of measurement or local practice.
  2. Elemental cost classifications:
    • Instead of following the same order, pre-construction cost estimating in many countries (not all) adopt an elemental cost classification, which divides the costs of a construction project into various parts ("elements") each serving a specific function or common purpose such that the costs of alternatives serving the same function or purpose can be compared, evaluated and selected irrespective of their trades, works sections, design, specification, materials or construction.
  3. Classifying the costs of a building (or other construction) into elements would facilitate:​
    • Comparison of the costs of different design options serving the same elemental function
    • Comparison with costs of other projects by elements
    • Rationalizing the budget allocation between different elements for better use
    • Quicker estimating based on elemental quantities which are easier to measure
    • Analysis of data for different projects on the same basis and classification.
  4. Different elemental cost classifications in Hong Kong:
  5. Many other places outside Hong Kong also have their own elemental cost classification systems, e.g.:
  6. ICMS:

(revised, 5/3/2023)

Construction floor area and gross floor area in Hong Kong

  1. Different areas:
    • For costing, leasing and sales of buildings and related land, people usually have to refer to unit cost or price per floor area of the buildings as the most important controlling parameter.
    • However, there are many types of floor areas being defined for different purposes in Hong Kong or other places outside Hong Kong. An understanding of their possible differences is important.
  2. CFA:
    • Quantity Surveyors measure the construction floor area (CFA) in order to estimate the total construction cost of a building.
  3. GFA:
    • Lands leased by the Government in Hong Kong are subject to limitation on the gross floor areas (lease GFA) of the buildings which may be built on the land. Some of the construction floor area is not accountable for the lease GFA. The Lands Department is responsible for the control. Read the Lands Department's Practice Note on Accountable and Non-Accountable GFA under Lease at https://www.landsd.gov.hk/en/images/doc/1998_1A_text.pdf.
    • Building plans have to be submitted to the Buildings Department for approval and consent before construction. The gross floor areas (GFA) are also controlled by the Buildings Regulations. Read the Buildings Department's Practice Note on Calculation of Gross Floor Area and Non-accountable Gross Floor Area at https://www.bd.gov.hk/doc/en/resources/codes-and-references/practice-notes-and-circular-letters/pnap/APP/APP002.pdf.
    • The Lands Department's Practice Note says while the Lands Department is usually prepared to follow the Buildings Department's ruling in exemptions from GFA calculations, it reserves its right and absolute discretion to do otherwise in individual cases.
  4. Saleable area:

International Property Measurement Standards (IPMS)

  1. The International Property Measurement Standards at https://ipmsc.org/standards/ are intended to unify the rules of measurement of various kinds of floor areas for different types of buildings.
  2. A single harmonised standard covering All Buildings has been published on 15 January 2023 to supersede all previously published standards for individual asset classes.
  3. IPMS 1 (gross external floor area) and IPMS 2 (gross internal floor area) are referred to by ICMS.
  4. Read this and appreciate the diagrammatic illustration.
  5. CFA in Hong Kong is close to IPMS 1 with one exception: accessible rooftop terraces are included in IPMS 1 but not in Hong Kong CFA.

(revised, 18/2/2022, 5/3/2023)

Need for historical cost analyses

  1. Before talking about the cost estimates, it may be appropriate to talk about cost analyses first.
  2. Cost analyses are needed to:
    • Benchmark new projects
    • Provide cost data for new estimates
    • Provide cost parameters for new estimates​​​​​​​.

(revised, 18/2/2023)

Cost analyses

Example adopting ICMS

​​​​​​​​​​​​​​

(image updated, 5/3/2023)

Classify total costs

  1. A cost analysis analyses the awarded or final prices of a project and re-classify the costs following the same classification used for the cost estimates or cost plans.
  2. When classified in elemental format, the cost of each element or sub-element is summed up into a single line item.
  3. The cost is called “elemental cost” in Hong Kong.

Identify elemental quantities

  1. A single representative quantity is measured for that line item.
  2. The single quantity is called "elemental quantity" in Hong Kong. “representative” means that the quantity can best represent the cost changes in case of quantity changes.

Get elemental unit rates

  1. The cost of that cost item is then divided by the elemental quantity to give a single all-inclusive rate.
  2. The single all-inclusive rate is called "elemental unit rate" in Hong Kong.
  3. That means:
    • elemental cost / elemental quantity = elemental unit rate,
    • or
    • elemental quantity x elemental unit cost = element cost,
    • depending on the order of presenting the columns in table form.
  4. The elemental unit rates are very useful when the cost of a new project is required to be estimated before any detailed design is available.

Apply the elemental unit rates to new projects

  1. Elemental quantities can be measured for the new project and priced at elemental unit rates of the reference projects.
  2. There are not too many items of elemental quantities to be measured. The cost estimating process can therefore be very fast.
  3. Of course, the elemental unit rates may not be directly applicable to the new project.
  4. It should at least be adjusted for the changes in the price levels from the times it was applicable to the reference project to the time of the new project, and then for other changed factors.

Get quantity ratios or factors

  1. A cost analysis should also contains quantity ratios or factors such as:
    • elevation area : floor area
    • concrete volume per floor area
    • formwork area per concrete volume or floor area
    • rebar weight per concrete volume or floor area
    • etc.
  2. These quantity ratios can serve as useful references when estimating the costs of new projects.
  3. Apart from using the data in a cost analysis to estimate the cost of a new project in the absence of detailed design, the data can also be used to benchmark the cost of a new project after a more detailed cost estimate is done to ensure that the new project would not go out of order.
  4. Hong Kong Government uses this technique to control the costs of new project at the design stage.
  5. The Architectural Services Department has published a very detailed Project Cost Analysis Form.

Changes in cost and price levels

  1. Due to changes in the market conditions, the unit rates for exactly the same description of work may change over time.
  2. The market conditions may include fluctuations in the costs of labour, materials and plant, market competition, and other factors.
  3. Unit rates applicable in the past would need to be adjusted to the current level.
  4. Tender price or cost indices are therefore prepared to provide the adjustment factors.
  5. Their differences should be appreciated.
  6. Tender price indices and cost indices can fluctuate at different rates because price = cost + profit, and the price may increase less than the cost increase in order to secure projects or may increase more in case the market is full.

​​​​​​​(revised, 18/2/2023)

Different methods of approximate cost estimating 計算概算的方法

Different methods

  1. Unit method (common).
  2. Superficial method or area method (common).
  3. Cubic method (seldom used for buildings).
  4. Storey enclosure method (seldom used now).
  5. Elemental cost estimates (common):
    • Elemental quantity method
    • Approximate quantity method.
  6. Condensed elemental method using the most significant cost parameters.

Pre-tender estimate:

  1. A pre-tender estimate is no longer an approximate cost estimate and is prepared by pricing the bills of quantities ready for issuance or already issued for tendering.

Unit method (按功能單元個數計算)

  1. The estimated cost of a building is calculated based on the number of functional units provided by the building x unit cost per functional unit.
  2. ICMS has suggested the following functional units for buildings: number of occupants | number of bedrooms | number of hospital beds | number of hotel rooms | number of car parking spaces | number of classrooms | number of students | number of passengers | number of boarding gates.
  3. The unit method is a crude method serving as an early indication of the probable order of cost of the average building of the relevant type.
  4. It is not useful for forecasting with a high degree of accuracy the costs of newly proposed buildings of the same type because their designs can be very different.
  5. However, it may be used by clients and in particular government departments to serve as a cost yardstick controlling the budget of newly proposed projects.
  6. It is still also useful to serve a check that a unit cost per floor area may sound reasonable but, when expressed in unit cost per functional unit, the unit cost can be out of order because of excessive floor area per functional unit.

Superficial method or area method (按樓面積計算)

  1. The estimated cost of a building is calculated based on the floor area of the building x unit cost per floor area.
  2. This is the most commonly used method, possibly because the sales and rental prices are also expressed in unit cost per floor area.
  3. Note however that there are many definitions of "floor area". The same definition should be consistently applied.

Cubic method (seldom used for buildings) (按樓體積計算(現少用))

  1. The estimated cost of a building is calculated based on the volume of the building x unit cost per volume.
  2. In theory, the volume can take care of the different storey heights of the building.
  3. This is not commonly used probably because the floor areas are more readily available, and calculating the volumes would mean a further step to be done.
  4. The cubic method may be useful for site formation works or civil engineering works involving massive volume of work.

​​​​​​​Storey enclosure method (seldom used now) (按樓板及外殼面積加權計算(現少用)

  1. In essence, the estimated cost of a building is calculated based on the total of the weighted areas of bottom slabs (basement or ground), suspended floor slabs, roof slabs, and walls below and above ground x unit cost per total weighted area.
  2. Each type of slabs or walls are given different fixed weightings to reflect their relative ratios of costs.
  3. The calculation is much more complicated than the superficial method or the cubic method.
  4. With so many varieties of construction components and materials, whether the fixed weightings can truly reflect the relative ratios of costs is doubtful.
  5. This method is seldom used these days.
  6. Search the internet for details and examples.

(revised, 18/2/2023)

Elemental quantity method (按功能分部工程量計算)

  1. The building cost is classified into different elements (or Groups or Sub-Groups as used in ICMS as shown under the "Sections" column in the example below which follows ICMS classifications).
  2. Each element is represented by an appropriate elemental quantity which best represents the elemental cost (i.e., changing proportionally).
  3. It can be seen from the example below that the elemental quantities generally adopt the values of the most significant cost parameters discussed here and below.
  4. The estimated cost of a building is calculated based on the total of (elemental quantity x elemental unit rate).
  5. It takes into account the different forms, provisions and standard of the proposed new building better than the average unit cost per floor area.
  6. It is therefore a more accurate method than the superficial method.
  7. However, while the elemental quantities are simple to measure, the elemental unit rates would rely on reliable cost data from other projects or may need careful build-ups.
  8. This method should only be used at the early stage of design.
  9. At the time of the elemental quantity cost estimates, there would not be much details to measure approximate quantities and one has to rely on past cost analyses or some estimated quantity factors and ratios to estimate the elemental unit rates.
  10. The elemental unit rates, quantity factors and ratios should be critically reviewed to see whether they should remain unchanged or adjusted when the design of the building is changed even though the elemental quantities can remain unchanged.
  11. The price levels of past projects must be adjusted to the present day for use.

(image updated, 5/3/2023)

Approximate quantity method (按分項大約工程量計算)

  1. The estimated cost of a building is calculated based on the total of (approximate quantity of major item of work x unit rate per quantity of major item of work inclusive of costs of minor items):
  2. It does not usually show the elemental quantities and elemental unit rates just to save time.
  3. As the design is more developed, it is possible to measure the work constituting the building more accurately and apply more appropriate unit rates relevant to the materials and standard chosen.
  4. The quantities are approximate to reduce the time to measure so that a quicker cost estimate can be produced to reflect the updated cost of the design and enable any subsequent measures to control any unexpected costly design.

(image updated, 5/3/2023)

Condensed elemental method using the most significant cost parameters

  1. Users of the elemental quantity method may find that many elemental quantities are the same for different elements and can in fact be reduced into a few most significant cost parameters:​​​​​​​​​​​​
    • Floor area (above ground + below ground)
    • Ground area (= roof area)
    • Transfer structure area
    • External elevation area
    • Basement screen wall area or more effectively basement volume of excavation
    • Site area
    • External area (site area - ground area)
    • Number of equipment
    • Refrigeration tonnage
    • Other elemental quantities.
  2. The estimated cost of a building is calculated based on the total of (quantity of the above cost parameter x composite unit rate per quantity of cost parameter).
  3. This can provide a quick and equally reliable cost estimate though not as detailed as the elemental quantity cost estimate.

​​​​​​​​​​​​​Contents of cost estimates ​​​​​​​概算的內容

  1. Cover page:
    • Estimate Number
    • Project Name
    • Project Location
    • Estimate Date
    • List of Contents (if simple enough to list here)
    • Consultants’ Names.
  2. Contents page (for longer list)
  3. Grand Summary (in table form):
    ​​​​​​​大匯總:

    • Total Cost of Each Section of the Project
      建設項目每區域的總造價
    • Floor Area of Each Section
      每區域的樓面面積
    • Unit Cost per Floor Area.
      ​每區域的樓面面積的單價。
  4. Descriptions:
    編製說明:

    • Project Name
      項目名稱
    • Project Location
      項目地點
    • Scope of the Estimate
      估算範圍
    • Areas:
      面積:
      • Construction Floor Area / Covered Floor Area
        建築面積/有蓋樓面面積
      • Ground Area
        地面面積
      • Site Area
        地塊面積
      • Lease Gross Floor Area
        地契樓面面積
      • (Non-)Accountable GFA
        可豁面/不豁面地契樓面面積
      • Bay Window Area
        窗臺面積
    • Basis of the Estimate:
      估算依據:
      • Drawings used
        依據的圖紙
    • Price Levels:
      價格水準:
      • Current Prices
        現行價格
      • Fluctuations from Date of Preparing the Estimate to Tendering
        由編製到招標的價格浮動
      • Fluctuations from Tendering to Completion of Construction
        由招標到竣工的價格浮動
    • Outline Specification of Design and Materials
      分部設計及用料大綱
    • Finishes Schedule
      裝飾表
    • Exclusions.
      不包項目。
  5. Elemental Summary of each Section (in table form):
    每區域的功能分部匯總:

    • Floor Area of the Section
      該區域的樓面面積
    • Item Reference
      項目編碼
    • Total Cost of Each Element of the Section
      該區域的每功能分部總造價
    • Unit Cost per Floor Area
      每功能分部的樓面面積單價
    • % Proportion of each Element.
      每功能分部所占百分比。
  6. Detailed Build-up (Arranged by Elements or Cost Groups):
    ​​​​​​​​具體項目(按功能分部排列):

    • ​Item Reference
      ​​​​​​​編碼
    • Descriptions
      子目說明
    • Quantities (rounded off to tens or thousands)
      數量(拾位元或百位元整數)
    • Rates (rounded off to two significant figures)
      單價(兩個有效數字)
    • Extension (rounded off to ten thousands)
      合價(萬位元整數)
    • Elemental Totals
      功能分部總價
    • Possible additional information:
      可能的附加資料:

      • Elemental Quantities
        功能分部數量
      • Unit Costs per Elemental Quantities.
        ​功能分部單價。

​​​​​​​Adjust published unit costs per floor area

  1. Some Consultant QS firms publish unit costs per floor area for public information.
  2. When using these unit costs, care should be exercised to understand the scope of inclusions and exclusions, and their applicability.
  3. The General Practice Division of the Hong Kong Institute of Surveyors has published a Building Cost Pro-Forma for Private Sector Developments in Hong Kong.pdf.
  4. This should serve as a useful checklist, but the items and figures suggested there should be verified for individual projects.

Presentation of cost estimates

  1. Rounding off:
    • The quantities, unit rates and costs should be suitably rounded off.
  2. Word wrapping:
    • Text in table cells should be word-wrapped to avoid hiding of text at the end.
  3. Comparison tables:
    • When the cost estimates need to give comparison tables to show different options and the differences between options to help reading and appreciation of the relative costs, instead of showing all the columns of each option together, the columns can be re-arranged in the following sequence to save some space and enable easier reading:

Item

Section

Elemental Cost
HK$

Difference from Original HK$

Cost per m2 CFA
HK$

Remarks

Original

Option 1

Option 2

Option 1

Option 2

Original

Option 1

Option 2

Option 1

Option 2

Item

Section

Elemental Qty

Elemental Unit and Description

Elemental Unit Rate

Remarks

Original

Option 1

Option 2

Original

Option 1

Option 2

Option 1

Option 2

  • When spanning over more than one page, the Item and Section columns and column header rows should be repeated.
  • The contents under the Remarks columns can be very flexible, for adjustment methods, calculations, rationale, etc., subject only to space limitation.
  • The remarks can be “Assumed no change”, “Original qty x 2”, “Original rate x 1.2”, etc.
  • If there is not enough space, and the remarks are repeating, just insert “(a)”, “(b)”, “(c)”, in the Remarks columns, and define them below the table to mean:
    • Legend:
    • (a) Assumed no change
    • (b) Original qty x 2
    • (c) Original rate x 1.2 for higher rate due to complexity.
  • Instead of showing the quantity and rate adjustments separately, the adjustment can be made directly against the cost, such as:
    • Legend:
    • (a) Option 1 CFA / Original CFA = 2
    • (b) Original cost x 2
    • (c) Original cost x 2 x 1.2 for higher rate due to complexity
    • (d) Original cost x (new elemental qty / original elemental qty) x (new elemental unit rate / original elemental unit rate).
  • Example (d) can in fact save the need to show the columns for elemental qty, unit and unit rates.
  • The adjustment calculations can also cover inflationary factors.

Comments on specific ICMS Sub-Groups

Foundation piling

  1. Scope:
    • This Sub-Group includes all foundation piling underneath the building with or without basement.
  2. Elemental quantity:
    • Foundation piling supports the whole building.
    • Its costs are more related to the total construction floor area (CFA) of the building including the basement CFA, which should be used as the elemental quantity.
    • Elemental unit rate:
      • Equals to unit cost per construction floor area based on some similar projects.
  3. Approximate quantities:
    • The costs can be estimated, after consulting the Structural Engineer for a preliminary design, based on:
      • Piling plant mobilisation and demobilisation – Item
      • Piles – Number with each length/depth stated or total length/depth
      • Pile testing – Item.
    • It should be noted that the pile depths in ground and the pile core lengths are two different things.
    • All ancillary work not measured should be allowed for in the rates.

Foundations up to top of lowest floor slabs

  1. Scope:
    • This Sub-Group includes that shown in blue below (pile caps, footings, substructure columns and walls, and lowest floor slabs and beams) beyond the footprint of the basement, and excludes foundation piling.
    • Foundations (excluding piles) underneath the basement are usually integrated with the basement bottom and should therefore be included in the “Basement sides and bottom”.
    • Therefore, this Sub-Group's costs are not related to the basement footprint or the basement floor areas.
  2. Elemental quantity:
    • Pile caps, footings and substructure columns and walls, which support the whole building, are more related to the total CFA and building height.
    • Lowest floor slabs and beams are more related to the ground area (GA) of the building.
    • On the conservative side, the total CFA should be used as the elemental quantity to obtain the elemental unit rate for future references.
    • However, when applying this elemental unit rate to a building of significantly different building height and different CFA to GA ratio (approximately equal to the number of floors), the elemental unit rate can be broken into two parts for application.
    • For example, from the cost analysis of a reference building:
    • The unit rates at (a) and (d) can then be applied to the proposed building, subject to further adjustments for other dissimilarities.
    • Similar method can be adopted to split the elemental unit rates into different parts to handle those parts which do not vary in proportion to the elemental quantity.
  3. Approximate quantities:
    • For approximate quantity cost estimates, the costs can be, after consulting the Structural Engineer for a preliminary design, estimated based on:
      • Excavation (rates to include disposal) – volume of excavation from commencing level of excavation to bottom of blinding layer with allowance for working spaces beyond the volume of the concrete work
      • Lateral supports in the form of planking and strutting for shallow excavation – allowed for in the rates for excavation
      • Lateral supports in the form of planking and strutting for deep excavation – as described for “Basement sides and bottom”
      • Raft footings, pile caps, column bases, wall footings, strap beams and tie beams – concrete volume, formwork area and reinforcement weight
      • Substructure walls and columns – ditto
      • Lowest floor slabs and beams – ditto
      • Lift pits – number.
    • ICMS gives a good checklist of the above.
    • All ancillary work not measured should be allowed for in the rates.
    • The concrete member sizes can be based on the preliminary design drawings.
    • Simplification into approximate average sizes x number can speed up the measurement.
    • It may even be quicker to estimate the average thickness per the building footprint from the preliminary design drawings or from some reference projects of similar height or adjusted for the differences in heights.
    • Following the same logic, the composite elemental unit rate build-up can be as follows:
      • Average concrete thickness / building footprint @ $/m3
      • Average formwork area / building footprint @ $/m2
      • Average concrete thickness / building footprint x steel ratio kg/m3 concrete @ $/kg
      • Average excavation depth / building footprint @ $/m3
      • Sum of the above = composite rate / building footprint
    • Of course, the concrete thickness and steel ratio should have taken into account the building height.

Basement sides and bottom

  1. Scope:
    • This Sub-Group includes that shown in blue below (sides and bottom) of a basement and excavation for the basement, and excludes foundation piling.
  2. Elemental quantity:
    • This is a difficult Sub-Group for choosing the appropriate elemental unit because:
      • part of its costs is related to the volume of the basement (excavation, disposal, and shoring and strutting)
      • part related to the basement footprint (basement bottom)
      • part related to the side area (basement side and vertical retaining support which can be twice the basement depth).
    • The volume of the basement should be the best choice for use as the elemental quantity.
    • The basement floor area may also be a reflection of the volume.
    • However, it would be better to estimate the costs from a number of approximate quantities rather than a single elemental quantity.
  3. Approximate quantities:
    • For approximate quantity cost estimates, the costs can be, after consulting the Structural Engineer for a preliminary design, estimated based on:
      • Excavation (rates to include disposal) – volume of excavation from commencing level of excavation to bottom of blinding layer with allowance for working spaces beyond the volume of the concrete work
      • Vertical lateral support – area of excavated surfaces retained (from commencing level of excavation to bottom of blinding layer) x 2 or more to account for the embedded depth below the blinding layer
      • Horizontal or raking shoring to lateral support - area of excavated surfaces retained (suitable for raking shoring) or volume of excavation (suitable for flying shoring, i.e. horizontal shoring spanning across the whole site with intermediate vertical posts to support), unless more detailed measurement is used
      • Bottom slabs and blinding (including all foundations underneath but excluding piles) – concrete volume, formwork area and reinforcement weight
      • Basement sides – area
      • Vertical waterproof tanking, drainage blanket, drains and skin wall – area of tanking
      • Horizontal waterproof tanking, drainage blanket, drains and topping slab – area of tanking
      • Insulation – area
      • Lift pits, sump pits, sleeves – number of lift pits and sump pits.
    • ICMS gives a good checklist of the above.
    • All ancillary work not measured should be allowed for in the rates.
    • The concrete member sizes can be based on the average thicknesses from the preliminary design drawings or from some reference projects of similar height or adjusted for the differences in heights.
    • Simpler cost build-up can take the following form:
      • Volume of excavation – composite rates to cover excavation, disposal, and horizontal or raking shoring per m3 of excavation
      • Area of basement bottom – composite rates to cover all horizontal elements, with different ratios per basement bottom area to account for different elements
      • Area of basement sides – composite rates to cover all vertical elements, with different ratios per basement side area to account for different elements
      • Lump sum – to cover other standalone elements.

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Basement suspended floors (up to top of ground floor slabs)

  1. Scope:
    • This Sub-Group includes all structural walls and columns, beams, slabs and staircases inside the basement, but excludes basement sides and bottom.
  2. Elemental quantity:
    • The elemental quantity should be the CFA of the basement.
    • Elemental unit rate build-up (per basement CFA):
      • Similar to that for the "Frames and slabs".

Frames and slabs (above top of ground floor slabs)

  1. Scope
    • This Sub-Group includes all structural walls and columns, beams, slabs and staircases above the top of ground floor slabs.
  2. Elemental quantity
    • The elemental quantity should be the CFA above ground, not the total CFA including the basement CFA.
    • Elemental unit rate build-up (per CFA above ground):
Concrete m3 concrete / m2 floor area @ $/m3
Formwork m2 formwork / m2 floor area @ $/m2
Reinforcement

kg reinforcement / m3 concrete

x m3 concrete / m2 floor area

or

kg reinforcement / m2 floor area

@ $/kg
  • The quantity ratios are usually based on some similar projects or by sampling based on a typical bay.

Roof beams and slabs for Buildings under "Structure"

  1. Scope:
    • Roofs can occur at the top of buildings or at lower floors. Any suspended floor without cover above is considered as a roof.
    • “roof beams and slabs” for Buildings should also include such roofs at the top or at lower floors.
    • In principle, the roof area on plan at various levels should be equal to the projected building footprint area on plan.
      • ​​​​​​​
  2. Elemental quantity:
    • The elemental quantity should be the roof area if roof beams and slabs are separately estimated.
    • Otherwise, it should be part of the total CFA including the basement CFA.

External elevations

  1. Scope:
    • This Sub-Group includes all external walls including applied finishes, cladding, curtain walls, windows, doors, shop fronts and shutters on the external elevations, but excludes external structural walls.
  2. Elemental quantity:
    • The elemental quantity should be the external elevation area.
    • ICMS defines it as "total area of external wall finishes, facade cladding and curtain walls, windows, doors, shop fronts, roller shutters, fire shutters, etc. on the external elevations including all surfaces of

      external railings, parapets and features, but ignoring the presence of canopies".

    • Elemental unit rate build-up (per elevation area):
Aluminium windows a% elevation area @ $/m2
Finishes on structural walls, columns and beams b% elevation area @ $/m2
External non-structural walls and finishes c% elevation area @ $/m2
Roller shutters d% elevation area @ $/m2
  • a%+b%+c%+d% = 100% elevation area.
  • The percentages are approximate proportions of the total external elevation area of a sampled section of the elevation.

Roof finishes, skylights and landscaping (including waterproofing and insulation)

  1. Scope:
    • This Sub-Group include those to such roofs at the top or at lower floors.
  2. Elemental quantity:
    • Roof area
    • Element unit rate build-up:
      • Similar to other Sub-Groups.

Internal divisions

  1. Scope:
    • This Sub-Group includes ​​​​​​​​​​​​​​​​​​​​​all kinds of divisions including internal windows, doors and shutters.
  2. Elemental quantity:
    • The elemental quantity can be the total CFA including the basement CFA.
    • Element unit rate build-up (per CFA):
Internal non-structural concrete walls m2 walls / m2 floor area @ $/m2
Internal brick walls m2 walls / m2 floor area @ $/m2
Doors No. of doors / m2 floor area @ $/No.
etc.    
  • The quantity factors are based on a similar project or approximate wall areas per construction floor area of a sampled floor, which layout may be just an educated guess.
  • The wall areas have door openings deducted.
  • The elemental quantity can also be the total wall areas without deducting door openings
  • The elemental unit rate build-up will then be (per total wall area):

Internal non-structural concrete walls a% of wall area @ $/m2
Internal brick walls b% of wall area @ $/m2
Extra for doors No. of doors / m2 wall area @ $/No.#
etc.    
  • a% + b% = 100%.
  • # = after deducting cost of wall.
  • The percentages are approximate proportions of the total wall area of a sampled floor, which layout may be just an educated guess.

Fittings and sundries

  1. Scope
    • This Sub-Group basically includes all the metal work and joinery, and interior landscaping.
  2. Elemental quantity
    • The elemental quantity can be the total CFA including the basement CFA, or the relevant functional quantity.
    • Elemental unit rate:
      • Generally based on similar projects.

Finishes under cover

  1. Scope
    • This Sub-Group includes all floor and ceiling finishes and false ceilings whether internal or external, and internal wall finishes and cladding.
  2. Elemental quantity
    • The elemental quantity can be the total CFA including the basement CFA.
    • Elemental unit rate build-up of floor finishes (internal and external) (per CFA):
Floor finish A a% of floor area / CFA @ $/m2
Floor finish B b% of floor area / CFA @ $/m2
Floor finish C c% of floor area / CFA @ $/m2
Add 10% for skirting    
  • a%+b%+c% = an estimated percentage of floor area / CFA after deducting voids, and wall and column base areas, i.e. less than 100% of CFA.
  • Elemental unit rate build-up of internal wall finishes and cladding (per CFA):

Wall finish A a% of wall area / CFA @ $/m2
Wall finish B b% of wall area / CFA @ $/m2
Wall finish C c% of wall area / CFA @ $/m2
  • The quantity factors are based on a similar project or approximate internal wall finishes areas per CFA of a sampled floor, which layout may be just an educated guess.
  • Note the approximate formula: internal wall finishes = internal wall area x 2 + external wall area.
  • False ceiling voids and unfinished lift shafts would affect this formula.
  • Elemental unit rate build-up of ceiling finishes and false ceilings (internal and external) (per CFA):

Ceiling finish A a% of ceiling area / CFA @ $/m2
Ceiling finish B b% of ceiling area / CFA @ $/m2
Ceiling finish C c% of ceiling area / CFA @ $/m2
  • a%+b%+c% = an estimated percentage of the ceiling area / CFA after deducting voids, and wall and column areas, but adding beam sides, i.e. more than 100% of CFA.

Services and equipment

  1. The costs of services and equipment are generally estimated based on $/CFA for each sub-system.
  2. If part of the building is not served by a sub-system, the CFA used may be only the area served.
  3. In the case of toilets and kitchens, the estimate may be based on the number of toilets and kitchens.
  4. For a more detailed cost analysis or cost estimate, the costs can be broken down into the following portions:
    • Costs related to main equipment (chillers, cooling towers, air handling units, transformers, boilers, etc.)
    • Costs related to terminal service outlets (air grilles, diffusers, lighting points, power points, sprinklers, speakers, cameras, sanitary fittings, etc.)
    • Costs related vertical up-feed and down-feed
    • Costs related to horizontal distribution
    • Costs related to isolated locations (e.g. toilets, kitchens, plant rooms, etc.).

Movement systems

  1. While using the CFA as the elemental quantity for movement systems cannot be treated as wrong particularly when the CFA is big and there are many lifts and escalators, the cost should better be estimated based on cost per number of lift or escalator.

Elemental quantities based on % of other costs

  1. It would be more appropriate to use % of other costs (base costs) as the elemental quantities to allow for preliminaries and risk allowances as the base costs may change when the CFAs remain the same.

Steel ratios

  1. The steel ratios of structural walls and columns should be bigger than those for beams and slabs.

Unit cost / CFA of taller buildings

  1. The $/CFA of foundations, substructure and structure should be higher for taller buildings because of increased loading on the lower floors and increased wind load.
  2. The $/CFA of services and equipment should be higher for taller buildings because of longer running lengths of vertical pipes and cables, and increased lift speeds and capacities.
  3. Refuge floor would need to be added.
  4. Taller buildings take longer times to complete, causing higher unit rates and higher preliminaries costs. While it is usual to use the same % for preliminaries for different projects, when carrying out comparative cost studies for buildings with very different construction periods, the % should reflect the differences. Instead of adjusting all the unit rates, it may as well be simpler to adjust only the preliminaries to also cover the higher unit rates.

Composite rates for approximate quantities ​​​組合單價的測算

Composite items

  1. The approximate quantity method measures major work items as composite items so as to reduce the need and time to break down the work items into components for detailed measurement.
  2. Examples are:
    • lump sum allowances for mobilisation and demobilisation of major construction plant
    • m or No. piles of specific cross-sectional size
    • m3 excavation including disposal (backfill or remove from site)
    • m2 or m concrete members including formwork and reinforcement
    • m2 brick or block work including lintols
    • m2 cladding or curtain walls or window walls or windows including glazing
    • m or No. extra over m2 or m for special features
    • No. doors including frames, architraves, fixings, glazing, painting, fire rating, etc.
    • No. of major metal or joinery fittings
    • m2 roof finishes including surface layer, protective screed, waterproofing layer, levelling screed, insulation, etc.
    • m2 rendering including surface treatment
    • m2 plastering including painting
    • m2 tiling including screeding
    • No. of vertical stacks of water supply or disposal pipes including all pipe fittings and ancillaries
    • No. of kitchens or bath rooms or other serviced rooms including all sanitary fittings and branches
    • No. of sanitary fittings including all accessories
    • No. of terminal M&E fittings including conduits or wiring or cables
    • No. of main M&E equipment
    • m conduits or wiring or cables
    • m2 ducts
    • lump sum allowances for sundries
    • lump sum for or No. of costly tests
  3. Different sizes or types may be separated or grouped together depending on their cost significance.
  4. Average sizes may be stated or varying sizes deemed.

Composite rates

  1. Building up of composite rates would be required for such composite items.
  2. Buffers should be allowed in the approximate quantities and composite rates to cover the costs of unmeasured minor items.

Using BIM

  • When preliminary BIM models are used to generate quantities for preparing cost estimates, the quantities would not reflect the work items not modelled. Extra allowances in the approximate quantities or the composite rates should be made to cover the costs of unmodelled but necessary items.

Build-up of composite rates using properly set out dimension tables

  1. The following gives examples of composite items and build-ups of composite rates.​​​​​​​
  2. Example 1:
    • ​​​​​Note that in Hong Kong, beam concrete and formwork are measured those parts below slab soffit. Beam reinforcement includes those at the intersection of slab and beam.
  3. Example 2:
    • ​​​​​​​​​
    • Note that a typical bay of 6 x 6 m is measured to average out the beam quantities.
    • Note also that the four beams around each typical bay are shared with adjacent slabs, and their quantities are therefore halved.
  4. Example 3:
    • ​​​​​​​
  5. Example 4:

(first image added, 18/2/2023)

Handling empty cells instead of entering “1”

  1. Note that 36.00 at cell I46 uses the formula: "=PRODUCT(C48:H48)" which can treat empty cells within the range of C48:H48 as 1 without the need for entering 1.
  2. However, if the individual cell values within the range of C48:H48 contain more than 2 decimal places, the PRODUCT() function using the hidden values will not give the same result as the displayed value. To ensure proper match, a formula based on the displayed values should be used. Such accuracy would be required for Bills of Quantities and Final Account and should not be needed for Cost Estimates.

(added, 5/3/2023)

Using dash lines to bound ranges

  • Note that 65,917 at cell L46 uses the formula "=SUM(L47:L54)" which covers the range from the upper dash line to the lower dash line. Those dash lines embrace the rows of constituent items between them and ensure that the formula will not be corrupted due to addition or deletion of rows.

(added, 5/3/2023)

Round unit rates to 2 significant digits

  1. Note that 1,900 = 65,917/36.00 = 1,831.03 has been rounded up to two significant digits as 1,900.
  2. The formula used is "=IF(INT(L46/I46)>0,ROUNDUP(L46/I46,2-LEN(INT(L46/I46))),ROUNDUP(L46/I46,2))".
  3. L46/I46 is the quotient. Let's call it "Q".
  4. The formula will become "=IF(INT(Q)>0,ROUNDUP(Q,2-LEN(INT(Q))),ROUNDUP(Q,2))".
  5. It can be read as: if integer of Q > 0, then round it to 2 significant digits, else round up Q to 2 decimal places).
  6. INT(Q) = 1831.03, it is > 0.
  7. 2 - LEN(INT(Q)) = 2 - 4 = -2.
  8. ROUNDUP(1831.03, -2) = 1900.
  9. If Q = 0.1234, then ROUNDUP(Q, 2) = 0.13.
  10. The unit rates used in Cost Estimates are approximate rates.
  11. It would not make sense to show them in many digits and with decimal places to make them look like very accurate.
  12. 2 significant digits should be sufficient.
  13. Estimates should include buffers.
  14. Rounding up is appropriate.

(added, 5//3/2023)

Build-up of composite rates using compact format for showing in the Cost Estimate

  1. The following shows another method to present the composite rate calculations in the Cost Estimate.
  2. Example 5:
    • Note that the reinforcement refers to the concrete quantities already calculated at cells E15 and E23 above.
  3. Example 6:
    • Note that the function FORMULATEXT() is used to display the formula of the quantity of 0.48 above for checking. The cell entry must be preceded with "=" for it to be recognised as a formula.
    • Using this function will eliminate the need to type the formula separately as an explanation in addition to entering the formula in the calculation cell and risking mismatch errors.
    • The formula column can be hidden or deleted when issuing the Cost Estimate.
    • Note also that the estimated costs have been rounded to the nearest 10,000, using the formula "=ROUND(Rate*Qty, -4)".
    • This would give the image that the figure is an approximate estimate rather than an accurate figure.
  4. Example 7:
  5. Example 8:
  6. Example 9:
    • ​​​​​​​​​​​​​​
  7. Example 10:

Prepare cash flow tables 編製現金流量表

Use S-curve 用S線圖

​​​​​​​​​​​​​​​​​​​​​

  1. ​​​​​​​​​​​​​​Divide the horizontal axis into parts equal to the number of months of construction.
    ​​​​​​​將水平軸按施工的月份數目分段
  2. For each month, interpolate from the curve the cumulative payment percentage on the vertical axis.
    利用曲線找出每個月在垂直軸相對的累計進度百份率
  3. Find the monthly payment percentages from the cumulative percentages.
    用累計進度百份率計出每月進度百份率
  4. Apply the monthly payment percentages to the total cost to obtain the monthly payment values.
    每月進度百份率乘總造價得出每月進度款。

Use Bar Chart Programmes 用條形進度計畫表

  1. Follow the bar chart programme, assign the monthly payment percentages for each activity bar.
    跟從條形進度計企劃表,對每條活動配以每月進度百份率
  2. Apply the monthly payment percentages to the total cost of each activity bar to obtain the monthly payment values.
    將每月進度百份率乘該條活動的造價得出每月進度款
  3. Ensure that the total of each activity bar is correct.
    確保每條活動的合計無誤。

For both methods

  1. Separate stage payments.
    要把分期付款及大型採購分列
  2. Separate Retention.
    要把保修金分列
  3. Watch out time lag between work carried out, payment certification and honouring of payment.
    注意施工、批款及付款的時間差。
  4. Payment terms:

    • Usual payment terms for construction contracts in Hong Kong:
      • no advance payment;
      • monthly payments for materials delivered to site and work done subject to 10% retention on the gross total up to a maximum equal to 5% of the original Contract Sum;
      • half of the retention to be released upon Practical Completion / Substantial Completion (*); and
      • the balance to be released upon the issue of the Defects Rectification Certificate / Certificate of Completion of Making Good Defects / Maintenance Certificate (*) after rectification of defects found during the Defects Liability Period / Maintenance Period (*) usually of 12 months.
      • (*) = Different terms used by different standard forms of contract.
    • Possible payment terms for lift and escalator contracts / sub-contracts:
      • 10% upon award;
      • 20% when ready for shipment;
      • 30% on delivery to site;
      • 25% on issue of Use Permit by the EMSD;
      • 10% on Practical Completion / Substantial Completion; and
      • balance upon the issue of the Defects Rectification Certificate (as above).
    • Suppliers:
      • Usually require deposits or advance payments which can be moderately up to 30% or sometimes up to 50%.
    • Lower tiers sub-contractors:
      • Require shorter payment periods and no retention.

Reconciliation 概算變化的解釋

  1. Presented vertically:
    垂直列出:
  2. Presented side by side:
    並排表示:
    ​​​​​​​​​​​​​​
  3. A legend of “(a)”, “(b)”, “(c)”, etc. can be used for stating common reasons, similar to the legends suggested for “comparison tables” under “Presentation of Cost Estimates” above.

Pre-tender Estimates ​​​​​​​標底

  1. Method:
    • By pricing the Bills of Quantities before formal issue of tender documents or before return of tenders.
      在發出招標檔前或在回標前利用工程量清單套取單價計價。
  2. Purposes:
    • For checking whether the cost so priced is within the previous estimate and the Budget
      以檢查得出的總價是否仍在前概算或投資預算之內
    • For making design changes and issuing tender addendum to keep the costs within the Budget
      作出設計修改並發出招標檔變更通知以便維持造價在投資預算之內
    • For checking against tenders returned for reasonableness
      用作評核回標價的合理性。

End of Page

International Cost Management Standard

International Cost Management Standard KCTang

Go to End

Note

  • 15/3/2022: Expanded.
  • 7/3/2022: Split from Pre-Contract Cost Planning and Control.

Intro

  1. International Cost Management Standard (ICMS) (https://icms-coalition.org/the-standard/), formally called "International Construction Measurement Standards", is intended to provide global consistency in presenting construction life cycle costs and carbon emissions.

Aims

  1. Provide global consistency in classifying, defining, measuring, recording, analysing and presenting entire construction life cycle costs and carbon emissions at a project, regional, state, national or international level.
  2. Allow costs and carbon emissions to be managed and potentially reduced.
  3. Allow:
    • construction life cycle costs and carbon emissions to be consistently and transparently benchmarked (comparative benchmarking)
    • the causes of differences in life cycle costs and carbon emissions between projects to be identified (option appraisal)
    • properly informed decisions on the design and location of construction projects to be made at the best value for money (investment decision-making) and
    • data to be used with confidence for construction project financing and investment, decision-making, and related purposes (certainty).

Characteristics

  1. Global: co-existing with the locals.
  2. High level.
  3. For the first time, building works, civil engineering works and carbon emissions are now also covered by the same classification at the high level.
  4. Same for costs and carbon emissions.

Timeline

  1. 17 June 2015: Formation of ICMS Coalition – a non-governmental, not-for-profit professional coalition.
  2. November 2015: Standards Setting Committee starting to work.
  3. July 2017: Release of the 1st Edition covering capital construction costs of building and civil engineering works,
  4. August 2019: Release of the 2nd Edition extended to cover other life cycle costs and more civil engineering project types at the PAQS Congress in Malaysia.
  5. November 2021: Release of the 3rd Edition extended to cover carbon emissions and more civil engineering project types. Change of names to International Cost Management Standard and Standard Setting Committee.

Evolution of cost classification

 

  1. "elements" in the traditional QS sense was called "Cost Groups" and "Cost Sub-Groups" in ICMS 1 and 2.
  2. With the addition of carbon emissions in ICMS 3, it is now called "Groups" and "Sub-Groups" to make them common for costs and carbon emissions.

Hierarchical framework

  1. Simple
    • This framework is simpler than that commonly used in Hong Kong, which is for building works only.
  2. Shared groups
    • Construction, Renewal and Maintenance all share the same Groups.
  3. Composite and prefabricated work
    • It is covered.
  4. Development budget
    • For new developments, the total of the Acquisition Costs and Construction Costs represents the capital cost of development or development budgetary cost.

Codes

  1. Code: 01.2.03.030
    • Meaning: Buildings: Construction: Structure: Frames and slabs (above top of ground floor slabs).
Level 1 Project Type 01. Buildings
Level 2 Category 2. Construction
Level 3 Group 03. Structure
Level 4 Sub-Group 030 Frame and Slabs

Relationship between ICMS, LCC and WLC

  1. ‘Occupancy Costs’ are considered part of the ‘Non-Construction Costs’.
  2. Compatible with ISO 15686-5:2017 Buildings and constructed assets – Service life planning – Part 5: Life-cycle costing.

Carbon reporting framework

  1. The reporting structures for costs and carbon emissions are identical.

Groups and Sub-Groups

Acquisition Groups and Sub-Groups

  1. Carbon emissions are reported for Acquisition only if they are significant.

  2. 2-digit code for Groups and 3-digit code for Sub-Groups.

Code Description
    Group (Level 3)
    Sub-Group (Level 4)
 
1.   Acquisition Costs (AC) | Acquisition Carbon Emissions (AE) (each Sub-Group includes Risk Allowances
  01. Site acquisition
  01.010 Costs and premium required to procure site
  01.020 Compensation to existing occupiers
  01.030 Demolition, removal and modification of existing properties by way of payment to existing owners instead of carrying out physical work
  01.040 Contributions for the preservation of heritage, culture and environment
  01.050 Related fees to agents, lawyers, and the like
  01.060 Related taxes and statutory charges
  02. Administrative, finance, legal and marketing expenses
  02.010 Client’s general office overheads
  02.020 Client’s project-specific administrative expenses:
•    in-house project management and design team
•    supporting project staff
•    project office venue, furniture and equipment if not included in Constructor’s preliminaries | site overheads
•    stores and workshops
•    safety and insurances
•    staff training
•    accommodation and travelling expenses for in-house team and external parties
  02.030 Interest and finance costs
  02.040 Legal expenses
  02.050 Accounting expenses
  02.060 Sales, leasing, marketing, advertising and promotional expenses
  02.070 Taxes and statutory charges related to sales and lease
  02.080 License and permit charges for operation and use

Construction | Renewal | Maintenance Groups and Sub-Groups: Buildings

  1. Carbon emissions are reported at the Sub-Group level by exception.

  2. 2-digit code for Groups and 3-digit code for Sub-Groups.

Code Description
    Group (Level 3)
    Sub-Group (Level 4)
 
2.   Construction Costs (CC) | Construction Carbon Emissions (CE)
3.   Renewal Costs (RC) | Renewal Carbon Emissions (RE)
5.   Maintenance Costs (MC) | Maintenance Carbon Emissions (ME
    (CC | CE, RC | RE, and MC | ME share the same Groups below, so far as applicable. Those separated by ‘ | ’ in [ ] are respective alternative terms.)
  01. Demolition, site preparation and formation
  01.010 Site survey and ground investigation
  01.020 Environmental treatment
  01.030 Sampling of hazardous or useful materials or conditions
  01.040 Temporary fencing
  01.050 Demolition of existing buildings and support to adjacent structures
  01.060 Site surface clearance (clearing, grubbing, topsoil stripping, tree felling, minor earthwork, removal)
  01.070 Tree transplant
  01.080 Site formation and slope treatment
  01.090 Temporary surface drainage and dewatering
  01.100 Temporary protection, diversion and relocation of public utilities
  01.110 Erosion control
  02. Substructure
  02.010 Foundation piling and underpinning:
•    mobilisation and demobilisation
•    trial piles and caisson
•    permanent piles and caisson
•    pile and caisson testing
•    underpinning
  02.020 Foundations up to top of lowest floor slabs:
•    excavation and disposal
•    lateral supports
•    raft footings, pile caps, column bases, wall footings, strap beams, tie beams
•    substructure walls and columns
•    lowest floor slabs and beams (excluding and beyond basement bottom slabs)
•    lift pits
•    composite or prefabricated work
  02.030 Basement sides and bottom:
•    excavation and disposal
•    lateral supports
•    bottom slabs and blinding
•    sides
•    vertical waterproof tanking, drainage blanket, drains and skin wall
•    horizontal waterproof tanking, drainage blanket, drains and topping slab
•    insulation
•    lift pits, sump pits, sleeves
•    composite or prefabricated work
  03. Structure
  03.010 Structural removal and alterations
  03.020 Basement suspended floors (up to top of ground floor slabs):
•    structural walls and columns
•    beams and slabs
•    staircases
  03.030 Frames and slabs (above top of ground floor slabs):
•    structural walls and columns
•    upper floor beams and slabs
•    roof beams and slabs
•    staircases
•    fireproofing to steel structure
  03.040 Tanks, pools, sundries
  03.050 Composite or prefabricated work
  04. Architectural works | Non-structural works
  04.010 Non-structural removal and alterations
  04.020 External elevations:
•    non-structural external walls and features
•    external wall finishes except cladding
•    facade cladding and curtain walls
•    external windows
•    external doors
•    external shop fronts
•    roller shutters and fire shutters
  04.030 Roof finishes, skylights and landscaping (including waterproofing and insulation):
•    roof finishes
•    skylights
•    other roof features
•    roof landscaping (hard and soft)
  04.040 Internal divisions:
•    non-structural internal walls and partitions
•    shop fronts
•    toilet cubicles
•    moveable partitions
•    cold rooms
•    internal doors
•    internal windows
•    roller shutters and fire shutters
•    sundry concrete work
  04.050 Fittings and sundries:
•    balustrades, railings and handrails
•    staircases and catwalk not forming part of the structure, cat ladders
•    cabinets, cupboards, shelves, counters, benches, notice boards, blackboards
•    exit signs, directory signs
•    window and door dressings
•    decorative features
•    interior landscaping
•    access panels, fire service cabinets
•    sundries
  04.060 Finishes under cover:
•    floor finishes (internal and external)
•    internal wall finishes and cladding
•    ceiling finishes and false ceilings (internal or external)
  04.070 Builder’s work in connection with services:
•    plinth, bases
•    fire-proofing enclosure
•    hoisting beams, lift pit separation screens, lift shaft separator beams
•    suspended manholes
•    cable trenches, trench covers
•    sleeves, openings and the like not allowed for in ‘Fittings and sundries’
  04.080 Composite or prefabricated work
  05. Services and equipment
  05.010 Heating, ventilating and air-conditioning systems/air conditioners:
•    seawater system
•    cooling water system
•    chilled water system
•    heating water system
•    steam and condensate system
•    fuel oil system
•    water treatment
•    air handling and distribution system
•    condensate drain system
•    unitary air-conditioning system
•    mechanical ventilation system
•    kitchen ventilation system
•    fume and smoke extraction system
•    anaesthetic gas-extraction system
•    window and split-type air conditioners
•    air-curtains
•    fans
•    related electrical and control systems
•    submissions, testing and commissioning
  05.020 Electrical services:
•    high-voltage transformers and switchboards
•    incoming mains, low-voltage transformers and switchboards
•    mains and submains
•    standby system
•    lighting and power
•    uninterruptible power supply
•    electric underfloor heating
•    local electrical heating units
•    earthing/lightning protection and bonding
•    submissions, testing and commissioning
  05.030 Fitting out lighting fittings
  05.040 Extra low voltage electrical services:
•    information and communications technology system
•    staff paging/location
•    public address system
•    building automation
•    security and alarm
•    close circuit television
•    communal aerial broadcast distribution and the like
•    submissions, testing and commissioning
  05.050 Water supply and drainage above ground or inside basement:
•    cold water supply
•    hot water supply
•    flushing water supply
•    grey water supply
•    cleansing water supply
•    irrigation water supply
•    rainwater disposal
•    soil and waste disposal
•    planter drainage disposal
•    kitchen drainage disposal
•    related electrical and control systems
•    submissions, testing and commissioning
  05.060 Supply of sanitary fittings and fixtures (installation included in ‘Water supply and above ground drainage’ unless not separable from costs of ‘Fittings and sundries’)
  05.070 Disposal systems:
•    refuse
•    laboratory waste
•    industrial waste
•    incinerator
•    submissions, testing and commissioning
  05.080 Fire services:
•    fire hydrant and hose reel system
•    wet risers
•    sprinkler system
•    deluge system
•    gaseous extinguishing system
•    foam extinguishing system
•    audio/visual advisory system
•    automatic fire alarm and detection system
•    portable hand-operated appliances and sundries
•    related electrical and control systems
•    submissions, testing and commissioning
  05.090 Gas services:
•    coal gas
•    natural gas
•    liquid petroleum gas
•    medical gas/laboratory gas
•    industrial gas/compressed air/instrument air
•    vacuum
•    steam
•    submissions, testing and commissioning
  05.100 Movement systems:
•    lifts | elevators
•    platform lifts
•    escalators
•    travellators | moving walkways
•    conveyors
•    submissions, testing and commissioning
  05.110 Gondolas
  05.120 Turntables
  05.130 Generators
  05.140 Energy-saving features
  05.150 Water and wastewater treatment equipment
  05.160 Fountains, pools and filtration plant
  05.170 Powered building signage
  05.175 Audio/visual entertainment system
  05.180 Kitchen equipment
  05.190 Cold room equipment
  05.200 Laboratory equipment
  05.210 Medical equipment
  05.220 Hotel equipment
  05.230 Car park or entrances access control
  05.240 Domestic appliances
  05.250 Other specialist services
  05.260 Builder’s profit and attendance on services
  06. Surface and underground drainage
  06.010 Surface water drainage
  06.020 Storm water drainage
  06.030 Foul and wastewater drainage
  06.040 Drainage disconnections and connections
  06.050 CCTV inspection of existing or new drains
  06.060 Buried Process Pipe
  07. External and ancillary works
  07.010 Permanent retaining structures
  07.020 Site enclosures and divisions
  07.030 Ancillary structures
  07.040 Roads and paving
  07.050 Landscaping (hard and soft)
  07.060 Fittings and equipment
  07.070 External services:
•    water supply
•    gas supply
•    power supply
•    communications supply
•    external lighting
•    utility disconnections and connections
  08. Preliminaries | Constructors’ site overheads | general requirements
  08.010 Construction management including site management staff and support labour
  08.020 Temporary access roads and storage areas, traffic management and diversion (at the Constructors’ discretion)
  08.030 Temporary site fencing and securities
  08.040 Commonly shared construction plant
  08.050 Commonly shared scaffolding
  08.060 Other temporary facilities and services
  08.070 Technology and communications: telephone, broadband, hardware, software
  08.080 Constructor’s submissions, reports and as-built documentation
  08.090 Quality monitoring, recording and inspections
  08.100 Safety, health and environmental management
  08.110 Insurances, bonds, guarantees and warranties
  08.120 Constructor’s statutory fees and charges
  08.130 Testing and commissioning
  08.140 Extras for extreme climatic or working conditions (if priced separately according to local pricing practice)
  09. Risk Allowances
  09.010 Design development allowance
  09.020 Construction contingencies
  09.030 Price Level Adjustments:
•    until tendering
•    during construction
  09.040 Exchange rate fluctuation adjustments
  10. Taxes and Levies
  10.010 Paid by the Constructor
  10.020 Paid by the Client in relation to the construction contract payments
  11. Work and utilities off-site (including related risk allowances, taxes and levies)
  11.010 Connections to, diversion of and capacity enhancement of public utility mains or sources off-site up to mains connections on-site:
•    electricity
•    transformers
•    water
•    sewer
•    gas
•    telecommunications
  11.020 Public access roads and footpaths
  12. Production and loose furniture, fittings and equipment (including related risk allowances, taxes and levies)
  12.010 Loose production, process and operating furniture, fittings and equipment not normally provided before completion of construction
  12.020 Fixed production, process and operating furniture, fittings and equipment installed before completion of construction
•    production (including process and operating) equipment (including furniture and fittings)
•    related instrument and control systems
•    related safety and environmental control systems
•    related storage and transfer systems
•    services and equipment as described in Group 05 but dedicated to serve production equipment
•    surface and underground drainage as described in Group 06 but dedicated to serve production equipment
•    testing and commissioning
•    licences and certifications to start production
•    risks allowances
•    taxes and levies
  13. Construction-related consultants and supervision (including related risk allowances, taxes and levies)
  13.010 Consultants’ fees and reimbursable:
•    architects (architectural, landscape, interior design, technical, etc.)
•    engineers (geotechnical, civil, structural, mechanical, electrical and plumbing, technical, etc.)
•    project managers
•    surveyors (quantity surveying, land surveying, building surveying, cost engineering, etc.)
•    specialist consultants (environmental, traffic, acoustic, facade, BIM, etc.)
•    value management studies
  13.020 Charges and levies payable to statutory bodies or their appointed agencies (in connection with planning, design, tender and contract approvals, supervision and acceptance inspections)
  13.030 Site supervision charges (including their accommodation and travels)
  13.040 Payments to testing authorities or laboratories

Construction | Renewal | Maintenance Groups and Sub-Groups - Civil Engineering Works

  1. Carbon emissions are reported by exception at the Sub-Group level.

  2. 2-digit code for Groups and 3-digit code for Sub-Groups.

Code Description
    Group (Level 3)
    Sub-Group (Level 4)
2.   Construction (CC | CE)
3.   Renewal (RC | RE)
5.   Maintenance (MC | ME)
    (CC | CE, RC | RE, and MC | ME share the same Groups below, so far as applicable. Those separated by ‘|’ in [ ] are alternative terms for respective Groups)
  01. Demolition, site preparation and formation
  01.010 Site survey and ground investigation
  01.020 Environmental treatment
  01.030 Sampling of hazardous or useful materials or conditions
  01.040 Temporary fencing
  01.050 Demolition of existing structures and support to adjacent structures
  01.060 Site surface clearance (clearing, grubbing, topsoil stripping, tree felling, minor earthwork, removal)
  01.070 Tree transplant
  01.080 General site formation and slope treatment (including embankments / cuttings required by more than one Sub-Project)
  01.090 Temporary surface drainage and dewatering
  01.100 Temporary access roads and storage areas (provided under an advance contract)
  01.110 Temporary protection, diversion and relocation of public utilities
  01.120 Erosion control
  01.600 Water surface development (including common facilities and services, and dredge spoil recovery area)
  01.610 Dredge spoil recovery area
  01.620 Hydrographic / bathymetry surveys
  01.630 Water quality monitoring
  01.640 Excavation (of soft silt, peat, sands, gravels, clay, rock, etc., including mobilisation and demobilisation of excavators, blasting, transportation, disposal, reclamation, compaction and monitoring)
  01.650 Dredging (of soft silt, peat, sands, gravels, clay, rock, etc., including mobilisation and demobilisation of dredgers and barges, blasting, transportation, disposal, reclamation, compaction and monitoring)
  01.660 Special disposal and treatment of contaminated sediment
  01.670 Reclamation or filling (with imported rock, concrete, or other hard materials)
  01.680 Reclamation or filling (with dredged materials)
  01.690 Surcharging or consolidation of lands and monitoring of settlement
  01.700 Habitat protection systems
  02. Substructure
  02.010 Embankments / cuttings (specifically required for the Project or Sub-Project)
  02.020 Excavation, disposal and lateral supports (specifically to receive any substructure construction but excluding general site formation and slope treatment)
  02.025 Geotextile or other geomembranes
  02.030 Trenching / common trenches
  02.040 Drilling / boring
  02.050 Piling / anchoring
  02.060 Structural backfill / ground remediation
  02.070 Earth-retaining structures
  02.080 Abutments / wing walls
  02.090 Pile caps / footings / bases (nearest to the ground level or water level if constructed in water)
  02.100 Sub-base to pavements and rail track structures
  02.110 Bases to supports for tanks, pipes, well heads and the like
  02.120 Beds and surrounds to underground pipes
  02.600 Pile retaining walls (combi walls / H-pile walls / secant piled walls
•    sheet piled walls
•    gravity quay walls
•    relieving platforms
•    pile supported structures
•    special types
  02.610 Diaphragm walls
  02.620 Quays / docks / wharfs / moorings / piers /dry dock structure foundations
  02.630 Marine anchor systems
  02.640 Mooring dolphins
  02.650 Breakwaters
•    cores
•    primary armour (interlocking units)
•    secondary armour
  02.660 Rock revetments / gabions
  02.670 Cofferdams
  02.680 Bank protection
  03. Structure
  03.010 Piers and towers
  03.020 Suspension system
  03.030 Decks
  03.040 Bearings
  03.050 Tunnel lining
  03.060 Roads / track bases
  03.070 Pavements
  03.080 Service roads and approaches
  03.090 Parapets / edge treatment
  03.100 Main structures (in case of land formation and reclamation, referring to those of project types not separately reported as Sub-Projects)
  03.105 Service stations and houses for district utility services
  03.110 Tanks, rigs, storage containers and the like
  03.120 Supports for tanks, pipes and the like
  03.130 Civil pipework
  03.140 Valves and fittings
  03.600 Seawalls
  03.610 Lake and river lining
  03.620 Prefabricated marine structures – off-site fabrication
  03.630 Prefabricated marine structures – transport to site location
  03.640 Prefabricated marine structures – installation on site location
  03.650 Slipways / gangways / linkways
  03.660 Dock and lock gates
  03.670 Pontoons
  03.680 Coastal protection systems
  03.690 Deck / surface structures (ground bearing or suspended concrete slabs)
  03.700 Locks and guidance structures
  03.710 Revetments
  03.720 Flood defences
  03.730 Navigational aids
  03.740 Dry docks structures
  03.750 Weirs
  03.760 Aqueducts
  04. Non-structural works
  04.010 Non-structural removal and alterations
  04.020 Non-structural construction
  04.030 Running surface
  04.040 Signage, markings and the like
  04.050 Gantries and the like
  04.060 Safety facilities
  04.070 Barriers / rails and means of access
  04.080 Special equipment and fittings
  04.090 Interior landscaping
  04.100 Builders’ work in connection with services
  05. Services and equipment
  05.005 District heating, ventilating and cooling systems
  05.010 Mechanical systems
  05.020 Lighting systems
  05.030 Illuminations
  05.040 Low-voltage power supply
  05.050 Cables/cable trays
  05.060 Other electrical services
  05.070 Control systems and instrumentation
•    signalling systems
•    telecommunications systems
  05.080 Pipe racks / supports (localised)
  05.090 Water supply and drainage above ground or inside underground construction (localised)
  05.100 Refuse and waste disposal systems
  05.110 Fire services
  05.115 Gas services
  05.120 Movement systems: lifts / elevators / conveyors
  05.600 Boat lifts
  05.610 Cranes / rigs/ rails
  05.620 Under water / sea service pipe installation
  05.630 Under water / sea electrical / data cabling
  06. Surface and underground drainage
  06.010 Surface water drainage
  06.020 Storm water drainage
  06.030 Foul and waste water drainage
  06.040 Pumping systems
  06.050 Drainage connections
  07. External and ancillary works
  07.010 Site enclosures and divisions
  07.020 Ancillary structures
  07.030 Roads and paving (not amounting to a Sub-Project)
  07.040 Landscaping (hard and soft)
  07.050 Fittings and equipment
  08. Preliminaries | Constructors’ site overheads | general requirements
  08.010 Construction management including site management staff and support labour
  08.020 Temporary access roads and storage areas, traffic management and diversion (at the Constructors’ discretion)
  08.025 Temporary concrete batching yard, precast concrete casting yard
  08.030 Temporary site fencing and securities
  08.040 Commonly shared construction plant
  08.045 Marine plant and equipment (e.g. ships / barges / vessels, floating cranes, dredgers, floating drill rigs, cofferdams, caissons, etc.)
  08.050 Commonly shared scaffolding
  08.055 Workpeople living accommodation
  08.060 Other temporary facilities and services
  08.065 Mobilisation and demobilisation where significant and not elsewhere reported
  08.070 Technology and communications: telephone, broadband, hardware, software
  08.080 Constructor’s submissions, reports and as-built documentation
  08.090 Quality monitoring, recording and inspections
  08.100 Safety, health and environmental management
  08.110 Insurances, bonds, guarantees and warranties
  08.120 Constructor’s statutory fees and charges
  08.130 Testing and commissioning
  08.140 Extras for extreme climatic or working conditions (if priced separately according to local pricing practice)
  09. Risk Allowances
  09.010 Design development allowance
  09.020 Construction contingencies
  09.030 Price level adjustments
•    until tendering
•    during construction
  09.040 Exchange rate fluctuation adjustments
  010. Taxes and Levies
  010.010 Paid by the Constructors
  010.020 Paid by the Client in relation to the construction contract payments
  11. Work and utilities off-site (including related risk allowances, taxes and levies)
  11.010 Connections to, diversion of and capacity enhancement of public utility mains or sources off-site up to mains connections on-site:
•    electricity
•    transformers
•    water
•    sewer
•    gas
•    telecommunications
  11.020 Public access roads and footpaths
  12. Production and loose furniture, fittings and equipment (including related risk allowances, taxes and levies)
  12.010 Loose production, process and operating furniture, fittings and equipment not normally provided before completion of construction
  12.020 Fixed production, process and operating furniture, fittings and equipment installed before completion of construction
  13. Construction-related consultants and supervision (including related risk allowances, taxes and levies)
  13.010 Consultants’ fees and reimbursable:
•    architects (architectural, landscape, interior design, technical, etc.)
•    engineers (geotechnical, civil, structural, mechanical, electrical and plumbing, technical, etc.)
•    project managers
•    surveyors (quantity surveying, land surveying, building surveying, cost engineering, etc.)
•    specialist consultants (environmental, traffic, acoustic, facade, BIM, etc.)
•    value management studies
  13.020 Charges and levies payable to statutory bodies or their appointed agencies (in connection with planning, design, tender and contract approvals, supervision and acceptance inspections)
  13.030 Site supervision charges (including their accommodation and travels)
  13.040 Payments to testing authorities or laboratories

Operation Groups and Sub-Groups

  1. Carbon emissions are reported by exception at the Sub-Group level.
  2. 2-digit code for Groups and 3-digit code for Sub-Groups.
Code Description
    Group (Level 3)
    Sub-Group (Level 4)
4.   Operation Costs (OC) | Operation Carbon Emissions (OE)
  01. Cleaning
  01.010 External cleaning (routine and periodic)
  01.020 Internal cleaning (routine and periodic)
  01.030 Specialist cleaning (define type)
  02. Utilities
  02.010 Fuel (state type: gas / electricity / oil and other fuel sources)
  02.020 Water, drainage and sewerage
  03. Waste management
  03.010 Waste collection and disposal
  03.020 Recycling and savage
  04. Security
  04.010 Physical security
  04.020 Remote monitoring
  05. Information and communications technology
  05.010 Communication systems
  05.020 Specialist technology / sensors
  06. Operators’ site overheads | general requirements
  06.010 Administration
  06.020 Property insurance
  07. Risk Allowances
  07.010 Operation related (user definable)
  07.020 Contractual obligations
  08. Taxes and Levies
  08.010 Taxes
  08.020 Levies

End of Life Groups and Sub-Groups

  1. Carbon emissions are reported by exception at the Sub-Group level.
  2. 2-digit code for Groups and 3-digit code for Sub-Groups.
Code Description
    Group (Level 3)
    Sub-Group (Level 4)
6 6. End of Life Costs (EC) | End of Life Carbon Emissions (EE)
  01. Disposal inspection
  01.010 Dilapidations report
  01.020 Contractual hand-back obligations
  02. Decommissioning and decontamination
  02.010 Shutdowns and decommissioning
  02.020 Decontamination
  03. Demolition, reclamation and salvage
  03.010 Demolition
  03.020 Reclamation
  03.030 Salvage
  04. Reinstatement
  04.010 Agreed reinstatement works
  04.020 Contractual obligations
  05. Constructors’ site overheads | general requirements
  05.010 Administration
  05.020 Overheads (project specific)
  06. Risk Allowances
  06.010 End of life specific (user definable)
  06.020 Abnormal risks (user definable)
  07. Taxes and Levies
  07.010 Taxes
  07.020 Levies
  07.030 Credit for grants

Rationale for some classifications

Composite or prefabricated work

  1. There are items for ‘composite or prefabricated work’, but in principle their costs and/or carbon emissions are to be split into the relevant Groups and Sub-Groups as much as possible to facilitate analysis and comparison with non-composite or prefabricated work.
  2. Include in the ‘composite or prefabricated work’ only if the composite or prefabricated work integrates different construction components across different Groups and Sub-Groups serving the functions of more than one Sub-Group and is priced without further breakdown in the contract.

Substructure and Structure Delineation

  1. “Superstructure” is not used.
  2. The “Substructure” and “Structure” delineation for various project type is shown in the diagrams below.
  3. Why are they delineated into “Substructure” and “Structure”, not “Substructure” and “Superstructure”?
  4. Usually, substructure refers to the structure below the ground surface and superstructure refers to the structure above ground.
  5. However, as shown in the diagrams, many of the main structures for civil engineering works (such as roads, tunnels, tanks, pipelines, wells, boreholes, etc.) can be totally below the ground surface, if these main structures are classified as substructure, there would be nothing left to be reported for the superstructure.
  6. Therefore, ICMS classifies all the main structures as “Structure” whether or not they are underground or underwater, and classifies all structures supporting or encasing the main structures as “Substructure”.

Split of Basement for Buildings

  1. The basement sides and bottom (shown in deep blue in the diagram below) are classified as an item (code [2|3|5].02.030.030) under the Substructure Group, while the basement suspended floors (shown in red box in the diagram below) are classified as a Sub-Group (code [2|3|5].03.020) under the Structure Cost Group.
  2.  
  3. Why are the basement sides, bottom and suspended floors not grouped together as substructure or basement, like common language use? It is also usual for tender pricing to group the basement works under a section.
  4. Answers:
  5. The design of the basement sides and bottom do not vary in direct proportion to the total building floor area nor to the total basement floor area, and is highly dependent on the site conditions even for the same building design. The cost of the basement sides and bottom should therefore be reported separately from the cost of the basement suspended floors.
  6. If the basement suspended floors are reported separately from the superstructure, the “unit cost per total building floor area” of the basement suspended floors ($400/m2) and of the superstructure ($2,700/m2) as given in the high-level cost summary, as shown in the example below, would not be useful when one wants to roughly estimate how much a similar building of 12,000 m2 would cost. One would need to know the floor areas of the basement and the superstructure or their proportions, and use $4M and $27M for pro-rata calculations.
  7. While it may be easy to separate the architectural works | non-structural works into basement and superstructure, it would not be logical from the costing point of view to do a similar separation for services and equipment because it is often required to put main services and equipment serving the whole building in the basement, but allocating the costs of main services and equipment based on their locations would give a misleading unit cost per basement floor area and unit cost per superstructure floor area for further use.
  8. If the basement suspended floors and superstructure are grouped together, the unit cost per total building floor area ($3,100/m2) as shown in the example below would then be more useful for quick pro-rata calculation and comparison. Furthermore, per their respective floor areas, the design of the basement suspended floors is generally heavier than that of the superstructure, but the former is exclusive of external structural walls, while the latter is inclusive. The two aspects can have an off-setting effect such that $4,000/m2 and $3,000/m2 in the above example can be closer to each other, and grouping together would be appropriate.
  9. ICMS is for high-level cost presentation for comparative benchmarking and option appraisal, etc. The above classification should make the unit costs more readily useful for such purposes. For tender pricing, users can choose to group the basement works in their preferred ways.
  10. If one wants to show the basement and superstructure costs separately in the cost report to match the sections in tender pricing, one can adopt the following presentation:

External structural walls as structural parts vs External elevations

  1. Some cost classifications classify external structural walls as part of the “External elevations” or as “External walls” whether above or below ground. Why does ICMS 2 not so classify but classify the external structural walls as structural parts?
  2. Answers:
  3. External structural walls serve two functions, one taking structural loading of the building, and the other enclosing the building. 
  4. It is considered difficult to separate the external structural walls (reinforcement in particular) at “A” below from the rest of the core structure, and it would give an incomplete structural cost if both the external structural walls at “A” and “B” below are grouped under “External elevations”, say, when answering the question “what would be the structural cost without non-structural parts?”. 
  5. For construction, the structural parts should come first before the non-structural parts are added on. Therefore, the external structural walls are classified as structural parts under:
    • [2|3|5].02.030: Basement sides and bottom – sides
    • [2|3|5].03.030: Structure – Frames and slabs – structural walls and columns
  6. For present day buildings, the design of the external structural walls above ground and that below ground can be very different, the walls are therefore separated as above.

Fitting out lighting fittings / Supply of sanitary fittings

  1. Lighting fittings (decorative) and sanitary fittings are usually chosen by the architects instead of the building services engineers, and their costs are not usually included in the cost estimates provided by the engineers, they are therefore separately as two Sub-Groups.
  2. However, since they are more related to Services and Equipment, they are therefore included as part of “Services and Equipment”.

Builder's profit and attendance on services

  1. Services and equipment are likely the subject of nominated sub-contracts on which the builders price profit and attendance separately. This Sub-Group is intended for such profit and attendance.
  2. The costs of other works should include profit and attendance.

Project Attributes and Values

  1. To enable consistent and concise evaluation and comparison between different Projects or different design schemes, ICMS provides a set of Project Attributes and Values describing the principal characteristics of each Project or Sub-Project.
  2. The Project Attributes are given under the following groups:
Common Each Project Type
  • Report
  • Construction Cost Price Level
  • Construction Cost Currency Conversion
  • Construction Programme
  • Site
  • Construction Procurement
  • Life Cycle Cost Related
  • Carbon Emissions Related
  • Code
  • Works
  • Project Quantities
  1. Examples:

Project Quantities

  1. ICMS provides the following Project Quantities (physical or functional) such that the total costs can be expressed as unit cost per unit project quantity for comparison and benchmarking purposes.
Projects Project Quantities (Physical) Project Quantities (Functional)
Buildings
  • Site area (within legal boundary of building site, excluding temporary working areas outside the site) (m² | ft²)
  • Covered area on plan (m² | ft²)
  • Gross external floor area as IPMS 1 (EXTERNAL) (m² | ft²)
  • Gross internal floor area as IPMS 2 (INTERNAL) (m² | ft²)
  • number of occupants | number of bedrooms | number of hospital beds | number of hotel rooms | number of car parking spaces | number of classrooms | number of students | number of passengers | number of boarding gates | production capacity (specifics to be stated) | other stated
Roads and motorways
  • Total length (between two places, irrespective of number of lanes) (km | miles)
  • Equated lane length (being the length of all lanes along the route, including those in passing loops, sidings and depots reduced toa single length) (km | miles)
  • Total paved area (m² | ft²)
  • capacity (vehicles per hour)
Railways
  • Route length (between start and finish points of longest route plus start and finish points of ancillary routes irrespective of number of tracks) (km | miles)
  • Equated track length (being the length of all tracks along the route, including those in passing loops, sidings and depots reduced to a single length) (km | miles)
  • weight of traffic expressed as estimated gross million tonnes or tons per annum (M tonnes | M tons/year)
  • passenger journeys (million journeys per year)
Bridges
  • Deck length measured from face to face of abutments (km | miles)
  • Surface area of deck (m² | ft²)
  • capacity (vehicles | litres | gallons | tonnes | tons per hour)
Tunnels
  • End to end length (km | miles)
  • Equated track length (being the length of all tracks inside the tunnel) (km | miles)
  • Equated lane length (being the length of all tracks inside the tunnel) (km | miles)
  • Volume of excavation (m³ | yd³)
  • capacity (vehicles | litres | gallons | tonnes | tons per hour)
Wastewater treatment works
  • Site area (area of land covered by permanent work, excluding temporary working areas outside the site) (hectares | acres)
  • capacity (mega litres | litres | million gallons | gallons per day)
Water treatment works
  • Site area (area of land covered by permanent work, excluding temporary working areas outside the site) (hectares | acres)
  • capacity (mega litres | litres | million gallons | gallons per day)
Pipelines
  • Total length of pipes (km | miles)
  • Length from servicing inlets to outlets (km | miles)
  • capacity (litres | gallons | m³ | ft³ per hour)
Wells and boreholes
  • Total length drilled/bored (m | ft)
  • capacity (m³ | ft³ | litres | gallons per hour)
Power-generating plants
  • Site area (area of land covered by permanent work, excluding temporary working areas outside the site) (hectares | acres)
  • capacity (MW)
Chemical plants
  • Site area (area of land covered by permanent work, excluding temporary working areas outside the site) (hectares | acres)
  • output of products (m³ | ft³ | tonnes | tons | litres | gallons per day)
Refineries
  • Site area (area of land covered by permanent work, excluding temporary working areas outside the site) (hectares | acres)
 
Refineries
  • Site area (area of land covered by permanent work, excluding temporary working areas outside the site) (hectares | acres)
  • input of crude oil (tonnes | tons | litres | gallons | barrels per day)
  • output of products (tonnes | tons | litres | gallons | barrels per day)
Dams and reservoirs
  • Site area (surface area of stored liquid at maximum capacity) (square km | square miles)
  • reservoir capacity (million m3 | million yd3)
  • power generation capacity (MW)
Mines and quarries
  • Site area (area of land covered by permanent work, excluding temporary working areas outside the site) (hectares | acres)
  • ore extraction (tonnes | tons per annum)
  • throughput of product (tonnes | tons per day)
Offshore structures
  • Surface area of platform (m2 | ft2)
  • Mass prefabricated offshore structure (tonnes | ton)
  • crude oil production (tonnes | tons/day | barrels/day)
  • natural gas production (measured at 100 kPa (0.987 atmosphere) and 15oC or 14.696 psi (1 atmosphere) and 60oF (m3 | ft3)
  • electricity production MWh | BTU
Nearshore works
  • Quay length + retaining height (m + m | ft + ft)
  • Number of fenders
  • Fender surface load (kN/m² | Ib/ft²)
  • Surface area of quayside (m2 | ft2)
  • Site area (area of land covered by permanent work including land reclaimed from the sea, excluding temporary working areas outside the site) (hectares | acres)
  • description and units to be provided where possible
Ports
  • Quay length + height (from seabed to top of retaining structure) (m + m | ft + ft)
  • Surface area of structure (m2 | ft2)
  • Volume of breakwaters/dredging/ other stated (m3 | ft3)
  • Site area (area of land covered by permanent work including land reclaimed from the sea, excluding temporary working areas outside the site) (hectares | acres)
  • functional units (ships | passengers | tonnes | tons per year)
Waterway works
  • Length of structure (m | ft)
  • Site area (area of land covered by permanent work including land reclaimed from the sea, excluding temporary working areas outside the site) (hectares | acres)
  • description and units to be provided where possible
Land formation and reclamation
  • Total land area (hectares | acres)
 

 

End of Page

Procurement Strategy 採購策略

Procurement Strategy 採購策略 KCTang

Go to End

Note 註

29/1/2024: Revised.

19/2/2023: Revised.

20/12/2014: Moved from wiki.

Intro 介紹

Need 需要

  • Quantity Surveyors need to have knowledge to advise on the procurement strategy and contractual arrangement.
    工料測量師需具備就採購策略和合約安排提供建議的知識。

(added, 19/2/2023)

Why contract out? Why call for tenders? 為什麼要外包? 為什麼要招標?

  1. Find someone to do it for you.
    找人幫你做
  2. Someone:
    該人:
    • More capable
      較有能力
    • Statutorily qualified
      有法定資格
    • Less costly.
      成本較低
  3. Accountability in case of joint venture.
    合資企業的問責。

When to decide? 什麼時候決定?

  • As early as when the first project programme is developed.
    早在第一個項目計劃制定時。

Which types of contractual arrangement? 哪些類型的合同安排?

  • Traditional or special? 傳統還是特殊?

Classification of contract types based on 不同的合同形式的分類

Contract scope 按承包範圍分類

  1. Design.
    設計
  2. Build.
    施工
  3. Design and build / turnkey / package deal / engineering, procurement and construction:
    設計和施工 / 交鑰匙 / 統包  /  設計、採購和施工
    • 優點:
      • 工程太簡單不必請建築或工程師。
      • 取得承包方特有而一般的建築或工程師沒有的特殊設計優點。
      • 取得承包方特有的建造方法或產品。
      • 設計及施工時間可重疊,相應縮短了工期。
      • 總的來說可省一些設計費。
      • 由承包方單一負責,而減少多方參與責任不清的程度。有時這個好處被視為最大優點,使到根本不存在上述2及3點的工程都採用。
      • 總造價較有保証。
      • 可規定成品能滿足意向功能,此乃高於一般只需行使合理技能的標準。
      • 在全包的情況下,承包方的索賠機會較少。
    • 缺點:
      • 發包方的要求寫得太死,承包方沒有自由設計的空間。
      • 發包方的要求寫得太鬆,不能表達到預期的成果,或有空間給承包方索賠。
      • 發包方不能隨意改動要求。
      • 發包方對設計的改動要求,是屬於原要求範圍內還是超出範圍,往往會有爭議。
      • 真的超出範圍而需計算增加費用時,因可能要與一個尚未設計好便改動了的方案比較,難度比較大。減內容亦有類似的問題。
      • 鑑於總造價是基本封頂的,發包方會傾向在具體設計時增加內容及取最高的標準,令承包方吃虧。
      • 鑑於總造價是基本封頂的,承包方會傾向在具體設計時盡量省料及取最低的標準,令發包方吃虧。
      • 雙方合作不愉快時,爭議反為多了。
  4. Design, build and operate.
    設計、施工、營運

Contract relationship 按承包關係分類

  1. Traditional main contracting.
    傳統總承包
  2. Management contracting.

    管理承包

  3. Construction manager.

    施工管理經理

Pricing basis 按投標基礎分類

  1. Based on firm bills of quantities, with reference to drawings and specification.
    按確定工程量清單,參閲圖紙及規範
  2. Based on provisional bills of quantities, with reference to drawings and specification.
    按暫定工程量清單,參閲圖紙及規範
  3. Based on drawings and specification, without bills of quantities. Submitted as quotations / schedule of rates / schedule of quantities and rates / activities schedules.
    只按圖紙及規範,不含工程量清單。以報價單 / 單價表 / 有量單價表 / 活動表提交
  4. Based on pre-priced schedule of rates, competing on adjustment percentages.
    按預設單價表,競爭調整費率

Pricing nature 按標價形式分類

  1. Lump sum total, with unit rates.
    總價報價,輔以單價
  2. Rates only, without total.
    單價報價,無總價
  3. Percentage.
    費率報價

Degree of risks 按風險程度分類

  1. Fixed price.
    固定價
  2. Price with fluctuation.
    可調價
  3. Cost plus fee (lump sum fee, fixed percentage fee, scaled percentage fee, sharing).
    成本加服務費(一筆過、固定費率、遞減費率、分成)
  4. Ceiling price / Guaranteed Maximum Price.
    封頂價

Funding arrangement 融資安排

  1. All funded by the employer.
    • 全由發包方安排
  2. Public-private partnerships:
    公私營合作

Degree of commitment

  1. One-off contracts.
  2. Term contracts.
  3. Serial contracts.
  4. Standing offers.
  5. Framework contracts:
    https://www.designingbuildings.co.uk/wiki/Framework_contract
  6. Prime contracts:
    https://www.designingbuildings.co.uk/wiki/Prime_contract

How to package contracts?

  1. Optimum balance between the time required to complete every design and the time required to construct.
  2. Optimum balance between single line responsibility and more control over choosing sub-contractors and suppliers.
  3. Specialist works by specialist contractors/sub-contractors.
  4. Responsibility for delivery time and wastage to be watched out if nominated supply contracts are used.

Usual contract packaging 總包分包的分拆

  1. Site Survey Contract.

    現場勘察合同

  2. Ground Investigation Contract.

    地質勘察合同

  3. Demolition Contract.
    拆卸工程合同
  4. Piling Contract.
    基樁合同
  5. Main Contract.
    主合同
  6. Sub-Contract.
    分包合同
  7. Supply Contract.
    供應合同
  8. Other Direct Contracts.
    其他獨立合同

Which form of contract?

  1. Private or public?
  2. Domestic or international?
  3. Standard form or specially drafted?
  4. Old or new versions?
  5. With how much amendments?
  6. How harsh?
  7. See Forms of Contract.

Risks sharing 風險的分擔

  1. Soil conditions.
    土質
  2. Underground obstructions.
    地下障礙物
  3. Phased possession of site and completion.
    分階段交付工地及竣工
  4. Time for completion.
    工期
  5. Liquidated damages.
    誤期賠償
  6. Grounds for extension of time.
    工期延長的許可原因
  7. Grounds for monetary claims.
    索賠的許可原因
  8. Insurances and bonds.
    保險及擔保
  9. Defects liability period / defects rectification period.
    保修期
  10. Payment terms.
    付款辦法

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Guaranteed Maximum Price 封頂價

Guaranteed Maximum Price 封頂價 KCTang

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30/1/2024: Some typos corrected.

20/12/2014: Moved from wiki.

  1. What does “guaranteed maximum price” mean?
    • It means the maximum price payable to the Contractor after completion of the Works and defects rectification.
  2. Who is to bear when the final price is more than the guaranteed maximum price?
    • The Contractor.
    • From the Contractor’s point of view, individual cost overruns must be allowed to be balanced by individual cost savings.
  3. Who is to gain when the final price is more than the guaranteed maximum price?
    • The Employer. 
    • The Contractor may have a share.
  4. Why a guaranteed maximum price is required?
    • The Employer wants certainty in budgetary control.
  5. When would a guaranteed maximum price arrangement be feasible?
    • The design is not fixed yet such that the Contractor can design to stay within the guaranteed maximum price
    • The design is complete but the Contractor can provide better alternatives.
  6. What kinds of employers would prefer a guaranteed maximum price contract?
    • Non-professional developers and owners.
    • Those who want certainty in budgetary control.
    • Those who want to seek excellence in design and construction management.
  7. What types of contractors are qualified for a guaranteed maximum price contract?
    • Those who have design expertise.
    • Those who have site management team understanding the risks of guaranteed maximum price contract.
  8. Why are guaranteed maximum price contracts used more in the United States?
    • The Contractor is on-board upon the inception of early design stage.
    • The Contractor is responsible for the design or the development of design.
    • The Architect only provides schematic design or design intent.
  9. When can the guaranteed maximum price be varied?
  10. What should constitute a Variation?
    • “A material change in the nature, type, quality or quantity of any goods, materials or workmanship specified in the GMP Works Contract. A change to any work including advance preparation and procurement works which has been commenced or completed at the time the variation is issued. A change to any specified sequence, timing (including acceleration measures) or method of construction. Every case excludes Design Development.” ???
  11. What is design development?
    • Development of the brief or design intent into working details for construction.
    • “Any development or progress of the design of the Works from the state of the design set out in the Contract towards finalization in a form suitable for construction and includes the clarification, elaboration, supplementing and/or augmenting of any method statement, drawing, specification or any other document or thing pertaining to such design.” ???
  12. What is design development instruction?
    • “Any Instruction issued by the Management Contractor to the GMP Works Contractor in relation to Design Development including the provision of drawings, details, or information necessary for the GMP Works Contractor to carry out and complete the Works which instruction shall not initiate an adjustment to the GMP and shall not constitute a Variation.” ???
    • “The Design Development process shall not include the introduction of Variations as defined, such Variations shall only be ordered by GMP Instructions.” ???
  13. How should the Contractor tender and price for guaranteed maximum price contracts?
    • Make sure that there is room for cost saving from the tendered design.
  14. How can the Contractor survive after tender award?
    • Make sure that there is room for cost saving from the tendered design.
  15. Why is design development important to the Contractor?
    • Put the design under the Contractor’s control to ensure that the final design, materials, workmanship and method would not exceed the guaranteed maximum price.
  16. Should the Contractor want the design details to be provided by the Architect?
    • No, the chances are the Architect will want to perfect and upgrade the design such that the costs will become higher.
  17. How should the difference between a prime cost sum and its initial awarded sum or its final expenditure be treated?
  18. How should the guaranteed maximum price be adjusted for direct loss and/or expense, liquidated damages, acceleration, costs of defects rectification, and the Contractor’s alternative design proposals, provisional quantities, p.c. rates?

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Demarcation between Costs and Fee

Demarcation between Costs and Fee KCTang

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Note

21/3/2024: NEC Schedules moved to here.

4/3/2024: NEC Schedules changed to table form.

29/1/2024: Updated to include NEC Schedules of Cost Components.

12/1/2018: Created.

Views written on 22 Aug 2005

For cost plus contracts, arguments can easily arise as to whether an expenditure should be treated as part of the reimbursable costs or part of the fees. Essentially those items which can be carried out by the head office of the Contractor rather than on site may be regarded as part of the office overheads and therefore as part of the fee rather than costs. Contractors would try to argue in reverse. Items which need careful descriptions in the cost plus contracts to avoid arguments include:

  1. Types and extent of design responsibilities.
  2. Types and number of head office supervisory, technical and clerical staff to be employed and deemed to be part of the fee.
  3. Types and number of supervisory, technical and clerical staff to be specifically provided for the Contract and chargeable as costs.
  4. Expenses in connection with sub-letting which can be done by the tendering and purchasing department of the Contractor at the head office or alternatively by a dedicated team, such as sourcing tenderers, preparing tender documents, inviting tenders, analysing tenders, preparing contracts.
  5. Types and extent of attendance of head office administrative nature rather than physical work upon sub-contractors and suppliers.
  6. Effects of fluctuations in the costs of labour, materials or plant, exchange rates of currencies, or Government taxes, fees and charges.
  7. Interests on money, finance charges, patent right and royalty.
  8. Entertainment expenses for customers and visitors, customary mid-year and year end gift expenses, expenses in connection with ceremonies at commencement of works, completion of works or part thereof, celebration and obituary offering expenses.
  9. Types and extent of taxes, fees or charges.
  10. Costs in connection with the obtaining of permits, approvals, consents from Government, local authorities and statutory undertakers.
  11. Import duties, custom clearance, administrative handling charges.
  12. Types and extent of usual preliminaries to be deemed to be part of the fee.
  13. Extent of Contractor's site office expenses including costs of stationery, paper, accounts, printing, fuels, office equipment.
  14. Site transportation vehicles including fuel charges, insurances and license fees.
  15. Extent of Contractor's communication expenses such as postal charges, telex, telegram, long distance calls, etc.
  16. Contra-charges imposed by the Builder for loading and unloading of materials, use of lifts and hoists, removal of rubbish, use of water and electricity, damage by one trade upon the other
  17. Acceleration and overtime to catch up programmes.
  18. Preparation of periodic reports and programmes.
  19. Taking of progress photographs.
  20. Provision of portable safety measures, first-aid kits.
  21. Accidental damage to utilities, roads and footpaths.
  22. Types and extent of protection, cleaning, rubbish removal and maintenance work during construction.
  23. Watchmen.
  24. Setting out team and responsibility.
  25. Types and extent of insurances. Deductibles under insurance policies.
  26. Types and extent of common plant, tools, etc.
  27. Extent of scaffolding, working platform at high levels, temporary supports, etc.
  28. Extent of hoardings, screens, protective covering to be provided.
  29. Establishment, operation and removal of storage sheds, workshops, offices, latrines.
  30. Off-site storage.
  31. Use of telephone, water and electricity. Provision of temporary plumbing, electrical installation, etc.

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Law of Contract

Law of Contract KCTang

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Note

Unfinished - Work in progress.

17/2/2024: Created.

Intro

This gives some simple statements of principles of the law of contract. References have been made to "The Law of Contract, Fourth Edition 1974" written by W.T. Major in order to compile these statements.

Contract

  1. A bilateral contract is created upon unqualified acceptance of an offer.
  2. A unilateral contract is created upon the offeree's performance according to an offer.
  3. An agreement "subject to contract" is not binding.
  4. There must be an intention to create binding legal relations.
  5. An agreement cannot oust the jurisdiction of the courts.

Offer

  1. An offer must be clear, complete, and final.
  2. An invitation to treat is not an offer.
  3. A mere statement of price is not an offer.
  4. An offer must be communicated to the offeree.
  5. An offer may be communicated orally or in writing or be implied from conduct.
  6. An offer to a particular person or group of persons can only be accepted by those persons.
  7. An offer to the world at large can be accepted by any person having the notice of the offer and fulfilling the terms of the offer.
  8. An offer can be withdrawn (revoked) at any time before valid acceptance.
  9. An undertaking to keep the offer open for a specified time is not binding unless the offeree gave consideration in return for it to make it a binding contract (known as an option).
  10. Revocation is effective if and when it is actually (including by post or indirectly) communicated to the offeree.
  11. An offer may lapse by passage of time (acceptance not made within the specified time or, if not specified, within a reasonable time). 

Tender

  1. An invitation to tender is an invitation to treat.
  2. A tender in response to an invitation to tender is an offer.
  3. A tender can be a definite offer or a standing offer.
  4. A definite offer becomes a binding contract if accepted without change.
  5. A standing offer is open for acceptance more than once, and each such acceptance will make a distinct contract.
  6. A standing offer may be revoked at any time unless if it is given under seal or consideration is given for it to be held open for a specified time.

Acceptance

  1. An acceptance of an offer must be communicated to the offeror in the case of bilateral contract.
  2. If acceptance by post is permitted by the offer, acceptance is communicated at the time the letter of acceptance is properly posted.
  3. An acceptance of an offer must be unqualified and must correspond exactly with the terms of the offer.
  4. An acceptance which changes the terms of the offer becomes a counter-offer and the offer is deemed to have lapsed.
  5. An acceptance "subject to contract" is not binding.
  6. Where the parties are in different countries, the place sending the acceptance by letter or cable will be the place of the contract unless otherwise specified in the offer.
  7. Where the parties are in different countries, the place receiving the acceptance by telex will be the place of the contract unless otherwise specified in the offer.
  8. The mode of acceptance must comply with the terms of the offer.

Rejection of Offer

  1. An offer rejected expressly or impliedly cannot subsequently be accepted by one who rejected it.
  2. An express rejection is effective when notice of it has reached the offeror if no acceptance by the same person has reached the offeror earlier.

Consideration

  1. A simple contract must have valuable consideration exchanged.
  2. A valuable consideration "may consist either in some right, interest, profit, or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered, or undertaken by the other". (Currie v. Misa 1875)
  3. A consideration may be executory (to be done in return for a promise already made) or executed (done in return for a promise already made).
  4. Consideration must be real (or sufficient).
  5. Consideration need not be adequate.
  6. Consideration must move from the promisee.
  7. Consideration must not be past (done before the other party's promise is made).
  8. Consideration must not be illegal.
  9. Consideration must not be vague.
  10. Consideration must be possible of performance.
  11. Waiver of a contractual right without consideration exchanged is not binding.
  12. Consideration makes a waiver binding.
  13. Payment of a lesser sum without consideration exchanged does not discharge an existing obligation to pay a greater sum.
  14. Payment of a lesser sum by a third party in agreement with the creditor discharges the debtor's obligation to pay a greater sum.

Terms of a Contract

  1. The terms of a contract can be expressed or implied.
  2. Express terms are express statements made by the parties and intended to bind the parties.
  3. Implied terms can be implied according to statutory obligations or to give effect to the presumed intentions of the parties.
  4. Mere statements made during the making of a contract without intention to be binding are not valid terms.
  5. Construction of a contract means how the contract terms should be construed (explained).
  6. Words are presumed to have their ordinary literal meaning.
  7. Legal terms are presumed to have their special meaning.
  8. Where words have both legal and ordinary meaning, the legal meaning will be preferred.
  9. Where the meaning of words is not clear, or where two terms cannot be reconciled, the intention of the parties will prevail.
  10. Specially prepared document takes precedence over standard printed form.
  11. The contract will be construed most strongly against the party who drew it up. (contra proferentum rule).

 End of Page 

Forms of Contract

Forms of Contract KCTang

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Note

  • 29/1/2024: Updated to include NEC and HKHA contracts.
  • 19/2/2023: Revised. SFBC clause headings added.
  • 18/3/2020: Revised.
  • 20/12/2014: Moved from wiki.

Standard Forms of Contract for use in Hong Kong 香港的標準合約

Old Private Forms of Building Contract

  • Drawn up by the Hong Kong Institute of Architects, the Royal Institution of Chartered Surveyors (Hong Kong Branch) and the Society of Builders, Hong Kong:
    • Agreement & Schedule of Conditions of Building Contract for use in the Hong Kong Special Administrative Region, First RICS (HK Branch) Edition 1986 (with quantities) incorporating up to Second amendments published in July, 1999 (SFBCwQ.1986(2ndAmend.July1999))
    • Agreement & Schedule of Conditions of Building Contract for use in the Hong Kong Special Administrative Region, First RICS (HK Branch) Edition 1986 (without quantities) incorporating up to Second amendments published in July, 1999 (SFBCnQ.1986(2ndAmend.July1999))
    • Sub-Contract for use where the Sub-Contractor is nominated under the Standard Form of Building Contract for Hong Kong, First RICS (HK Branch) Edition 1986 incorporating up to Second amendments published in February, 2000.

New Private Forms of Building Contract

  • Published by the Hong Kong Institute of Architects, the Hong Kong Institute of Construction Managers and the Hong Kong Institute of Surveyors:
    • Agreement & Schedule of Conditions of Building Contract for use in the Hong Kong Special Administrative Region, Private Edition – With Quantities, 2005 Edition (SFBCwQ.2005)
    • Agreement & Schedule of Conditions of Building Contract for use in the Hong Kong Special Administrative Region, Private Edition – Without Quantities, 2006 Edition (SFBCnQ.2006)
    • Agreement & Schedule of Conditions of Nominated Sub-Contract for use in the Hong Kong Special Administrative Region, 2005 Edition
  • The private forms may be purchased from the Hong Kong Institute of Surveyors, 111 Connaught Road Central, Sheung Wan, Hong Kong.

Government Forms of Contract

(revised, 19/2/2023)

 

NEC4 - New Engineering Contract

  • Published by Thomas Telford Ltd, which is a wholly owned subsidiary of the Institution of Civil Engineers (ICE), the owner and developer of the NEC. 
    • Option A: Priced contract with activity schedule 
    • Option B:  Priced contract with bill of quantities 
    • Option C: Target contract with activity schedule 
    • Option D: Target contract with bill of quantities 
    • Option E: Cost reimbursable contract 
    • Option F: Management contract.

Housing Authority General Conditions of Contract for Capital Works

(added, 29/1/2024)

MTR Corporation Ltd.'s Own Standard Forms before moving to use NEC

  • Conditions of Contract for Civil Engineering and Building Works Construction.
  • Conditions of Contract for Design and Build.
  • Conditions of Contract for E&M.
  • Conditions of Contract for Major Works.
  • Conditions of Contract for Minor Works.
  • Conditions of Contract for Entrustment Works.

Clause headings of SFBCwQ.2005

Contents

Articles of Agreement

Attestation

The General Conditions

1        Interpretation and definitions

2        Contractor's obligations

3        Master programme

4        Architect's instructions

5        Documents forming the Contract and other documents

6        Statutory obligations

7        Setting out the Works

8        Materials, goods, workmanship and work

9        Intellectual property rights

10        Contractor's site management team

11        Access for the Architect to the Works

12        Architect's representative

13        Variations, Provisional Quantities, Provisional Items and Provisional Sums

14        Contract Bills

15        Contract Sum

16        Materials and goods on or off-site

17        Substantial Completion and defects liability

18        Partial possession by Employer

19        Assignment and sub-letting

20        Injury to persons and property and indemnity to Employer

21        Insurance against injury to persons or property

22        Insurance of the Works

22A      Insurance of the Works by the Contractor

22B      Insurance of the Works by the Employer

22C      Insurance of existing building and insurance of the Works by the Employer

23        Possession, commencement and completion

24        Damages for non-completion

25        Extension of time

26        Delay recovery measures

27        Direct loss and/or expense

28        Notice of claims for additional payment

29        Nominated Sub-Contractors and Nominated Suppliers

30        Persons engaged by Employer

31        Facilities for statutory undertakers and utility companies

32        Certificates and payments

33        Surety bond

34        Antiquities

35        Determination by Employer

36        Determination by Contractor

37        Determination by Employer or Contractor

38        Fluctuations

39        Notices, certificates and other communications

40        Recovery of money due to the Employer

41        Settlement of disputes

Appendix

Schedule 1 - Form of Surety Bond to be given by the Contractor to the Employer

Schedule 2 - Form of Warranty to be given by the Nominated Sub-Contractor to the Employer in consideration of Nomination

Schedule 3 - Form of Warranty to be given by the Nominated Supplier to the Employer in consideration of Nomination

Index to the General Conditions

(added, 19/2/2023)

 

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Standard Form of Building Contract 2005/2006 (removed)

Standard Form of Building Contract 2005/2006 (removed) KCTang

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Agreement & Schedule of Conditions of Building Contract for use in the Hong Kong Special Administrative Region (Standard Form of Building Contract)

8/7/2021: Full version with commentary removed because of copyright issue.

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Standard Form of Nominated Sub-Contract 2005 Edition (removed)

Standard Form of Nominated Sub-Contract 2005 Edition (removed) KCTang

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Agreement & Schedule of Conditions of Nominated Sub-Contract for use in the Hong Kong Special Administrative Region, 2005 Edition

8/7/2021: Full version with commentary removed because of copyright issue.

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Draft Standard Form of Domestic Sub-Contract 標準自選分包合同草擬

Draft Standard Form of Domestic Sub-Contract 標準自選分包合同草擬 KCTang

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Note

26/12/2014: Moved form wiki.

Draft Standard Form of Domestic Sub-Contract
標準自選分包合同草擬

CIC Taskforce Meetings and Snapshots of Draft
建造業議會專責小組會議及討論稿存照

基本工種標準自選分包合約指引 https://www.hkcic.org/files/eng/documents/publications/Guideline-SF-w.pdf

 

15/12/2014 Full draft of English version with language style only changed 英文版全稿(只改文句款式) Standard Form of Domestic Sub-Contract - English (20141215a).pdf
20/10/2014 Full draft of English version
and Changes to draft dated 26/9/2014
英文版全稿
及對26/9/2014稿的修改
Standard Form of Domestic Sub-Contract - English (20141020a).pdf
Standard Form of Domestic Sub-Contract - English (changes from 20140926 to 20141020).pdf
14/10/2014 32nd Meeting 第卅二次會議  
26/9/2014 Full draft of English version with changes to draft dated 14/1/2014 與14/1/2014稿對照的英文版全稿 Standard Form of Domestic Sub-Contract - English (Draft with changes 20140926a).pdf
14/1/2014 Full clean drafts of English version and Chinese version 英文版及中文版全淨稿 Standard Form of Domestic Sub-Contract - English (Clean Draft 20140114a).pdf
Standard Form of Domestic Sub-Contract - Chinese (Clean Draft 20140114a).pdf
14/1/2014 Full drafts of English version and Chinese version with changes to draft dated 24/1/2013 與24/1/2013稿對照的英文版及中文版全稿 Standard Form of Domestic Sub-Contract - English (Draft with changes 20140114a).pdf
Standard Form of Domestic Sub-Contract - Chinese (Draft with changes 20140114a).pdf
13/1/2014 31st Meeting 第卅一次會議  
11/1/2014 Full drafts of English version and Chinese version with changes to draft dated 24/1/2013 與24/1/2013稿對照的英文版及中文版全稿 Standard Form of Domestic Sub-Contract (Draft 20140111e).pdf
Standard Form of Domestic Sub-Contract (Draft 20140111c).pdf
3/1/2014 Full draft of English version with changes to draft dated 24/1/2013 與24/1/2013稿對照的英文版全稿 Standard Form of Domestic Sub-Contract (Draft 20140103e).pdf
16/12/2013 30th Meeting 第卅次會議  
11/11/2013 29th Meeting 第廿九次會議  
28/10/2013 28th Meeting 第廿八次會議  
3/10/2013 27th Meeting 第廿七次會議  
10/9/2013 26th Meeting 第廿六次會議  
27/8/2013 25th Meeting 第廿五次會議  
16/8/2013 24th Meeting 第廿四次會議  
23/7/2013 23rd Meeting 第廿三次會議  
21/6/2013 Comments on draft dated 24/1/2013 up to 21/6/2013 21/6/2013為止收集到的對24/1/2013稿的意見 Standard Form of Domestic Sub-Contract (Draft 20130621).pdf
24/1/2013 Full draft after break 休會後全稿 Standard Form of Domestic Sub-Contract (Draft 20130124).pdf
12/3/2012 22nd Meeting 第廿二次會議  
17/2/2012 21st Meeting 第廿一次會議  
9/1/2012 20th Meeting 第廿次會議  
19/12/2011 19th Meeting 第十九次會議  
25/11/2011 18th Meeting 第十八次會議  
14/11/2011 Draft of Section 11 第十一條稿 Domestic Sub-Contract Section 11 at 2011114.pdf
7/11/2011 17th Meeting 第十七次會議  
2/11/2011 Draft of Section 11 第十一條稿 Domestic Sub-Contract Section 11 at 2011102.pdf
  Previous draft of Section 11 之前的第十一條稿 Domestic Sub-Contract Section 11 before 2011102.pdf
17/10/2011 16th Meeting 第十六次會議  
26/9/2011 15th Meeting 第十五次會議  
9/8/2011 Draft of Section 10 第十條稿 Domestic Sub-Contract Section 10 at 20110909.pdf
11/8/2011 14th Meeting 第十四次會議  
5/8/2011 Draft of Section 10 第十條稿 Domestic Sub-Contract Section 10 at 20110805.pdf
  Previous draft of Section 10 之前的第十條稿 Domestic Sub-Contract Section 10 before 20110805.pdf
7/7/2011 13th Meeting 第十三次會議  
9/6/2011 12th Meeting 第十二次會議  
3/6/2011 Drafts of Sections 8 and 9 第八及九條稿 Domestic Sub-Contract Section 9 at 20110603.pdf
Domestic Sub-Contract Section 8 at 20110603.pdf
  Previous drafts of Sections 8 and 9 之前的第八及九條稿 Domestic Sub-Contract Section 9 before 20110603.pdf
Domestic Sub-Contract Section 8 before 20110603.pdf
16/5/2011 11th Meeting 第十一次會議  
4/5/2011 Drafts of Section 7 第七稿 Domestic Sub-Contract Section 7 at 20110504.pdf
15/4/2011 10th Meeting 第十次會議  
1/4/2011 9th Meeting 第九次會議  
28/2/2011 8th Meeting 第八次會議  
21/2/2011 Partial draft 部分稿 Domestic Sub-Contract snapshot at 20110221.pdf
20/1/2011 7th Meeting 第七次會議  
18/1/2011 Partial draft 部分稿 Domestic Sub-Contract snapshot at 20110118.pdf
6/12/2010 6th Meeting 第六次會議  
6/12/2010 Partial draft 部分稿 Domestic Sub-Contract snapshot at 20101206.pdf
1/11/2010 5th Meeting 第五次會議  
1/11/2010 Partial draft 部分稿 Domestic Sub-Contract snapshot at 20101101.pdf
5/10/2010 4th Meeting 第四次會議  
6/9/2010 3rd Meeting 第三次會議  
2/8/2010 2nd Meeting 第二次會議  
28/6/2010 1st Meeting 第一次會議  

 

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Special Features in the Standard Form of Contract for Maintenance and Renovation Works for Use in Hong Kong, First Edition 2013

Special Features in the Standard Form of Contract for Maintenance and Renovation Works for Use in Hong Kong, First Edition 2013 KCTang

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Note

27/4/2020: Chinese terms added. Clause 12.4.3 specially amended to opt for Schedule 2 to the Arbitration Ordinance.

24/2/2015: Created.

FOREWORD

The Hong Kong Institute of Surveyors has published a Standard Form of Contract for Maintenance and Renovation Works (維修及裝修工程標準合同) for use in Hong Kong, First Edition 2013 (First Amendments in December 2014) to cater to the need of major maintenance and renovation works, instead of using the current Standard Form of Building Contract which is mainly for new construction.

This article presents the key features introduced in the new form of contract to suit the special nature of major maintenance and renovation works.

PREVAILING SITUATION

Hong Kong is densely populated with blocks of high rise residential buildings.

They are under multiple ownerships.

After decades of development, a lot of these buildings require major repair and maintenance works such as repair of spalling concrete, re-surfacing of external facades, replacement of plumbing and drainage systems, refurbishment of lobbies and staircases, etc. which are the common properties of the multiple ownership.

The market of the major repair and maintenance works is huge.

Generally, the Standard Form of Building Contract, which is basically for new construction, is used and adapted for these maintenance works in the private sector.

Special conditions of contracts are introduced:

  • Some of them are poorly drafted causing argument over interpretation.
  • Some of them are very harsh.
  • Some of the harsh terms are for the building professionals’ convenience.
  • Some are driven by the building owners who are mostly laymen pressing for commercial terms unusual to the construction industries.

Preliminaries clauses are also usually adapted from those used for new construction:

  • They have become extensive because they have been added on top of those used for new construction and have accumulated from project after project.
  • To play safe, irrelevant clauses are not readily deleted.
  • This makes the Preliminaries rather complicated and cumbersome.
  • Some of them are repetitive but inconsistent amongst themselves and with the Form of Contract.

The overall tender and contract documents are not easily understood by building owners.

This also applies to the junior building professionals managing the contracts.

INITIATION FOR CHANGE

New versions of the Standard Form of Building Contract (“SFBC”) were published in 2005 (with quantities version) and in 2006 (without quantities version) to reflect the latest legal development and the more complicated modern day construction practice.

The documents have become thicker with more clauses.

It was considered to be too complicated for repair and maintenance works.

The building professionals would likely stay with the old versions when handling repair and maintenance works.

On the initiation of the Building Surveying Division of the Hong Kong Institute of Surveyors, and with the co-operation of the Quantity Surveying Division, a Standard Form of Contract for Maintenance and Renovation Works was drafted and published in 2013 (“Standard Form”).

The First Amendments were published in December 2014 mainly for the correction of typographical errors.

INTENDED PURPOSES

The intended purposes of the Standard Form are as follows:

  • Project types:
    • tailor-made for major maintenance and renovation works:
      • whether residential buildings or not
      • not involving nominated sub-contracts (which is the usual case)
    • also useful for fitting out works which do not involve nominated sub-contracts
    • to be managed by building professionals:
      • who can be architects, engineers or surveyors, instead of traditionally “the Architect”
  • Provisions:
    • comparatively simple to read
    • simple yet comprehensive enough to cover all the basics
    • reduce the need for special contract conditions
    • reduce cumbersome preliminaries clauses
    • more structured for inserting and supplementing with project specific information
    • contain good and equitable practice
    • standard provisions will offer better persuasion to building owners to use more equitable terms
  • Building owners:
    • can understand their contractual rights and obligations more easily
  • Building professionals:
    • tasks to draft special contract conditions and preliminaries reduced
    • volume of paper reduced
    • easier to administer the contracts
  • Contractors
    • less exposed to ambiguous harsh terms
    • able to offer better prices and end products.

CONTENTS

The Standard Form is made up of the following sections:

  • Contract Agreement (合同協議) (7 pages)
    • 4 Recitals (序文)
    • 4 Articles (約章)
      • Object of this Contract (合同標的)
      • Contract Price (合同總價)
      • Contract Periods (合同工期)
      • Contract Documents (合同文件)
    • Signing section (簽署部分)
      • Options to sign as a deed (契約) or as a simple contract (簡單合同)
  • Particulars of Agreement (合同細節) (5 pages)
  • Contract Conditions (合同條款) (37 pages)
  • Appendix A – Surety Bond (Pro-forma) (履約保證書(樣本) )(4 pages)

The traditional terms of “Articles of Agreement’, “Conditions of Contract” and “Special Conditions of Contract” have been simplified to “Contract Agreement”, “Contract Conditions” and “Special Contract Conditions”.

The traditional “Appendix to the Conditions of Contract” has been replaced with “Particulars of Agreement”.

To reflect the actual practice, the following documentary flow is specifically envisaged by the Recitals and Articles:

  • Tender Documents (including Conditions of Tendering, Form of Tender, Special Contract Conditions, Specification, Schedule of Works and Drawings) ==> Tender Addenda ==> Tender ==> Tender Correspondence (including Letter of Award) ==> Contract Documents.

These documents together with the Standard Form of Contract make up the Contract Documents.

The pre-2005/2006 SFBC do not envisage Special Conditions of Contract, Tender Addenda and Tender Correspondence. SFBC 2005/2006 envisage Special Conditions of Contract and Tender Correspondence.

PARTICULARS OF AGREEMENT (合同細節)

The Particulars of Agreement are a part of the Contract Agreement which shall be read in conjunction with the Particulars of Agreement.

Other than the signing section, the Contract Agreement does not require any filling in of information. Project specific particulars are to be inserted in the Particulars of Agreement which are in a table form.

The Particulars of Agreement serve the purposes of the traditional Appendix to the Conditions of Contract but have been expanded to cover all the essential project specific particulars which may vary between projects.

There are 32 Items for entry of project specific particulars:

  • Contract Signing and Award Dates (合同簽訂日及定標日)
  • Project Title and Address (項目名稱及地址)
  • Contract Title, Works Description and Site Locations (合同名稱、本工程簡要說明及工地位置) (Site locations may be specific locations at the Project Address)
  • Contract Parties (合同雙方)
    • Employer (發包方)– name and address
    • Contractor (承包商) – name and address
  • Consultants (合同顧問)
    • Contract Administrator (合同監理) – name and address
    • Quantity Surveyor (工料測量師) – name and address
  • Contract Type and Price (合同類型及價款) (to select one)
    • Lump Sum Contract (總價承包合同)
    • Remeasurement Contract (重新計量合同)
    • Rates Only Contract (純單價承包合同)
  • Time (時間) (see PHASING below)
    • Site Access Dates (進入工地日期)
    • Works Sections (工程分部)
    • Contract Periods (工期)
    • Rate of Liquidated Damages for Delayed Completion (誤期竣工的算定賠償率)
    • Defects Liability Period (保修期)
  • Documents (文件)
    • Tender Documents (招標文件)
    • Tender Correspondence (投標來往函件)
  • Payment Terms (付款條款)
    • Amount of advance payment (預付款的金額)
    • Method of recovery of advance payment (扣回預付款的辦法)
    • Retention Percentage (保修金的百份率)
    • Maximum Retention (保修金上限)
    • Period for Honouring Payment (付款寬限期)
  • Insurances and Bond (保險及履約保證)
    • Contractors’ All Risks and Third Party Liability Insurance (工程一切險及第三者責任險)
      • Party responsible for taking out the insurance (負責投保的一方) - The Employer / the Contractor
      • Percentage of professional fees in case of reinstatement (重置時顧問費的百份率)
      • Amount for the removal of debris (殘礫清理保額)
      • Percentage for escalation clause (工程費上漲百份率)
      • Material Damage insurance excesses in respect of each and every occurrence of loss or damage (物質損壞保險就每次損失或破壞 事故的免賠額)
      • Limit of indemnity for third party liability (第三者責任險的賠償限額)
      • Third party liability insurance excess in respect of each and every occurrence of loss or damage (第三者責任保險的每次損失或破壞事故的免賠額)
    • Amount of Surety Bond (履約保證書的金額()
    • (No particulars needed for Employees’ Compensation Insurance here – covered by the Conditions)
  • Other Terms and Conditions (其他條款) (for entry of non-standard terms)

A set of partially completed Particulars of Agreement should be included in the Tender Documents for tendering.

The fully completed and updated set should be used for signing the Contract.

SIMPLIFICATION

Terms have been simplified:

  • “Contract Agreement” (合同協議) used for “Articles of Agreement’
  • “Contract Conditions” (合同條款) used for “Conditions of Contract”
  • “Special Contract Conditions” (特殊合同條款) used for “Special Conditions of Contract”
  • “Materials” (物料) defined to mean materials and goods, and include equipment or machinery for incorporation into the Works, eliminating the need to write “materials and goods” or “materials, goods and equipment” all the time
  • “Plant” (施工機械) defined to mean construction plant, equipment or machinery used for carrying out the Works

Instead of trimming down based on SFBC 2005/2006, the clauses have been completely re-written with a view of making them as simple as possible but keeping the principle of SFBC 2005/2006.

The Standard Form consists of 48 pages vs 98 pages for SFBC 2005/2006. In particular, the clauses on insurances have been very much simplified.

Provisions for Nominated Sub-Contracts and Nominated Supply Contracts have been omitted because they are not usually required for maintenance and renovation works.

PHASING 分期

The pre-2005/2006 SFBC do not envisage phased possession of the Site nor phased completion of the Works (though there is an optional Sectional Completion clause).

SFBC 2005/2006 do envisage phasing and use such expressions as “the whole or parts of the Site” and “the Works or a Section”.

To simplify, the Standard Form assumes phasing by default, simply uses the expressions "Portion of the Site" and “Works Section”, and requires the following entries in the Particulars of Agreement:

  Time (時間)    
18 Date for Access to the Site (進入工地日期) Portions of the Site (工地的部分) Date (日期)
Portion / Area / Zone X or 1 <>
Portion / Area / Zone Y or 2 <>
19 Names of Works Sections (工程分部的名稱) Phase / Section / Stage (期/分部/階段) Description (說明)
Phase A or 1 <>
Phase B or 2 <>
20 Contract Periods (工期) Works Sections (工程分部) Commencement Date (or a mechanism to determine the Commencement Date) (開工日(或定開工日的機制)) Completion Date (or a mechanism to determine the Completion Date) (應竣工日(或定應竣工日的機制)) Durations in calendar days (公曆天計的工期)
Phase A or 1 <> <> <>
Phase B or 2 <> <> <>
21 Rate of Liquidated Damages for Delayed Completion (If none or “N/A” stated, general damages apply) (誤期竣工的算定賠償率(如沒說明或注明“不適用”,則採用非算定賠償額)) Works Sections (工程分部) Rate HK$/calendar day (每一公曆天HK$)
Phase A or 1 <>
Phase B or 2 <>
22 Defects Liability Period (保修期) Works Sections (工程分部) Durations in calendar months after Completion Date of each Works Section (每工程分部竣工日後起以公曆月計的期限)
Phase A or 1 <>
Phase B or 2 <>

If there is no phasing, “the Whole” can be used for the Portions and Works Sections.

Each Works Section is to have its own Substantial Completion Certificate and Defects Rectification Certificate.

MORE ENCOMPASSING TERMS

More encompassing terms have been used:

  • “Contract Administrator” (合同監理) introduced to replace the usually used term “Architect” to provide more flexibility. He can be an architect, engineer or surveyor.
  • “Schedule of Works” (工程項目清單) introduced to replace Bills of Quantities, Schedule of Rates, Schedules of Quantities and Rates, and Summary of Tender. It can be with quantities or without quantities. Unlike Schedule of Rates whose descriptions are to define the coverage of the rates only, its descriptions can define the scope and quality of the work items and the Works as a whole. This can reduce the need to duplicate the detailed descriptions of the scope of the Works in the Specification.

MORE STRUCTURED

Contract Conditions – The order of the clauses in SFBC 2005/2006 or their predecessors does not follow any logical order probably because of the result of various additions to their predecessors over more than a hundred years. Unlike their rather random order, the Contract Conditions are structured into 12 sections, with the intention of making them easier and more logical to read, and making it easier for preliminaries clauses to be arranged in similar fashion to supplement with project specific details:

  1. Interpretations (釋義)
  2. Site (工地)
  3. Works (工程)
  4. Time (工期)
  5. Contract Basis (合同基礎)
  6. Prices (價款)
  7. Quality (質量)
  8. Contractor’s Documents (承包商的文件)
  9. General Obligations (一般責任)
  10. Insurances and Bond (保險及履約保證)
  11. Determination (終止)
  12. Dispute Resolution (爭議解決)

Comprehensive checklists - To eliminate the task of searching over the entire Contract Conditions for relevant clauses, and facilitate easier administration, comprehensive checklists have been given for:

  • computation of the net interim amount payable; and
  • computation of the final Contract Price (see below).

Excusable Events and Compensable Events (可延期事件及可賠償事件) - Events eligible for extension of time and monetary compensation are now called “Excusable Events” and “Compensable Events” respectively, instead of “listed events” and “qualifying events” in SFBC 2005/2006, to facilitate easier understanding. They have been presented in a tabular format for easier reading (see below).

UPDATING

To keep in line with modern day legal development since the pre-2005/2006 SFBC:

  • “Excepted Risks” has been adapted from that used in SFBC 2005/2006, but “a cause due to any neglect or default of the Architect, the Employer or any person for whom the Architect or the Employer is responsible” in SFBC 2005/2006 has been removed from the definition because it is considered to be too wide in scope.
  • “Excusable Events” and “Compensable Events” have been respectively adapted (with suitable adjustments) from the “listed events” and “qualifying events” used in SFBC 2005/2006. Like SFBC 2005/2016:
    • When an Excusable Event occurs in the period of delay after the (extended) Completion Date but before the substantial completion of a Works Section, extension of time shall still be granted but only for the net duration of the delay rather than granting the gross period until the end of the delay.
    • While the Contractor shall continuously use his best endeavours to prevent or mitigate delay or disruption to the progress of the Works however caused, and to prevent the completion of the Works from being delayed or further delayed, the use of best endeavours by the Contractor shall not require the Contractor to accelerate the carrying out of the Works to recover delay caused by an Excusable Event.
  • “Separate Contractor” has been defined, like SFBC 2005/2006, to exclude any statutory undertaker or utility company carrying out work in pursuance of its statutory obligations and not having a contractual relationship with the Employer, the Contractor or any person for whom the Employer or the Contractor is responsible. Pre-2005/2006 SFBC do not have such distinction.
  • “Variations” (工程變更) has been expanded, like SFBC 2005/2006, to include, apart from physical changes, a change to the time or manner for carrying out the Works.
  • Like SFBC 2005/2016, the dispute resolution procedures have been expanded from arbitration only to:
    • Reference to Designated Representatives (提交指派的代表解決);
    • Reference to Mediation (提交調解解決); and
    • Reference to Arbitration (提交仲裁解決).

Users who would like to stay with the pre-2005/2006 SFBC should be aware of the legal development.

To keep in pace with the new terms used in SFBC 2005/2006:

  • “Substantial Completion Certificate” (充份竣工證書) used to replace “Practical Completion Certificate” in pre-2005/2006 SFBC; and
  • “Defects Rectification Certificate” (保修完成證書) used to replace “Certificate of Completion of Making Good Defects” in pre-2005/2006 SFBC.

TAILOR-MADE ENHANCEMENTS

There are enhancements to suit the need of maintenance and renovation works. They are generally not available in the pre-2005/2006 SFBC. This made the Standard Form to have 48 pages vs 32 pages for the pre-2005/2006 SFBC.

1. Interpretations

Definitions - They have been introduced to simplify subsequent wording.

Building Manager (物業管理人) - The likely presence of a Building Manager, being the person providing estate, property or facility management services to the premises where the Site is (the Site can be within a part of existing premises), is recognized.

Counting days - The method of counting days has been clarified. A day means a calendar day unless otherwise stated. When counting days, 1 day means 24 hours. Within 1 day means within 24 hours, not within the same day. “Commencing or starting from a certain day” means that certain day is day 1 for counting. “Commencing or starting after a certain day” means the day following that certain day is day 1 for counting.

Defects Rectification Certificate (保修完成證書) - This term has been used, like SFBC 2005/2006, to replace “Certificate of Completion of Making Good Defects” in pre-2005/2006 SFBC, but with no intentional change of meaning.

Excepted Risks (免責風險) - Their definition has been introduced. They are:

(a) any consequence of war (whether war be declared or not) in which Hong Kong is actively engaged, the invasion of Hong Kong, acts of terrorists in Hong Kong, civil war, rebellion, revolution or military or usurped power in Hong Kong, riot, commotion or disorder in Hong Kong other than amongst the employees of the Contractor or any person for whom the Contractor is responsible;

(b) any direct consequence of the faulty design provided by the Contract Administrator or other designers engaged by the Employer or the Contract Administrator;

(c) ionising radiation or contamination by radioactivity from any nuclear fuel or from any nuclear waste from the combustion of nuclear fuel, radioactive toxic explosive or other hazardous properties of any explosive nuclear assembly or nuclear component thereof; and

(d) pressure waves caused by aircraft or other aerial devices travelling at sonic or supersonic speeds.

(a), (c) and (d) are the same as those newly introduced in SFBC 2005/2006. (b) has been intended to improve “the Architect’s design of the Works insofar as damage, loss or injury is the direct consequence of the design” as used in SFBC 2005/2006. “a cause due to any neglect or default of the Architect, the Employer or any person for whom the Architect or the Employer is responsible” in SFBC 2005/2006 has been removed from the definition because it is considered to be too wide in scope.

Excusable Events and Compensable Events (可延期事件及可賠償事件) - “Excusable Events” (with extension of time) and “Compensable Events” (with monetary compensation) have been introduced and adapted from the “listed events” and “qualifying events” in SFBC 2005/2006 to keep in line with modern day legal development since the pre-2005/2006 SFBC. They have been presented in a tabular format for easier reading:

Event Code (事件編碼) Delays or disruptions by reason of (由於下列原因引致有延誤或干擾) Excusable Events (可延期事件) Compensable Events (可賠償事件)
A Force majeure (不可抗力) Yes No
B Inclement weather conditions, being rainfall in excess of twenty millimetres in a twenty-four hour period (midnight to midnight) as recorded by the Hong Kong Observatory station nearest to the Site, and/or their consequences adversely affecting the progress of the Works (惡劣天氣情況,即香港天文臺最接近工地的監測站在24小時(零時到零時)內錄得超過20mm的降雨量,及/或它們的後果(對本工程的進度有不利影響的)) Yes No
C The hoisting of tropical cyclone warning signal No. 8 or above or the announcement of a Black Rainstorm Warning, and/or its consequences adversely affecting the progress of the Works (8號或以上的熱帶氣旋警告信號或黑色暴雨警告信號的發出,及/或它的後果(對本工程進度有不利影響的)) Yes No
D An Excepted Risk (免責風險) Yes Yes
E Fire, lightning, explosion, flood, bursting or overflowing of water tanks, apparatus or pipes, earthquake, aircraft and other aerial devices or articles dropped from them, not caused by the Contractor or any person for whom the Contractor is responsible (非由承包商或他應負責的任何人士造成的火災、閃電、爆炸、洪水、水箱或儀器或水管爆破或溢出、地震、飛機及其他飛行物體或從它們墜下的物件) Yes No
F Late provision of Contract Administrator’s instructions expressly required by this Contract to be provided by a specific time or before implementation of the matter being affected (合同監理未能及時於本合同明確要求的時間前或在實施受影響的事宜前提供所需的指示) Yes Yes
G Late provision by the Contract Administrator of instructions or information (including clarification of any ambiguity, discrepancy in or divergence between documents provided by the Employer or the Contract Administrator, and including outstanding or new information) required for the progressing of the Works, after taking into account any mitigating effect which could have been afforded if the Contractor had requested for such instructions or information reasonably in advance of the occurrence of the delays or disruptions (合同監理未能及時提供本工程持續進行所需 的指示或資料(包括對發包方或合同監理所提供的文件之內或之間的任何含糊、差異或分岐的地方作出澄清,及包括尚欠或新增的資料),但可計入如果承包商合理地提早要求該指示或資料時對延誤或干擾所造成的減輕效果) Yes Yes
H The opening up for inspection of work covered up or the testing of materials or work and the consequential making good which are additional to the Contract requirements and instructed by the Contract Administrator, provided that such materials and work are in accordance with this Contract (本合同原要求以外的、並經合同監理指示的、並證明到物料或工作乃符合本合同的,對已掩蔽的工作進行打開檢查或對物料或工作進行測試及其後的修復) Yes Yes
I The carrying out of a Variation or the happening of an event deemed to be a Variation (工程變更的進行或視為工程變更的事件的發生) Yes Yes
J Increase in the work to be carried out pursuant to provisional items in this Contract of sufficient magnitude that the increase was not apparent from the Contract Documents (按本合同內暫定款進行的工作大幅度增加,而該增幅不能從合同文件顯而易見的) Yes Yes
K A postponement of the Date for Access to any portion of the Site unless this Contract has provided for such occurrence (進入工地的任何部分的日期有延遲,除非本合同對該延遲已有規定) Yes Yes
L A postponement of the Commencement Date of a Works Section unless this Contract has provided for such occurrence (任何工程分部的開工日有延遲,除非本合同對該延遲已有規定) Yes Yes
M A suspension of the provision of the whole or a portion of the Site as instructed by the Contract Administrator beyond any provided for in this Contract and not being due to a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible (按合同監理的要求,超過本合同規定的程度,暫時中止提供工地的全部或部分,而不是因承包商或承包商應負責的任何人士的違約行為或其他過失造成的) Yes Yes
N A suspension of the progress of the whole or a part of a Works Section as instructed by the Contract Administrator beyond any provided for in this Contract and not being due to a breach of contract or other default by the Contractor or any person for whom the Contractor is responsible (按合同監理的要求,超過本合同規定的程度,暫時中止進行任何工程分部的全部或部分,而不是因承包商或承包商應負責的任何人士的違約行為或其他過失造成的) Yes Yes
O A delay or disruption caused by a Separate Contractor (其他承包商造成的延誤或干擾) Yes Yes
P A delay caused by a statutory undertaker or utility company carrying out work in pursuance of its statutory obligations, not having a contractual relationship with the Employer, the Contractor or any person for whom the Employer or the Contractor is responsible, and failing to commence or to carry out its work in due time provided that the Contractor has taken all practicable measures to cause it to commence, carry out and complete its work on time (法定承辦機構或公用事業公司與發包方、承包商或他們所應負責的任何人士沒有合同關係的情況下履行其法定工作,但未能按時開工或進行它的工作,而承包商已採取使它能按時開始、進行及完成它的工作的一切可行的措施) Yes No
Q A failure of the Employer to supply or supply on time materials that he agreed to provide for the Works (發包方未能供應或未能按時供應他同意供應給本工程用的物料) Yes Yes
R A delay by a Government department in giving an approval or a consent which is not the Contractor’s responsibility to obtain (政府部門延誤發出不屬於承包商應負責取得的批准或許可) Yes Yes
S An unreasonable delay by a Government department in giving an approval or a consent which is the Contractor’s responsibility to obtain, provided that any disallowance of approval or consent attributable to the Contractor’s lack of adequate submission shall not be considered as unreasonable (政府部門不合理地延誤發出屬於承包商應負責取得的批准或許可,但如果拒絕發出該批准或許可乃由於承包商未有提交足夠的資料則不能視為不合理) Yes No
T A special circumstance considered by the Contract Administrator as sufficient grounds to fairly entitle the Contractor to an extension of time (合同監理認為有充份的理由合理地給予承包商延長工期的特殊情況) Yes No
U An act of prevention, a breach of contract or other default by the Employer or any person for whom the Employer is responsible (發包方或發包方應負責的任何人士造成的妨礙行為、違約行為或其他過失) Yes Yes

Separate Contractor (其他承包商) - This term has been defined, like SFBC 2005/2006, to exclude any statutory undertaker or utility company carrying out work in pursuance of its statutory obligations and not having a contractual relationship with the Employer, the Contractor or any person for whom the Employer or the Contractor is responsible. Pre-2005/2006 SFBC do not have such distinction.

Substantial Completion Certificate (充份竣工證書) - This term has been used, like SFBC 2005/2006, to replace “Practical Completion Certificate” in pre-2005/2006 SFBC, but with no intentional change of meaning. Each Works Section is to have its own Substantial Completion Certificate and Defects Rectification Certificate.

2. Site (工地)

Provision of Site (工地的提供) - This is by way of granting access to the site rather than giving exclusive possession to reflect the usual nature of carrying out the works while the buildings are continued to be occupied and used by owners and tenants. This can be in phases as stipulated in the Particulars of Agreement.

Site access (進入工地) - The Employer is only responsible for providing access to the Site through land or premises which are under his control. Where the Employer is the landlord or the incorporated owners or the Building Manager of the premises in which the Site is situated, any individual units of the premises which are separately owned or rented (such as residential flats, car parking spaces, offices, shops, workshops, stores, and the like) shall be deemed to be under the control of the Employer.

House rules (管理守則) - The Contractor shall comply with the house rules of the Building Manager and pay any deposit temporarily required as security for loss or damage, but any restrictions on access or working hours more stringent than those announced by the Building Manager prior to the award of the Contract and affecting the Works shall be deemed to be a Variation.

Site investigation or condition survey reports (工地勘察及現況勘察報告) - As usual, any site investigation or condition survey reports or other information which may be made available to the Contractor prior to the award of this Contract are given without any warranty on the part of the Employer as to their accuracy or completeness, and they shall be deemed to be supplied for the Contractor's information only. However, it has been clarified that they must be the whole record of such investigation or survey as has been carried out.

3. Works (工程)

Works - As a catch-all definition to avoid the fine argument that the Works are for "build only" not including design, service and maintenance, “the Works” has been defined to include:

  • permanent work (永久工程) required to be carried out and completed by the Contractor under the Contract;
  • temporary work (臨時工程) required for the carrying out and completion of the permanent work;
  • services (服務) required to be carried out and completed by the Contractor under the Contract;
  • materials (物料) supplied by the Employer for incorporation by the Contractor into the Works after they are handed over to the Contractor;
  • design (設計) of any part of the permanent work if this is specified to be part of the Works;
  • service and maintenance (服務及保養) required to be carried out after substantial completion of the Works; and
  • provision of warranties and guarantees (保證及擔保).

The Works exclude:

  • materials supplied by the Employer for incorporation by the Contractor into the Works but only until such time when they are handed over to the Contractor;
  • materials (物料) or workmanship (工藝) or method (方法) or work (工作) which is not in accordance with the Contract; and
  • work or services carried out by the Contractor without authority under the Contract.

Design responsibility – The following have been clarified:

  • design of permanent work – the Employer shall engage the Contract Administrator or other designers to carry out the design work;
  • development of “design intent drawings” (設計意念圖) (declared as such) into detailed design of the components making up the complete system, installation or fitting, basically by way of shop drawings (製配圖) - the Contractor shall be responsible;
  • development of design of schematic and layout drawings (示意及佈置設計圖) of building services installations 機電工程 into shop or installation drawings – the Contractor shall be responsible;
  • design of temporary work – the Contractor shall be responsible; and
  • Contractor’s design to be approved and be fit for the intended purpose (適合意圖達到的目的).

Testing and commissioning (測試及調試) - Before they may be certified as substantially completed, all mechanically, hydraulically, electrically or electronically operated parts (機械、水壓、電力或電子操作的部分) of the Works and any parts of the Works connected by and including pipes, ducts, conduits, trunking, wiring or cables shall be tested and commissioned in accordance with the requirements of this Contract.

Equal and approved (獲准相等) - For a material where the Contractor is permitted to propose “equal and approved” or “approved equal” brands or models, the Contractor may propose a brand or model of the same kind of material equal in performance and quality to that originally specified or proposed in the Contract. Traditionally, such proposal should have no cost effect. However, there have been cases where the standard of performance and quality is not precise enough and the prices of the alternatives apparently meeting the standard are too cheap. On the other hand, it would not be reasonable to accept only more expensive alternatives. It is therefore clarified that no cost reduction shall be required if the alternative brand or model is not cheaper than the cheapest of those originally specified or proposed in this Contract by more than 10%, otherwise a share of the cost saving shall be proposed.

Contractors’ alternative proposals (承包商的另選建議) - For other cases, as usual, the Contractor’s alternative proposals shall not be adopted without the prior written approval by the Contract Administrator. The approval shall have no effect on the Contract Price or the Completion Date unless the effect is specifically stated in the written approval, in which case, the approval shall be deemed to be a Variation instruction. Under no circumstances shall the approval relieve the Contractor of his responsibilities under this Contract.

4. Time

Extension of time (工期延長) - Early and progressive submission of extension of time and delay and disruption monetary claims has been encouraged with time frames specified (as good practice rather than as time limits).

It was noted when drafting the Standard Form that in spite of the usual contract practice of specifying a short period of time after the commencement of a delay or disruption event as the time limit for submitting notices and claims, Contractors are still late in submitting their notices and claims, and Contract Administrators are late in ascertaining the claims pending the Employers’ blessing. It was considered that for maintenance and renovation works, Contractors are less sophisticated, laymen building owners as Employers would want to be consulted before granting time and monetary compensation, and Contract Administrators would want to play safe. Therefore, short time bars were considered to be not practicable nor desirable, a more practical approach has been adopted:

  • A more relaxed time bar with longer time has been specified for the Contractor to submit extension of time and delay and disruption monetary claims:
    • Extension of time claims to be submitted regularly but not later than the Completion Date of the relevant Works Section or its extended completion date previously claimed by the Contractor; and
    • Delay and disruption monetary claims to be submitted regularly but not later than 3 months after the direct loss and/or expense having been incurred, progressive submissions permitted for continuing events.
  • On the other hand, with the relaxed time limit, the Contractor shall bear the consequence of his own non-submission, late submission or insufficient submission of notices or information. The Contract Administrator and the Quantity Surveyor are only obliged to act based on information received without an obligation to demand for further information from the Contractor.

It has been clarified that the Contractor shall continuously use his best endeavours to prevent or mitigate delay or disruption to the progress of the Works however caused, and to prevent the completion of the Works from being delayed or further delayed, but the use of best endeavours by the Contractor shall not require the Contractor to accelerate the carrying out of the Works to recover delay caused by an Excusable Event.

An extension of time is to compensate the working time lost. This means that working days should be suitably converted to calendar days.

When an Excusable Event occurs in the period of delay after the Completion Date but before the substantial completion of a Works Section, extension of time shall still be granted but only for the net duration of the delay rather than granting the gross period until the end of the delay.

Extension of time granted shall not be reduced unless it has been based upon incorrect information provided by the Contractor.

Determining time and cost effects (工期及造價影響的確定) - To remedy the situation of some contracts of specifying a time limit for the Contractor to submit notices and claims without at the same time specifying a time limit for the Contractor Administrator and the Quantity Surveyor to respond, the Standard Form requires the Contract Administrator and the Quantity Surveyor respectively to respond within 14 days after the receipt of an extension of time notice or monetary claim, while subsequent review is permitted in light of further evidence at any time before issuing the Final Certificate.

Handover after completion (竣工後交付) - 14 days have been specified for the Contractor to hand over a Works Section after substantial completion and 7 days for demobilizing from the residual retained areas.

5. Contract Basis (合同基礎)

Interpretation of Contract Documents (合同文件的釋義) - The order of precedence of the Contract Documents has been clarified, with wider coverage, as:

  • Contract Agreement (合同協議);
  • Tender Correspondence (投標來往函件);
  • Form of Tender or the Tender (投標表格或投標書);
  • Special Contract Conditions (特殊合同條款);
  • Schedule of Works (工程項目清單);
  • the Preliminaries section of the Contract Specification (合同規範內的開辦經營要求部分);
  • Contract Conditions (合同條款);
  • Contract Drawings (合同圖紙); and
  • Sections of the Contract Specification other than the Preliminaries section (合同規範內的開辦經營要求部分之外的其他部分) (i.e. Technical Specification).

Documents issued later in time shall take precedence, particular specification shall take precedence over general specification, detailed drawings shall take precedence over general drawings, specification and drawings specially prepared for the Works shall take precedence over standard specification and drawings.

6. Prices (價款)

Types of contract (合同類型) - To offer greater flexibility and reduce the need to amend a standard form suiting one type to suit another type, optional clauses have been included to deal with the three different common types of contract, which may be selected in the Particulars of Agreement:

  • Lump Sum Contract (總價承包合同)
    • basically quantities are to be estimated by the Tenderers at their own risks;
    • there is also a clause dealing with cases where the quantities are at the Employer’s risks; however, if full scale Bills of Quantities are to be used, this clause may need special conditions to make it more comprehensive;
  • Remeasurement Contract (重新計量合同); and
  • Rates Only Contract (純單價承包合同).

Measurement and pricing clauses - Clauses have also been introduced to deal with:

  • Arithmetical errors (算術錯誤);
  • Provisional quantities (暫定數量);
  • Method of measurement (工程量計算規則);
  • Provisional sums (暫定款); and
  • Prime cost rates (暫定成本單價).

It may be argued that these clauses should, as usual practice, be included in the Conditions of Tendering, Preliminaries or Preambles. Because of their common nature, these matters are usually encountered, but there are no standard Conditions of Tendering, Preliminaries or Preambles amongst building professionals. This makes the wording of the clauses and therefore interpretations vary amongst building professionals. It was therefore considered more appropriate to deal with these common matters in the Standard Form.

Valuation (計價)- The valuation rules for valuation of Variations and of work carried out by the Contractor covered by a provisional sum are basically the same as those used in the traditional forms of contracts, being Contract Rates ==> pro-rata rates ==> star rates ==> daywork rates, but with the following enhancements:

  • The terms “pro-rata rates” (換算單價) and “star rates” (打星單價) have been formally used. (While they have been used in everyday work, they have not been formally used in the traditional forms of contracts.)
  • It has been clarified that a pro-rata rate shall use the Contract Rates for comparable items as the base with adjustment for the net difference in costs due to the difference in character or conditions plus the same percentage for profits and overheads as used in the relevant Contract Rates.
  • It has also been clarified that a star rate shall be derived from market rates including rates used on other comparable projects fairly adjusted to take into consideration the nature and conditions under which the work is carried out under this Contract or from first principle based on actual costs plus the percentage for profits and overheads generally used in the Contract Rates.
  • If there is any disagreement as to the percentage for profits and overheads generally used in the Contract Rates, 15% shall be used for mark-up on the costs of direct labour, materials and plant. If the work is sub-contracted, then 10% shall be used for mark-up on the subcontract prices. For the SFBC 2005/2006 or before, 15% is usually taken as a convenient but not mandatory norm for all cases.

Contractor’s claims for extras (承包商索賠) - The usual practice that any changes made to the Contractor’s submissions such as drawings, samples or catalogues in consequence of any comments made by the Contract Administrator shall not be a Variation has been retained, but it has been clarified that if the Contractor disagrees, he shall immediately upon the receipt of the relevant comment or instruction write to the Contract Administrator to seek clarification.

Payment (付款) - The usual payment practice of: Contractor’s payment application ==> Quantity Surveyor’s valuation ==> Contractor Administrator’s certification ==> Contractor’s invoice ==> Employer’s payment, has been retained, with the following specific details:

  • Payment applications are to be submitted at monthly intervals before substantial completion, and at bimonthly intervals thereafter.
  • A Payment Certificate is to be issued within 14 days of receipt of the Contractor’s application.
  • A comprehensive checklist of how to compute the net amount payable has been given.
  • There is a reminder that any advance payment shall be made only after the provision by the Contractor of a surety bond in a form acceptable to the Contract Administrator and of a value not less than the amount of the advance payment.
  • Unlike the SFBC 2005/2006 or before, it is permissible to deduct liquidated damages from the net amount payable.

Final Account (結算) - A comprehensive checklist of how to compute the final Contract Price has been given. The Contractor’s proposed Final Account shall be submitted within 3 months from the completion of the whole of the Works. The whole Final Account shall be agreed as soon as possible not later than 1 month after the issue of the Defects Rectification Certificate. If the Quantity Surveyor considers that he has taken into account all the representation of the Contractor but still fails to obtain the Contractor’s agreement, he may issue a unilateral Final Account to the Contractor and declare it as such.

Final Certificate (最終證書) - The Contract Administrator shall issue the Final Certificate within 14 days after the issue of the Defects Rectification Certificate of the last Works Section or within 14 days after the agreement of the Final Account or after 1 month has lapsed after the issue of the unilateral Final Account, whichever is the later. The Final Certificate is not final in respect of liabilities for any latent defects not discovered at the time of the Final Account, or matters affected by any bribery offence, fraud, dishonesty or fraudulent concealment.

7. Quality (質量)

This Section covers the usual matters like: Quality liability; Materials, workmanship and method to comply with Contract; Approval; Samples; Testing and inspection; Defects liability; and Warranties and guarantees.

Excepted Risks (免責風險) - The Contractor is exempted from loss or damage arising from the Excepted Risks.

Warranties and guarantees (保證及擔保) - Apart from warranties and guarantees specifically required by the Contract, it may be possible that the Contractor’s suppliers and sub-contractors provide standard warranties or guarantees. The Contractor shall assign the benefits of all such warranties or guarantees to the Employer (so far as he is lawfully able to do so). To prevent undue delay in the submission of warranties and guarantees, it has been specified that the submission of all warranties and guarantees satisfactorily in full compliance with the Contract shall be a pre-requisite to the release of one half of the retention fund upon substantial completion of the relevant Works Section.

8. Contractor’s Documents (承包商的文件)

This Section covers the usual matters like: Shop drawings (製配圖), Construction method statement and programme (施工方案及進度計劃), Progress reports (進度報告), and As-built records (竣工記錄).

9. General Obligations (一般責任)

This Section covers the usual matters like: Statutory obligations (法定責任); Intellectual property (知識產權); Assignment (轉讓); Care of the Works (工程的保護); Injury to persons and property and indemnity to Employer (人身及財產的損傷及對發包方的保障); Provision of all things necessary (提供一切必需的); Labour and site management team (人力及現場管理班子); Temporary site facilities (現場臨時設施); Setting out (開線定位); Cleanliness and tidiness (清潔及整齊); Protection (保護); and Visitors (訪客).

It may be argued that some of the clauses under “7. Quality”, “8. Contractor’s Documents”, and “9. General Obligations” should, as usual practice, be included in the Preliminaries. They have been included in the Contract Conditions to reduce the need to draft Preliminaries clauses to cover these usually encountered matters.

Administrative charge (行政費)- A special provision has been introduced to impose a 10% administrative charge on payment of statutory charges on behalf of the defaulting party.

Prevention of bribery offences (防止賄賂罪行) - Clauses on Prevention of Bribery Offences with consequence of determination of the employment of the Contractor have been introduced to stress the importance:

9.13 Prevention of bribery offences

The Contractor shall not offer, give or agree to give to any person any bribe, commission, gift, loan or advantage of any kind as defined in the Prevention of Bribery Ordinance, Cap 201 as an inducement or reward for doing or forbearing to do or for having done or forborne to do any action in relation to the execution of this Contract or any other contract with the Employer, or for showing or forbearing to show favour or disfavour to any person in relation to this Contract or other contract with the Employer. Any commitment of the aforesaid offences by any person with the Contractor’s prior authorization or subsequent acquiescence shall be deemed to be the Contractor’s fault. The Contractor shall take all necessary measures to ensure that his employees, agents, sub-contractors, suppliers, or other persons for whom the Contractor is responsible comply with the foregoing provisions.

11.1 Determination by Employer

11.1.1 The Employer may but not unreasonably or vexatiously by notice by registered post or recorded delivery to the Contractor forthwith determine the employment of the Contractor under this Contract in any one or more of the following events: … (f) the Contractor (or any person for whom the Contractor is responsible with or without the knowledge of the Contractor) is convicted of a bribery offence described in Clause 9.13. …

10. Insurances and Bond (保險及履約保證)

This Section covers Employees’ Compensation Insurance; Contractors' All Risks and Third party liability Insurance; and Surety Bond or cash security.

As compared with SFBC 2005/2006, these clauses have been very much simplified.

Employees’ Compensation Insurance (僱員補償保險) - It is the Contractor’s responsibility to take out Employees’ Compensation Insurance, to follow the statutory requirements.

Contractors’ All Risks and Third Party Liability Insurance (工程一切險及第三者責任險) - Either the Employer or the Contractor may be specified in the Particulars of Agreement to take out the Contractors’ All Risks and Third Party Liability Insurance.

The Building Manager has been specified as one of the “the principals” (委託人).

Use of a company master policy or annual policy is permissible.

Administrative charge - A 15% administrative charge is to be imposed on insurance premium paid on behalf of the defaulting party who fails to insure.

Bond and cash security (履約保證書或押金) - A cash security equal to the amount of the Surety Bond may be withheld temporarily from the Payment Certificate if the Contractor so elects or if the Contractor fails to submit an approved Bond.

Upon the issue of a Defects Rectification Certificate of a Works Section and the settlement of all claims (if any), the amount of the Bond or cash security shall be reduced pro-rata to ratio of the value of that Works Section to the final Contract Price currently estimated. Upon the issue of the Defects Rectification Certificate of the last Works Section and the settlement of all claims (if any), the Bond or the balance of the cash security shall be released to the Contractor without interests.

Pre-2005/2016 SFBC stipulate the release of the Surety Bond upon Practical Completion. SFBC 2005/2006 offer a choice between Substantial Completion and Defects Rectification Certificate.

11. Determination (終止)

This Section covers the determination by the Employer or by the Contractor himself of the Contractor’s employment (僱用).

Apart from the usual grounds for determination, the following grounds for determination by the Employer of the employment of the Contractor have been introduced:

  • the Contractor without reasonable cause fails persistently to rectify defects after substantial completion of the whole of the Works and the Employer pursuant to another clause employs others to rectify the defects for 5 times or more and the total cost of rectifying defects exceeds $100,000;
  • the Contractor without reasonable cause fails to submit evidence of the Employees’ Compensation Insurance and the Contractors’ All Risks and Third Party Liability Insurance in the specified manner within 1 month after the Contract Award Date; and
  • the Contractor (or any person for whom the Contractor is responsible with or without the knowledge of the Contractor) is convicted of a bribery offence.

12. Dispute Resolution (爭議解決)

Like SFBC 2005/2016, the dispute resolution procedures are:

  • Reference to Designated Representatives (提交指派的代表解決);
  • Reference to Mediation (提交調解解決); and
  • Reference to Arbitration (提交仲裁解決).

Pre-2005/2016 SFBC 2005/2016 only provides for arbitration.

13. Amendments

The following amendments in {} are recommended:

4.5 Notices and claims

4.5.4 In any case, the notice under Clause 4.5.1 and the updated notices under Clause 4.5.2 shall not be submitted later than the Completion Date of the relevant Works Section or its extended completion date previously claimed by the Contractor, {whichever is the later,} and the Contractor’s monetary claim under Clause 4.5.3 shall not be submitted later than 3 months after the direct loss and/or expense having been incurred, progressive submission permitted.

在任何情況下,第4.5.1條要求的通知及第4.5.2條要求的更新通知不能遲於有關的工程分部的應竣工日或承包商之前申請延展的竣工日提交,{以較遲者為準,}而承包商按第4.5.3條提交的經濟索賠不能遲於直接損失及/或支出發生後3個月提交,漸進式提交是容許的。

7.7 Warranties and guarantees

7.7.2 If the Contractor has any suppliers’ and sub-contractors’ warranties or guarantees for materials or work required by this Contract, he shall assign the benefits of all such warranties or guarantees to the Employer (so far as he is lawfully able to do so){ the benefits of all such warranties or guarantees}.

如果承包商得到供應商及分包商對本合同所需的物料或工作提供保證或擔保,在法律容許的範圍內,他須向發包方轉讓所有該等保證或擔保的權益。

11.2 Determination by Contractor

11.2.1(b) the Employer interferes with or obstructs the issue of any certificate due under this Contract;
發包方干擾或{}礙按本合同應發證書的發出;

12.4 Reference to arbitration

12.4.3 The arbitration shall be a domestic arbitration conducted in accordance with the Arbitration Ordinance (Chapter 609, Laws of Hong Kong) {with all the provisions in Schedule 2 thereto applicable} and, unless otherwise agreed by the Contract Parties, with the Domestic Arbitration Rules of the Hong Kong International Arbitration Centre except those provisions in the Rules relating to the appointment of the arbitrator.

仲裁須為本地仲裁,按香港法例第609章《仲裁條例》{(其附表2的所有條文適用)}及,除非合同雙方另有協議,香港國際仲裁中心的本地仲裁規則進行,其中關於委任仲裁員的條款除外。

APPENDIX A - SURETY BOND

For the third signing option:

代表{擔保人承包商}在見證下簽署、蓋章及送達

 

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Standard Form of Contract For Maintenance and Renovation Works (removed)

Standard Form of Contract For Maintenance and Renovation Works (removed) KCTang

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Standard Form of Contract For Maintenance and Renovation Works - For use in the Hong Kong Special Administrative Region 維修及裝修工程 標準合同 - 用於香港特別行政區

8/7/2021: Full version with commentary removed because of copyright issue.

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NEC 4 ECC Identified Terms and Defined Terms

NEC 4 ECC Identified Terms and Defined Terms KCTang

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Note

20/1/2023: Various forms of Senior Representative added.

8/8/2022: General updating.

18/7/2022: Created.

Identified Terms (terms identified in the Contract Data and shown in italics)

  • access date
  • access dates
  • activity schedule
  • additional conditions of contract
  • Adjudicator
  • Adjudicator nominating body
  • Adjudicator’s
  • arbitration procedure
  • assessment interval
  • beneficiaries
  • beneficiary
  • bill of quantities
  • boundary of the site
  • Client
  • Client’s
  • completion date
  • completion dates
  • condition
  • conditions of contract
  • Contractor
  • Contractor’s
  • Contractor’s share percentages
  • Cost Manager
  • Cost Manager’s
  • currency of the contract
  • defect correction period
  • defects date
  • defects dates
  • delay damages
  • Dispute Avoidance Board nominating body
  • exchange rates
  • fee percentage
  • fee percentages
  • incentive schedule
  • information execution plan
  • interest rate
  • key date
  • key dates
  • key person
  • key persons
  • language of the contract
  • law of the contract
  • method of measurement
  • named supplier
  • named suppliers
  • people rates
  • period for reply
  • project bank
  • Project Manager
  • Project Manager’s
  • Promoter
  • Promoter’s objective
  • retention free
  • retention percentage
  • section 
  • section’s
  • sections
  • sections’
  • Senior Representative
  • Senior Representative's
  • Senior Representatives
  • Senior Representatives’
  • share ranges
  • starting date
  • Subcontractor undertaking to Others
  • Subcontractor undertaking to the Client
  • Supervisor
  • Supervisor’s
  • tribunal
  • undertaking to Others
  • value engineering percentage
  • weather data
  • weather measurements
  • working areas
  • works

(various forms of Senior Representative added, 21/1/2023)

Defined Terms (have capital initials)

  • Accepted Programme
  • Activity Schedule
  • Authorisation
  • Base Date Index
  • Bill of Quantities
  • Budget
  • Completion
  • Completion Date
  • Contract Data
  • Contract Date
  • Core Group
  • Core Group Members
  • Corrupt Act
  • Defect
  • Defects
  • Defects Certificate
  • Defined Cost
  • Disallowed Cost
  • Dispute Avoidance Board
  • Early Warning Register
  • Equipment
  • Fee
  • Insurance Table
  • Joining Deed
  • Key Date
  • Key Performance Indicator
  • Latest Index
  • Materials
  • Named Suppliers
  • Others
  • Own Contract
  • Parties
  • Partnering Information
  • Partners
  • People Rates
  • Plant
  • Price Adjustment Factor
  • Price for Work Done to Date
  • Prices
  • Pricing Information
  • Project Cost
  • Provide the Works
  • Schedule of Partners
  • Scope
  • Short Schedule of Cost Components
  • Site
  • Site Information
  • Specialist Subcontractor
  • Stage One
  • Stage Two
  • Subcontractor
  • Supplier
  • Total of the Prices
  • Trust Deed
  • Working Areas

Terms to be converted from GCC or SMM4 to NEC4

GCC or SMM4 NEC4
Architect (as Supervising Officer) Project Manager
Bill of Quantities bill of quantities
Bills of Quantities bill of quantities
claim for additional payment notification of compensation event
claim for extension of time notification of compensation event
claim for extension of time and/or additional payment notification of compensation event
Conditions of Contract conditions of contract
condition (working condition) condition
Cost (in GCC) Defined Cost (many different names)
date for commencement of the Contract Contract Date
date for commencement of the Works starting date
date for possession of the Site access date
date of acceptance of the Tender Contract Date
date of the award of the Contract Contract Date
date of the letter of acceptance Contract Date
Defects Liability Period The period between Completion and the defects date
Employer Client (Employer in NEC3)
equipment (for incorporation into the Works) Plant
expiry of the Maintenance Period defects date
extension of time change to the Completion Date
Final Contract Sum final total of the Prices
GCC Clause 16 Programme Accepted Programme
Period of Maintenance The period between Completion and the defects date
plant (construction plant) Equipment
Price Fluctuation Factor Price Adjustment Factor
Schedule of Rates bill of quantities
Supervising Officer Project Manager
Supervising Officer's Representative Supervisor
Surveyor (Quantity Surveyor) Cost Manager
the Contractor the Contractor
the date for completion of the Works completion date
the extended date for completion of the Works Completion Date
the Main Contract the contract
the Works the works

 

(conversions from Architect, Employer, Supervising Officer, Supervising Officer's Representative, Surveyor and Contractor added, 8/8/2022)

 

A global search and replace action may cause errors with these terms

Terms which are used both as identified terms and defined terms

  • activity schedule vs Activity Schedule
  • bill of quantities vs Bill of Quantities
  • completion date vs Completion Date
  • key date vs Key Date
  • named suppliers vs Named Suppliers
  • Dispute Avoidance Board Nominating Body vs Dispute Avoidance Board
  • people rates vs People Rates
  • working areas vs Working Areas

Previous terms which may mix up with or form part of other expressions

  • Architect as in Architectural Services Department
  • Contractor as in Sub-contractor
  • condition
  • cost
  • section
  • Surveyor
  • tribunal
  • works
  • (Adding "the " before the word or a space at the end may help in some cases.)

(added, 8/8/2022)

Identified terms which may mix up with or form part of other expressions

  • (when changing to italics)
  • contract
  • Contractor
  • condition
  • section 
  • tribunal
  • works

(note in brackets and Contractor added, 8/8/2022)

Defined terms which may mix up with or form part of other expressions

  • (when capitalising the first letter)
  • Authorisation
  • Budget
  • Completion
  • Defect
  • Defects
  • Equipment
  • Fee
  • Materials
  • Others
  • Parties
  • Plant
  • Prices
  • Scope
  • Site
  • Supplier

(note in brackets added, 8/8/2022)

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NEC 4 ECC Hong Kong Edition July 2023 - Main Option Clauses

NEC 4 ECC Hong Kong Edition July 2023 - Main Option Clauses KCTang

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Note

Created: 18/3/2024

Intro

NEC 4 ECC means NEC 4 Engineering and Construction Contract published by Thomas Telford Ltd who owns the copyright.

Retabulated to enable easier comparison

OPTION A: PRICED CONTRACT WITH ACTIVITY SCHEDULE
OPTION B: PRICED CONTRACT WITH BILL OF QUANTITIES
OPTION C: TARGET CONTRACT WITH ACTIVITY SCHEDULE
OPTION D: TARGET CONTRACT WITH BILL OF QUANTITIES
OPTION E: COST REIMBURSABLE CONTRACT
OPTION F: MANAGEMENT CONTRACT

Bullet "o" below is "-" in NEC. 

Option Clause Text
            11 Identified and defined terms
A   C       11.2 (21) [HK Edition: (25)] The Activity Schedule is the activity schedule unless later changed in accordance with these conditions of contract.
  B   D     11.2 (22) [HK Edition: (26)] The Bill of Quantities is the bill of quantities unless later changed in accordance with these conditions of contract.
               
A B         11.2 (23) [HK Edition: (27)] Defined Cost is the cost of the components in the Short Schedule of Cost Components.
    C D E   11.2 (24) [HK Edition: (28)] Defined Costis the cost of the components in the Schedule of Cost Components less Disallowed Cost.
          F 11.2

(25) [HK Edition: (29)] Defined Costis

  • the amount of payments due to Subcontractors for work which is subcontracted without taking account of amounts paid to or retained from the Subcontractor by the Contractor which would result in the Client paying or retaining the amount twice and
  • the prices for work done by the Contractor

less Disallowed Cost.

               
    C D E   11.2

(26) [HK Edition: (30)] Disallowed Cost is cost which

  • is not justified by the Contractor's accounts and records,
  • should not have been paid to a Subcontractor or supplier in accordance with its contract,
  • was incurred only because the Contractor did not
    • follow an acceptance or procurement procedure stated in the Scope [HK Edition: contract],
    • give an early warning which the contract required it to give or
    • give notification to the Project Manager of the preparation for and conduct of an adjudication or proceedings of a tribunal [HK Edition: an arbitration or other tribunal] between the Contractor and a Subcontractor or supplier

and the cost of

  • correcting Defects after Completion,
  • correcting Defects caused by the Contractor not complying with a constraint on how it is to Provide the Works stated in the Scope,
  • Plant and Materials not used to Provide the Works (after allowing for reasonable wastage) unless resulting from a change to the Scope,
  • resources not used to Provide the Works (after allowing for reasonable availability and utilisation) or not taken away from the Working Areas when the Project Manager requested and    
  • preparation for and conduct of an adjudication or proceedings of a tribunal [HK Edition: an arbitration or other tribunal] between the Parties.
          F 11.2

(27) [HK Edition: (31)] Disallowed Cost is cost which

  • is not justified by the Contractor's accounts and records,
  • should not have been paid to a Subcontractor or supplier in accordance with its contract,
  • is a payment to a Subcontractor for
  • work which the Contract Data states that the Contractor will do itself or
  • the Contractor's management,
  • was incurred only because the Contractor did not
  • follow an acceptance or procurement procedure stated in the contract,
  • give an early warning which the contract required it to give or
  • give notification to the Project Manager of the preparation for and conduct of an adjudication or proceedings of an arbitration or other tribunal between the Contractor and a Subcontractor or supplier

and the cost of preparation for and conduct of an adjudication or proceedings of an arbitration or other tribunal between the Parties.

               
A           11.2 (28) [HK Edition: Not used] The People Rates are the people rates unless later changed in accordance with the contract.
               
A           11.2

(29) [HK Edition: (32)] The Price for Work Done to Date is the total of the Prices for

  • each group of completed activities and
  • each completed activity which is not in a group.

A completed activity is one without notified Defects the correction of which will delay following work.

  B         11.2

(30) [HK Edition: (33)] The Price for Work Done to Date is the total of

  • the quantity of the work which the Contractor has completed for each item in the Bill of Quantities multiplied by the rate and
  • a proportion of each lump sum which is the proportion of the work covered by the item which the Contractor has completed.

Completed work is work which is without notified Defects the correction of which will delay following work.

    C D E F 11.2 (31) [HK Edition: (34)] The Price for Work Done to Date is the total Defined Cost which the Project Manager forecasts will have been paid by the Contractor before [HK Edition: one week after] the next assessment date plus the Fee.
               
A   C       11.2 (32) [HK Edition: (35)] The Prices are the lump sum Prices for each of the activities on the Activity Schedule unless later changed in accordance with the contract.
  B   D     11.2 (33) [HK Edition: (36)] The Prices are the lump sums and the amounts obtained by multiplying the rates by the quantities for the items in the Bill of Quantities.
        E F 11.2 (34) [HK Edition: (37)] The Prices are the forecast of the total Defined Cost for the whole of the works plus the Fee.
               
      D     11.2

(35) [HK Edition: (38)] The Total of the Prices is the total of

  • the quantity of the work which the Contractor has completed for each item in the Bill of Quantities multiplied by the rate and
  • a proportion of each lump sum which is the proportion of the work covered by the item which the Contractor has completed.

Completed work is work which is without notified Defects the correction of which will delay following work.

               
            20 Providing the works
          F 20.2 The Contractor manages the Contractor's design, the provision of Site services and the construction and installation of the works. The Contractor subcontracts the Contractor’s design, the provision of Site services and the construction and installation of the works except work which the Contract Data states that it will do.
    C D E F 20.3 The Contractor advises the Project Manager on the practical implications of the design of the works and on subcontracting arrangements.
    C D E F 20.4 The Contractor prepares forecasts of the total Defined Cost for the whole of the works in consultation with the Project Manager and submits them to the Project Manager. Forecasts are prepared at the intervals stated in the Contract Data from the starting date until Completion of the whole of the works. An explanation of the changes made since the previous forecast is submitted with each forecast.
               
            26 Subcontracting
    C D E F 26.4 The Contractor submits the pricing information in the proposed subcontract documents for each subcontract to the Project Manager unless the Project Manager has agreed that no submission is required.
               
            31 The programme 
A           31.4 The Contractor provides information which shows how each activity on the Activity Schedule relates to the operations on each programme submitted for acceptance.
               
            41 Tests and inspections
    C D E   41.7 When the Project Manager assesses the cost incurred by the Client in repeating a test or inspection after a Defect is found, the Project Manager does not include the Contractor's cost of carrying out the repeat test or inspection.
               
            50 Assessing the amount due
    C D     50.7 Payments of Defined Cost made by the Contractor in a currency other than the currency of the contract are included in the amount due as payments to be made to it in the same currency. Such payments are converted to the currency of the contract in order to calculate the Fee and any Contractor's share using the exchange rates.
        E F 50.8 Payments of Defined Cost made by the Contractor in a currency other than the currency of the contract are included in the amount due as payments to be made to it in the same currency. Such payments are converted to the currency of the contract in order to calculate the Fee using the exchange rates.
    C D E F 50.9

The Contractor notifies the Project Manager when the Defined Cost for a part of the works has been finalised, and makes available for inspection the records necessary to demonstrate that it has been correctly assessed. The Project Manager reviews the records made available, and no later than thirteen weeks after the Contractor's notification

  • accepts that part of Defined Cost as correct,
  • notifies the Contractor that further records are needed or
  • notifies the Contractor of errors in its assessment.

The Contractor provides any further records requested or advises the correction of the errors in its assessment within four weeks of the Project Manager’s notification. The Project Manager reviews the records provided, and within four weeks

  • accepts that part of Defined Cost as correct or
  • notifies the Contractor of the correct assessment of that part of Defined Cost.

If the Project Manager does not notify a decision on that part of Defined Cost within the time stated, the Contractor’s assessment is treated as correct.

               
            52 Defined Cost
    C D E   52.2

The Contractor keeps these records

  • accounts of payments of Defined Cost,
  • proof that the payments have been made,
  • communications about and assessments of compensation events for  Subcontractors and
  • other records as stated in the Scope.
          F 52.3

The Contractor keeps these records

  • accounts of payments made to Subcontractors,
  • proof that the payments have been made,
  • communications about and assessments of compensation events for  Subcontractors and
  • other records as stated in the Scope.
    C D E F 52.4 The Contractor allows the Project Manager to inspect at any time within working hours the accounts and records which it is required to keep.
               
            54 The Contractor’s share
      C     54.1 The Project Manager assesses the Contractor's share of the difference between the total of the Prices and the Price for Work Done to Date. The difference is divided into increments falling within each of the share ranges. The limits of a share range are the Price for Work Done to Date divided by the total of the Prices, expressed as a percentage. The Contractor's share equals the sum of the products of the increment within each share range and the corresponding Contractor’s share percentage.
    C       54.2 If the Price for Work Done to Date is less than the total of the Prices, the Contractor is paid its share of the saving. If the Price for Work Done to Date is greater than the total of the Prices, the Contractor pays its share of the excess.
    C       54.3 The Project Manager makes a preliminary assessment of the Contractor's share at Completion of the whole of the works using forecasts of the final Price for Work Done to Date and the final total of the Prices. This share is included in the amount due following Completion of the whole of the works.
    C       54.4 The Project Manager makes a final assessment of the Contractor's share using the final Price for Work Done to Date and the final total of the Prices. This share is included in the final amount due.
      D     54.5 The Project Manager assesses the Contractor's share of the difference between the Total of the Prices and the Price for Work Done to Date. The difference is divided into increments falling within each of the share ranges. The limits of a share range are the Price for Work Done to Date divided by the Total of the Prices, expressed as a percentage. The Contractor's share equals the sum of the products of the increment within each share range and the corresponding Contractor’s share percentage.
      D     54.6 If the Price for Work Done to Date is less than the Total of the Prices, the Contractor is paid its share of the saving. If the Price for Work Done to Date is greater than the Total of the Prices, the Contractor pays its share of the excess.
      D     54.7 The Project Manager makes a preliminary assessment of the Contractor's share at Completion of the whole of the works using forecasts of the final Price for Work Done to Date and the final Total of the Prices. This share is included in the amount due following Completion of the whole of the works.
      D     54.8 The Project Manager makes a final assessment of the Contractor's share using the final Price for Work Done to Date and the final Total of the Prices. This share is included in the final amount due.
               
            55 The Activity Schedule
A           55.1 Information in the Activity Schedule is not Scope or Site Information. If the activities on the Activity Schedule do not relate to the Scope, the Contractor corrects the Activity Schedule.
    C       55.2 Information in the Activity Schedule is not Scope or Site Information.
A           55.3

If the Contractor

  • changes a planned method of working at its discretion so that the activities on the Activity Schedule do not relate to the operations on the Accepted Programme or
  • corrects the Activity Schedule so that the activities on the Activity Schedule relate to the Scope

the Contractor submits a revision of the Activity Schedule to the Project Manager for acceptance.

A           55.4

A reason for not accepting a revision of the Activity Schedule is that

  • it does not relate to the operations on the Accepted Programme,
  • any changed Prices are not reasonably distributed between the activities which are not completed or
  • the total of the Prices is changed.
               
            56 The Bill of Quantities
    B   D   56.1 Information in the Bill of Quantities is not Scope or Site Information.
               
            60 Compensation events
  B   D     60.4

A difference between the final total quantity of work done and the quantity stated for an item in the Bill of Quantities is a compensation event if

  • the difference does not result from a change to the Scope,
  • the difference causes the Defined Cost per unit of quantity to change and
  • the rate in the Bill of Quantities for the item multiplied by the final total quantity of work done is more than [HK Edition: the greater of]
    • 0.5% of the total of the Prices at the Contract Date [HK Edition: or
    • the compensation amount]

If the Defined Cost per unit of quantity is reduced, the affected rate is reduced.

  B   D     60.5 A difference between the final total quantity of work done and the quantity for an item stated in the Bill of Quantities which delays Completion or the meeting of the Condition stated for a Key Date is a compensation event.
  B   D     60.6

The Project Manager gives an instruction to correct a mistake in the Bill of Quantities which is

  • a departure from the rules for item descriptions or division of the work into items in the method of measurement or
  • due to an ambiguity or inconsistency.

Each such correction is a compensation event which may lead to reduced Prices.

  B   D     60.7 In assessing a compensation event which results from a correction of an inconsistency between the Bill of Quantities and another document, the Contractor is assumed to have taken the Bill of Quantities as correct.
               
            63 Assessing compensation events
A B         63.12 If the effect of a compensation event is to reduce the total Defined Cost and the event is a change to the Scope provided by the Client, which the Contractor proposed and the Project Manager accepted, the Prices are reduced by an amount calculated by multiplying the assessed effect of the compensation event by the value engineering percentage.
    C D     63.13 If the effect of a compensation event is to reduce the total Defined Cost and the event is a change to the Scope provided by the Client, which the Contractor proposed and the Project Manager accepted, the Prices are not reduced.
A   C       63.14 Assessments for changed Prices for compensation events are in the form of changes to the Activity Schedule.
  B   D     63.15

Assessments for changed Prices for compensation events are in the form of changes to the Bill of Quantities.

For the whole or a part of a compensation event for work not yet done and for which there is an item in the Bill of Quantities, the changes are

  • a changed rate,
  • a changed quantity or
  • a changed lump sum.

For the whole or a part of a compensation event for work not yet done and for which there is no item in the Bill of Quantities, the change is a new priced item which, unless the Project Manager and the Contractor agree otherwise, is compiled in accordance with the method of measurement.

For the whole or a part of a compensation event for work already done, the change is a new lump sum item.

A B         63.16 [HK Edition: Not used] If, when assessing a compensation event the People Rates do not include a rate for a category of person required, the Project Manager and Contractor may agree a new rate. If they do not agree the Project Manager assesses the rate based on the People Rates. The agreed or assessed rate becomes the People Rate for that category of person.
          F 63.17 [HK Edition: 63.16] If work which the Contractor is to do is affected by a compensation event, the Project Manager and the Contractor agree the change to the price for the work and any change to the Completion Date and Key Dates. If they do not agree, the Project Manager decides the change.
               
            93 Payment on termination
A           93.3 The amount due on termination is assessed without taking grouping of activities into account.
      C     93.4

If there is a termination, the Project Manager assesses the Contractor's share after certifying termination. The assessment uses as the Price for Work Done to Date the total of the Defined Cost which the Contractor has paid and which it is committed to pay for work done before termination, and uses as the total of the Prices

  • the lump sum price for each activity which has been completed and
  • a proportion of the lump sum price for each incomplete activity which is the proportion of the work in the activity which has been completed.
      D     93.5 If there is a termination, the Project Manager assesses the Contractor's share after certifying termination. The assessment uses, as the  Price for Work Done to Date, the total of the Defined Cost which the Contractor has paid and which it is committed to pay for work done before termination.
    C D     93.6 The Project Manager’s assessment of the Contractor's share is added to the amount due to the Contractor on termination if there has been a saving or deducted if there has been an excess.

 

End of Page

NEC4 ECC (Short) Schedule of Cost Components

NEC4 ECC (Short) Schedule of Cost Components KCTang

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Note

21/3/2024: Moved out from Demarcation between Costs and Fee.

4/3/2024: NEC Schedules changed to table form.

29/1/2024: Created under "Demarcation between Costs and Fee".

Tabulated

Schedule of Cost Components

This schedule is part of these conditions of contract only when Option C, D or E is used. An amount is included

•       only in one cost component and

•       only if it is incurred in order to Provide the Works.

Short Schedule of Cost Components

This schedule is part of these conditions of contract only when Option A or B is used. An amount is included

•     only in one cost component and

•     only if it is incurred in order to Provide the Works.

People

1     The following components of the cost of

•     people who are employed by the Contractor and whose normal place of working is within the Working Areas,

•     people who are employed by the Contractor and whose normal place of working is not within the Working Areas but who are working in the Working Areas, proportionate to the time they spend working in the Working Areas and

•     the people listed in Contract Data who are employed by the Contractor, whose normal place of working is not within the Working Areas and who are working outside of the Working Areas other than on manufacture and fabrication and design.

If the Project Manager agrees, additional people may be assessed as if they were listed in the Contract Data.

People

1     The following components of the cost of

•     people who are directly employed by the Contractor and whose normal place of working is within the Working Areas,

•     people who are directly employed by the Contractor and whose normal place of working is not within the Working Areas but who are working in the Working Areas, proportionate to the time they spend working in the Working Areas and

•     people who are not directly employed by the Contractor but are paid for by it according to the time worked while they are within the Working Areas.

11     For people who are directly employed by the Contractor, wages, salaries and amounts paid by the Contractor for people paid according to the time worked on the contract.

11     Amounts paid by the Contractor including those for meeting the requirements of the law but excluding the Contractor’s mandatory contribution

•     under the Mandatory Provident Fund Schemes Ordinance (Cap. 485) and 

•     under the Occupational Retirement Schemes Ordinance (Cap. 426). 

12     For people who are directly employed by the Contractor, payments related to work on the contract and made to people for

(a)     bonuses and incentives

(b)     overtime

(c)     working in special circumstances

(d)     special allowances

(e)     absence due to sickness and holidays

(f)     severance.

 

13     For people who are directly employed by the Contractor, payments made in relation to people in accordance with their employment contract for

(a)     travel

(b)     subsistence and lodging

(c)     relocation

(d)     medical examinations

(e)     passports and visas

(f)     travel insurance

(g)     items (a) to (f) for dependants

(h)     protective clothing

(i)     contributions, levies or taxes imposed by law but excluding the Contractor's mandatory contribution under the Mandatory Provident Fund Schemes Ordinance (Cap. 485) and contribution under the Occupational Retirement Schemes Ordinance (Cap. 426)

(j)     life assurance

(k)     death benefit

(l)     occupational accident benefits

(m)     medical aid and health insurance

(n)     a vehicle

(o)     safety training.

 

14     For people who are not directly employed by the Contractor but are paid for by the Contractor according to the time they work, the amounts paid by the Contractor.

 

Equipment

2     The following components of the cost of Equipment which is used within the Working Areas.

Equipment

2     The following components of the cost of Equipment which is used within the Working Areas.

21     Payments for the hire or rent of Equipment not owned by

•     the Contractor,

•     the Contractor's ultimate holding company or

•     a company with the same ultimate holding company

at the hire or rental rate multiplied by the time for which the Equipment is required.

21     Amounts for Equipment at competitively tendered or open market rates, multiplied by the time for which the Equipment is required. 

 

 

 

22     Payments for Equipment which is not listed in the Contract Data but is

•     owned by the Contractor,

•     purchased by the Contractor under a hire purchase or lease agreement or

•     hired by the Contractor from the Contractor's ultimate holding company or from a company with the same ultimate holding company

at open market rates, multiplied by the time for which the Equipment is required.

 

23     Payments for Equipment purchased for work included in the contract listed with a time-related on cost charge, in the Contract Data, of

•     the change in value over the period for which the Equipment is required and

•     the time-related on cost charge stated in the Contract Data for the period for which the Equipment is required.

The change in value is the difference between the purchase price and either the sale price or the open market sale price at the end of the period for which the Equipment is required. Interim payments of the change in value are made at each assessment date. A final payment is made in the next assessment after the change in value has been determined.

If the Project Manager agrees, an additional item of Equipment may be assessed as if it had been listed in the Contract Data.

 

24     Payments for the purchase price of Equipment which is consumed.

 

25     Unless included in the hire or rental rates, payments for

•     transporting Equipment to and from the Working Areas other than for repair and maintenance,

•     erecting and dismantling Equipment and

•     constructing, fabricating or modifying Equipment.

22     Unless included in the competitively tendered or open market rates under item 21, payments for

•     transporting Equipment to and from the Working Areas other than for repair and maintenance,

•     erecting and dismantling Equipment,

•     constructing, fabricating or modifying Equipment, 

•     the purchase price of Equipment which is consumed. 

26     Payments for purchase of materials used to construct or fabricate Equipment.

 

27     Unless included in the hire rates, the cost of operatives is included in the cost of people.

23     Unless included in the competitively tendered or open market rates under item 21, the cost of operatives is included in the cost of people.

Plant and Materials

3     The following components of the cost of Plant and Materials.`

Plant and Materials

3     The following components of the cost of Plant and Materials.

31     Payments for

•     purchasing Plant and Materials,

•     delivery to and removal from the Working Areas,

•     providing and removing packaging and

•     samples and tests.

31     Payments for

•     purchasing Plant and Materials,

•     delivery to and removal from the Working Areas,

•     providing and removing packaging and

•     samples and tests.

32     Cost is credited with payments received for disposal of Plant and Materials unless the cost is disallowed.

32     Cost is credited with payments received for disposal of Plant and Materials unless the cost is disallowed.

Subcontractors

4     The following components of the cost of Subcontractors.

Subcontractors

4     The following components of the cost of Subcontractors.

41     Payments to Subcontractors for work which is subcontracted without taking into account any amounts paid to or retained from the Subcontractor by the Contractor, which would result in the Client paying or retaining the amount twice.

41     Payments to Subcontractors for work which is subcontracted.

Charges

5     The following components of the cost of

•     charges paid or received by the Contractor and

•     providing accommodation and transport for the Project Manager and Supervisor

Charges

5     The following components of the cost of

•     charges paid or received by the Contractor and 

•     providing accommodation and transport for the Project Manager and Supervisor

51     Payments for the provision and use in the Working Areas of

•     water,

•     gas,

•     electricity,

•     telephone and

•     internet.

51     Payments for the provision and use in the Working Areas of

•     water,

•     gas,

•     electricity,

•     telephone and

•     internet.

52     Payments to public authorities and other properly constituted authorities of charges which they are authorised to make in respect of the works, but excluding the Contractor's payment of levies to 

•     the Pneumoconiosis Compensation Fund Board under the Pneumoconiosis and Mesothelioma (Compensation) Ordinance (Cap. 360) and

•     the Construction Industry Council under the Construction Workers Registration Ordinance (Cap. 583) and Construction Industry Council Ordinance (Cap. 587). 

52     Payments to public authorities and other properly constituted authorities of charges which they are authorised to make in respect of the works, but excluding the Contractor’s payment of levies to 

•     the Pneumoconiosis Compensation Fund Board under the Pneumoconiosis and Mesothelioma (Compensation) Ordinance (Cap. 360) and 

•     the Construction Industry Council under the Construction Workers Registration Ordinance (Cap. 583) and Construction Industry Council Ordinance (Cap. 587).

53     Payments for

(a)     cancellation charges arising from a compensation event

(b)     buying or leasing land or buildings within the Working Areas

(c)     compensation for loss of crops or buildings

(d)     royalties

(e)     inspection certificates

(f)     charges for access to the Working Areas

(g)     facilities for visits to the Working Areas by Others

(h)     consumables and equipment provided by the Contractor for the Project Manager’s and Supervisor’s offices

53     Payments for

(a)     cancellation charges arising from a compensation event

(b)     buying or leasing land or buildings within the Working Areas

(c)     compensation for loss of crops or buildings

(d)     royalties

(e)     inspection certificates

(f)     charges for access to the Working Areas

(g)     facilities for visits to the Working Areas by Others

(h)     consumables and equipment provided by the Contractor for the Project Manager’s and Supervisors offices

54     Payments made and received by the Contractor for the removal from Site and disposal or sale of materials from excavation and demolition.

54     Payments made and received by the Contractor for the removal from Site and disposal or sale of materials from excavation and demolition.

55     Amounts paid by the Contractor in providing accommodation and transport for the Project Manager and the Supervisor.

55     Amounts paid by the Contractor in providing accommodation and transport for the Project Manager and the Supervisor.

Manufacture and fabrication

6     The following components of the cost of manufacture and fabrication of Plant and Materials by the Contractor which are

•     wholly or partly designed specifically for the works and

•     manufactured or fabricated outside the Working Areas.

Manufacture and fabrication

6     The following components of the cost of manufacture and fabrication of Plant and Materials by the Contractor which are

•     wholly or partly designed specifically for the works and

•     manufactured or fabricated outside the Working Areas.

61     Amounts paid by the Contractor for the manufacture and fabrication of Plant and Materials outside the Working Areas.

61     Amounts paid by the Contractor for the manufacture and fabrication of Plant and Materials outside the Working Areas.

Design

7     The following components of the cost of design of the works and Equipment done outside the Working Areas.

Design

7     The following components of the cost of design of the works and Equipment done outside the Working Areas.

71     Amounts paid by the Contractor for design of the works and Equipment outside the Working Areas.

71     Amounts paid by the Contractor for design of the works and Equipment outside the Working Areas.

72     The cost of travel to and from the Working Areas for the categories of design people listed in the Contract Data.

72     The cost of travel to and from the Working Areas for the categories of design people listed in the Contract Data.

Insurance

8     The following are deducted from cost

•     the cost of events for which the contract requires the Contractor to insure and

•     other costs paid to the Contractor by insurers.

Insurance

8     The following are deducted from cost

•     the cost of events for which the contract requires the Contractor to insure and

•     other costs paid to the Contractor by insurers.

Insurance premium

9      The following components of the cost of insurance.

Insurance premium

9     The following components of the cost of insurance. 

91      The amounts paid for each insurance stated in the insurance table.

91     The amount paid for each insurance stated in the insurance table.

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Tender Documentation 編寫招標文件

Tender Documentation 編寫招標文件 KCTang

Overview 概論

Overview 概論 KCTang

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Note

  • 9/1/2022: Revised. Punctuation style changed.
  • 16/3/2020: Revised.
  • 20/12/2014: Moved from wiki.

Intro

  • Quantity Surveyors play key roles in tender documentation.

Terminology

  1. “the Works” (with capitalized “W” and “s”) – the whole of all work items under a construction contract.
  2. work” – an item of work or service under a construction contract.
  3. “the Drawings” and “the Specification” (without “s”) are used in the usual Standard Forms of Contract.
  4. "Bills of Quantities" and "Schedule of Quantities and Rates" (previously "Schedule of Rates") are used in the Private Standard Forms of Contract.
  5. Ensure that the terms used must be consistent with those used in the chosen Form of Contract.
  6. See https://kctang.com.hk/web/common-errors-use-english for common errors in use of English.

(4 to 6 added, 9 Jan 2023)

Purpose of tender documentation

  1. Convey clearly to the tenderers what are to be required to be done during tendering and after the award of the contract such that the awarded contract sum is sufficient for the Contractor to finish the job as expected without unexpected claims:
    • complete
    • free of ambiguity
    • free of discrepancy
    • full disclosure and warning of matters which may affect the prices and time.
  2. Provide for a full set of terms and conditions ready for turning into a contract without loose ends.
  3. Afford provisions to deal with changes.

Tender Documents 招標文件

  1. Broader meaning:
    廣義:
    • The complete set of documents issued for tendering, including Tender Drawings.
      用來招標的全套文件,包括招標圖紙.
  2. Narrower meaning:
    狹義:
    • Documents issued for tendering, other than Tender Drawings.
      用來招標的,招標圖紙以外的文件

Generic composition of Tender Documents 招標文件的基本組成部分

  1. Conditions of Tendering / Conditions of Tender / Instructions to Tenderers:
    投標條件 / 投標條件 / 投標須知:
    • Describe rules and procedures to be followed during tendering
      用來說明投標時的規則及程式
    • Not supposed to govern the post contract matters
    • All procedures should have been completed by the time of counter-signing the letter of award
    • Not declared as part of the contract by the Private Standard Forms of Contract
    • Though usually bound into the Contract Documents as evidence of being part of the Tender Documents
    • Therefore, they should not contain clauses or have attachments which have post contract implications
    • Otherwise, the Conditions should be declared as forming part of the contract.
  2. Form of Tender:
    ​回標書:
    • For the Tenderer to state his offer 給投標者填寫他的建議
    • Offer price based on specified completion times
    • Offer price based on offered completion times
  3. Form of Contract:
    合同書及條款:
    • Describe terms and conditions to be followed when performing the Contract
    • May refer to some Standard Forms of Contract, and not actually include a copy in the Tender Documents
    • Where a Standard Form of Contract is used, the Tender Documents should include any amendments or special conditions to the standard.
  4. Tender Drawings:
    招標圖紙:
    • Show the location, disposition, design (shape, form, sizes, configuration, fixing) of the work and choice of materials and workmanship.
  5. Specification or Employer's Requirements or Brief:
    料規範或發包方要求:
    • Specify the work, materials, method, workmanship, submission, testing and inspection standards required for the work
    • May include a section on Preliminaries or General Requirements, and other sections on materials and workmanship, those other sections are collectively called "Technical Specification" "技術要求"
    • May refer to some Standard Specification, and have Particular Specifications to describe deviations from or supplements to the standard
    • May use a General Specification, and have Particular Specifications to describe deviations from or supplements to the general.
  6. Pricing Schedules:
    計價單:
    • For the Tenderer to give a detailed build-up of his tender sum in any of the following forms:
      • Bills of Quantities
        工程量清單
      • Summary of Tender
      • Schedule of Rates or Schedule of Quantities and Rates
      • Schedule of Works
      • Quotation.

(revised, 9 Jan 2023)

Tender Booklet

  1. It is better to call those parts of the Tender Documents excluding Tender Drawings as "Tender Booklet" because these documents are usually bound into a booklet.
  2. Tender Documents = Tender Booklet + Tender Drawings.

Typical contents of Tender Booklet

  1. Conditions of Tendering / Conditions of Tender / Instructions to Tenderers.
  2. Form of Tender with various kinds of appendices.
  3. Appendices to the Form of Tender (if not included in or appended to the Specification or Preliminaries):
    • Pro-forma Surety Bond
    • Form of Warranty (for Sub-Contracts)
    • Statement of all convictions or no convictions under the Immigration Ordinance (Cap. 115) for last <> years
    • Statement of all convictions or no convictions under the Factories and Industrial Undertakings Ordinance (Cap. 59) for last <> years
    • Statement of all convictions or no convictions under the Employment Ordinance (Cap. 57) for last <> years
    • Statement of involvement in arbitration or litigation in the last <> years or foreseeable in the next <> months
    • Declaration of no conflict of interests
    • Declaration of no collusion.
  4. Amendments to the Standard Form of Main Contract / Special Conditions of Contract.
  5. Amendments to the Standard Form of Sub-Contract / Special Conditions of Sub-Contract.
  6. Specification:
    工料規範:
    • Preliminaries (if not included as Bill No. 1 in full)
    • Technical Specification:
      技術要求:
      • General Specification
      • Particular Specifications
    • Technical Schedules.
  7. Preambles to Bills of Quantities (if not included as Bill No. 2).
  8. Bills of Quantities:
    • Bill No. 1 – Preliminaries (full descriptions or headings only)
    • Bill No. 2 – Preambles
    • Bill No. 3 onwards - Measured Works Sections
    • Prime Cost and Provisional Sums
    • Dayworks Schedule or Daywork Rates Schedule
    • General Summary.
  9. Schedule of Rates or Schedule of Quantities and Rates (if without Bills of Quantities).
  10. Summary of Tender (a term used by the Private Standard Form of Contract without Quantities before 2005).
  11. Schedule of Drawings.
  12. Appendices (references to these Appendices should be given in the appropriate parts of the Tender Documents):
    • Insurance policies taken out by the Employer
    • Property Management’s house-rules (if not already described in the Specification and Preliminaries)
    • Main Contractor’s house-rules (for Sub-Contract tendering).

(10 revised, 9 Jan 2023)

Contract specific contractual provisions (other than the usual standard provisions)

  1. Names of the Employer and Consultants.
  2. Site locations, site restrictions, permissible working hours.
  3. Works outside site boundaries.
  4. Liability for ground conditions and underground obstructions.
  5. Scope of the Works, nominated sub-contracts and supply contracts, specialist domestic sub-contracts, previous contracts, concurrent contracts, works by public authorities, demarcation, relationship, co-ordination and attendance ("named sub-contracts" is a term used by a few developers' standard forms of contracts and therefore has no commonly adopted definition. It is intended to put more liability upon the Contractors but retain the right to choose the sub-contractors and fix their prices before naming to the Contractors.)
  6. Scope of contractors’ design, statutory submissions, maintenance and warranties.
  7. Time for possession, entry, commencement, completion; allowances for anticipated delays; criteria for certifying completion.
  8. Damages for delay; qualifications by sub-contractors on the level of damages.
  9. Defects liability period (Private Standard Forms of Contract); maintenance period (Government General Conditions of Contract).
  10. Form of Main Contract and Sub-Contracts to be used; special conditions.
  11. Excusable events (with extension of time) and compensable events (with financial compensation).
  12. Payment terms, advance payment, deposit payment, period of interim certificates, grace period for honouring payments, retention percentages, maximum retention, time to release retention.
  13. Drawings and Specification to be used.
  14. Pricing basis, with or without bills of quantities, lump sum or remeasurement.
  15. Any adjustments for cost fluctuations.
  16. Liability for insurance of the Works, third party, employees, construction plant and temporary buildings; limits of indemnity; levels of excesses / deductibles.
  17. Amount of surety bond.
  18. Phasing requirements and consequential effects on completion certificate, damages for delay, retention, defects liability, maintenance obligations, insurances, bond, etc.
  19. Specific requirements on hoardings, Employer’s site office.
  20. Responsibilities for source and consumption of temporary water, lighting and power.

(3 added, 5, 9 & 11 revised, 9 Jan 2023)

Reading Drawings and Specification

  1. For tender pricing, both the Drawings and the Specification must be read together in order to measure the quantities and estimate the unit rates.
  2. For work on existing buildings, the Drawings may not be able to represent fully and accurately the dimensions on site and the Tender Documents usually require the Tenderers to price taking into account the site conditions.
  3. The existing site (and building) conditions may also cause difficulties and inconvenience to the carrying out of the Works requiring extra costs to overcome.
  4.  Therefore, the Drawings and the Specification must also be read in conjunction with the existing conditions on site to make allowance in the quantities and/or unit rates.
  5. Drawings usually contain a lot of specification notes. For submissions to the Building Authority, the Specification is not required, all the requirements will be written as notes on the BD Submission Drawings, which may be used as the Tender Drawings. Therefore, the specification notes are important and must be reflected fully and consistently when drafting the Preliminaries and measuring the Bills of Quantities or Schedule of Quantities and Rates.
  6. It is usually specified in the Tender Documents that the Drawings and the Specification are complementary to which other and shall be read as a whole. However, there can still be cases where there are irreconcilable discrepancies (i.e. contradictions) between them that their order of precedence (i.e. which overrides which, which takes precedence over which) would need to be known.
  7. In the Standard Form of Building Contract Private Edition Without Quantities before 2015, the Specification takes precedence over the Drawings (the With Quantities version does not mention the Specification, but some Consultants may add provision to mention it with similar precedence). However, the precedence has been reversed in the 2005 and 2006 Editions. Some Consultants reverse it back. Therefore, the order of precedence is not an industry standard and has to be determined according to the individual contract.
  8. Some people view that the Specification is usually a company standard that has been carefully written as such, while the specification notes and annotations on the Tender Drawings are rather casually written, therefore, the Specification should override the Tender Drawings.
  9. Some people view that the specification notes and annotations should reflect the latest minds and wishes of the Architects and Engineers in spite of the Specification which may not be updated (with or without Particular Specifications) readily, therefore, the Tender Drawings should override the Specification. Yet, it is also possible that the Specification is finalised only towards the completion of the Tender Drawings.
  10. In theory, the Architect and the Engineers should be asked about the precedence between the Tender Drawings and Specification prepared by them, but it may be possible that they may have different choices. Adoption of the order of precedence of the Standard Forms may be the default solution.
  11. Note however that if the detailed Preliminaries clauses are included as part of the Specification instead of part of the Bills of Quantities, declaring the Tender Drawings to override the Specification may have the unexpected effect of altering the meaning of the seriously drafted Preliminaries by the loosely written specification notes and annotations. Therefore, if the Tender Drawings should override the Specification, the precedence should be preferably stated as: Preliminaries --> Tender Drawings --> Particular Specifications --> General Specification. By this, the order of precedence used in the Private Standard Form of Contract without quantities is maintained but keeping the Preliminaries as the higher authority.

(5 and 7 revised, 8 to 11 added, 9 Jan 2023)

Considerations when dealing with Drawings

  1. How detailed should the Tender Drawings be when the design is to be further developed by the Contractor? The significance of being too detailed or too vague.
  2. Distinguish between:
    • Drawings actually issued to tenderers
    • Drawings available for inspection
    • Standard Drawings
    • BQ (Taking-off) Drawings
    • Tender Drawings
    • Preliminary design drawings to be submitted by the tenderers
    • Contract Drawings
    • Shop Drawings
    • Installation Drawings
    • Field Drawings
    • Working Drawings / Construction Drawings
    • AI Drawings
    • As-built Drawings / Record Drawings.
  3. How to manage these drawings to avoid discrepancies.

Usual deficiencies in tender documentation

  1. Incomplete design.
  2. Inconsistent terminology.
  3. Discrepancies.
  4. Conflicts.
  5. Imprecise descriptions.
  6. Errors and omissions.
  7. Too complicated specifications.
  8. Not procurable.
  9. Outdated provisions.
  10. Insufficient ground investigation.
  11. Government approval and consent not in time.

Usual deficiencies in Tender Drawings generally

  1. Insufficient drawings.
  2. Insufficient details.
  3. Insufficient dimensions.
  4. Terms used on drawings not matching specifications.
  5. Specifying proprietary brand names and model numbers without the client's consent.

Usual deficiencies in Tender Drawings for alteration and addition works

  1. Consultants focusing on beautiful perspective only to obtain client's consent.
  2. Existing site and building's BD drawings not retrieved for use.
  3. Existing site and building's BD drawings issued for use not of the original scale (usually reduced).
  4. Existing site and building's BD drawings in imperial units.
  5. Existing site and building's BD drawings blurred because of scanning.
  6. Actual site construction deviating from the approved BD drawings.
  7. Extent and boundary of work items not sufficiently marked on drawings.
  8. No plumbing and drainage drawings prepared, only relying on marking on site photos or retrieved BD submission drawings.
  9. No design details.
  10. Details without dimensions.
  11. Terms used on drawings not matching specifications.

Usual deficiencies in Specification

  1. Terms used not consistent with those used in the Conditions of Contract, e.g. Architect vs Supervising Officer vs Contract Administrator, Main Contractor vs Contractor vs Sub-Contractor, Practical Completion vs Substantial Completion, Certificate of Completion of Making Good Defects vs Defects Rectification Certificate.
  2. Job and contract title not matching the rest of the Tender Documents.
  3. Page header and footing not coordinated with the rest of the Tender Documents. 
  4. Provisions in the Particular Specification not coordinated with the provisions in the General Specification
  5. Repeating but inconsistent provisions in different parts of the specifications.
  6. Insufficient provisions or overly huge specifications.
  7. Provisions not tailored to suit the project.
  8. Provided very late.

End of Page

Conditions of Tendering

Conditions of Tendering KCTang

Go to End

Note

  • 19/2/2023: Revised. ArchSD clause headings added.
  • 10/1/2023: "Sample clauses" added in place of "Special contents".
  • 20/12/2014: Moved from wiki.

Alternative names

  1. Conditions of Tendering.
  2. Conditions of Tender (not recommended to be used since the conditions are not those coming in with the Tender).
  3. Instructions to Tenderers.
  4. Notes to Tenderers.

(revised, 19/2/2023)

Purpose

  • To describe rules and procedures to be followed during tendering, not intended to govern the post contract rules and procedures.

(revised, 19/2/2023)

Usual contents

  1. Tender Documents issued.
  2. Obligations to check sufficiency of pages.
  3. Obligations to raise queries before tender return.
  4. Tender submissions required.
  5. Mode of submission of tenders, sealed envelope, labels, marked confidential.
  6. Return of Tender Drawings.
  7. Treatment of unauthorized alteration or erasure to the text of the Tender Documents.
  8. Treatment of qualifications.
  9. Treatment of alternative tenders.
  10. Unpriced items deemed included.
  11. Currency to be used.
  12. Statutory qualifications to contract.
  13. Treatment of errors.
  14. Not bound to accept the lowest or any tender.

Sample clauses

1.       Tender Documents issued

1.1     The Tender Documents issued consist of:

(a)      A Tender Booklet containing:

(1)     Conditions of Tendering;

(2)     Form of Tender;

(3)     Special Conditions of Contract;

(4)     Special Conditions of Nominated Sub-Contract;

(5)     Specification;

(6)     Preambles to Bills of Quantities;

(7)     Bills of Quantities; and

(8)     <Alternative to (6) and (7): Schedule of Quantities and Rates; and>

(9)     <Optional: Schedule of Rates for Plumbing and Drainage; and>

(10)     Schedule of Drawings.

<Note: The list should match the Contents page but to avoid inconsistency should be a condensed list showing the various types only while the contents should give the various parts making up each type.>

(b)      One set of drawings as listed or referred to in the Schedule of Drawings. 

<Note: Such drawings are the Tender Drawings and will become the Contract Drawings. "referred to" means that some of the drawings may not actually be issued to the tenderers." 

(c)      <Optional: One duplicate copy of the booklet as (a) above for retention by the Tenderer.>

<Note: In the old days when photocopying was not popular, a total of two copies were issued to the tenderers.>

1.2     <Optional: The Tender Documents (including Tender Drawings) are issued in PDF file format. The Tenderer shall print the Tender Documents for his own retention.>

<Note: It has become popular that softcopy is issued instead.>

1.3     The Tenderer shall check the number of the pages of the booklet referred to in Clause<s> 1.1(a) <and (c)> above against the page numbers given in the Contents page, and the number of drawings against the Schedule of Drawings, and should he find any missing, in duplicate, or indistinct, he must inform the Architect at once and have the same rectified.

1.4     Should the Tenderer for any reason whatsoever be in doubt as to the precise meaning of any description, he must inform the Architect in order that the correct meaning may be decided before the date for submission of tenders.

<Note: Some organisations may specify earlier deadline for raising queries.>

1.5     No liability will be admitted, nor claim allowed, in respect of errors in the Contractor's tender due to mistakes which should have been rectified in the manner described above.

2.       Tender

2.1     The Tender shall consist of:

<Alternative: The Tender shall consist of THREE hard copies and THREE CD Roms each containing electronic files of the following:>

(a)      The bound booklet referred to in Clause 1.1(a) above with:

(1)       The Form of Tender completed, signed, witnessed and dated.

(2)      The Bills of Quantities priced, extended, cast and totalled. The sum shown on the Form of Tender must agree with the total of the General Summary.

(3)      <Alternative: The Schedule of Quantities and Rates priced, extended, cast and totalled. The sum showing on the Form of Tender must agree with the total of the Schedule of Quantities and Rates.>

(4)     <Optional: The Schedule of Rates for Plumbing and Drainage priced, extended, cast and totalled with the total carried forward to Bill No. <> of the Bills of Quantities.>

(5)     Technical Schedule for <Plumbing and Drainage> completed.

<Note: If both hard and soft copies are to be submitted, which one shall prevail in case of discrepancies should be stated.>

(b)     Three copies of a list of the names of the specialist domestic sub-contractors that the Tenderer intends to choose for sub-letting part of the Works.

(c)     Three sets of preliminary design drawings and specification for <>.

(d)     Three sets of proposed method statement and programme of the Works.

(e)     Three copies of site layout plan showing the locations of plant, scaffolding, catch fans, stores, site office and access routes.

(f)     Three copies of organisation chart with the names and qualification of key management and site personnel for the Works.

(g)     <Optional: Four copies of statement of qualifications to and deviations from the Tender Documents.>

(h)     <Optional: Four copies of job reference of projects of similar nature completed within the last five years.>

(i)     Three copies of the following general company information, if not already fully submitted when expressing interests to tender:

(1)     Company organisation.

(2)     List of past job reference of similar nature to the Works.

(2)     <Alternative: Descriptions on past and current experience in the supply and installation of <>, together with a job reference list.>

(3)     Current and anticipated work load for the coming 12 months.

(4)     <Optional: Experience in working on the airport restricted areas.>

(5)     Photocopy of business registration certificate.

(6)     Photocopy of certificate of incorporation, if a company.

(7)     Photocopy of contractor’s registration certificates.

(8)     Audited accounts for the last three years (strict confidence will be observed by the Employer and the Consultants).

(9)     Statement of all convictions or no convictions under the Immigration Ordinance (Cap. 115) in the last twelve months.

(10)     Statement of all convictions or no convictions under the Factories and Industrial Undertakings Ordinance (Cap. 59) in the last twelve months.

(11)     Statement of all convictions or no convictions under the Employment Ordinance (Cap. 57) in the last twelve months.

(12)     Statement of involvement in arbitration or litigation in the last three years or foreseeable in the next 12 months.

<Note: Requesting three copies is to reduce the task of making photocopies and further distribution.
The list has become longer and longer these days as demanded by the Clients and Project Managers. Are all these essential or necessary?>

2.2     The Tender shall be enclosed in a sealed envelope which is to be labelled in the manner and deposited at the time and place set out in the invitation to tender.

<Note: Though not expressly stated here to give flexibility, tenders not submitted accordingly should be disqualified.>

2.3     All drawings issued for tendering purposes are to be returned to the Architect on or before the time set for receipt of tenders.

<Note: This is a practice left from the old days when the drawings were large and making prints was expensive. The returned drawings could be used for binding as Contract Drawings. The tenderers should actually need the drawings for answering queries after tender return. The actual return of the drawings has diminished particularly when softcopies are disseminated.>

2.4     No unauthorised alteration or erasure to the text of the Tender Documents will be permitted. Any tender containing such alteration or erasure may not be considered.

<Note: "may" only to give flexibility.>

2.5     The Tenderer shall submit a conforming tender strictly based on the requirements of the Tender Documents. Any qualification of the Tender Documents may cause the Tender to be disqualified. Alternative proposals may be submitted separately in addition to the conforming tender with the details and effects on the Contract Period and Tender Sum stated.

<Note: It is the usual practice to reject all qualifications. To ensure competition on the same basis without giving room to manipulate the tender after submission when being enquired about the qualifications, Government projects may disqualify a tender submitted with qualifications. However, the qualifications may not necessarily be unacceptable. They may be genuine attempts to clarify or modify some unsuitable terms and conditions in the Tender Documents. Therefore, the qualifications should be individually considered on their own merits. To ensure competition on the same basis, other tenderers should also be given a chance to advise on the implications of those acceptable qualifications. In that case, the tender sums may need to be permitted to be adjusted.> 

2.6     The Tenderer shall be deemed to have made allowance in his prices generally to cover items of Preliminaries and any other items if these have not been priced against the respective items.

2.7     In the absence of specific prices for any items required for the execution of the Contract, the relevant costs shall be deemed to have been included in the rates and prices for other specifically priced items.

<Note: It is usual that not all Preliminaries items will have prices entered against them. It may also be possible that a few measured items have no prices entered against them intentionally or accidentally. The two above deeming clauses are to avoid the need to ask the Tenderer to confirm inclusion.>

3.       Currency

All tenders shall be in Hong Kong Dollars and no adjustment will be made for fluctuations in exchange rates of currencies.

4.       Contracting qualification

The Tenderer shall possess a valid business registration certificate and be registered with the relevant authorities authorising him to carry out construction works of the category of the Works.

5.       Correction of errors

5.1     In the event of the Tenderer discovering a genuine error in his Tender after it has been deposited, attention in writing may be drawn to the error and an amendment submitted which, provided that the amendment shall have been deposited on or before the time fixed for receipt of tenders, may be accepted.

5.2     The Tender Sum will be regarded as a lump sum and will not be amended for errors found in the examination of tenders.

<Note:

(a)     Alternative clause will be needed for remeasurement contract.

(b)     Traditionally, the tendered total of the remeasurement contract can be altered when arithmetical errors are found and the arithmetically corrected total will be treated as the tendered total for acceptance.

(c)     The rationale is that since the quantities are subject to remeasurement, if the final remeasurement does not change the quantities, the quantities multiplied by the unit rates will give the same arithmetically corrected total, and therefore the arithmetically corrected total should be accepted as the corrected tendered total.

(d)     When the tendered total is permitted to be altered, the unit rates must not be altered at the same time, otherwise, it would mean a change to the total price level defeating the tender competition on the unit rates (quantities are not for competition).

(e)     The clause may become: The Tender Sum will be recalculated to correct any arithmetical errors found but the unit rates shall not be altered.

(f)     However, it may still be permissible to treat the tendered total as fixed for the purposes of correction of errors as if it is a lump sum. This has the benefits of keeping the tendered total unchanged and offering chances to amend any anomalous unit rates.

(g)     The clause may become: The Tender Sum will not be amended for errors found in the examination of tenders.> 

5.3     If there is any discrepancy between the amounts in “words” and in “figures” for the Tender Sum stated in the Form of Tender, the one that agrees with the figure stated in the General Summary of the <Bills of Quantities / Schedule of Quantities and Rates> shall be taken as the Tender Sum, otherwise, the amount in “figures” shall be taken as the Tender Sum. Where either of the amounts is left blank or illegible, the remaining one shall be taken as the Tender Sum. If the amounts are both left blank or illegible, the Tender will be taken as invalid.

5.4     The following errors should they occur in the tendered priced <Bills of Quantities / Schedule of Quantities and Rates> will be rectified and altered in red ink:

(a)      Discrepancies between the product of quantity and rate and the extension (The rate will be amended to agree with the quantity and the extension in the cash column or the extension to agree with the quantity and the rate, as appropriate.);

<Note: The rate will not be amended, and only the extension in the cash column will be amended to agree with the product of quantity and rate, in the case of remeasurement contract with the tendered total recalculable.> 

(b)      Insertion of a lump sum price for a measured item without a unit rate (The unit rate will be deemed to be equal to the lump sum price divided by the quantity of the item.);

(c)      Errors in including the prime cost and provisional sums as specified;

(d)      Errors in casting of cash columns;

(e)      Errors in carrying forward totals to collections or summaries; and

(f)       Omission of some priced pages (The priced pages shall be submitted with each page total matching that in the collection of summary and the rates matching those in other submitted pages.).

5.5     The total error will be calculated as a plus or minus percentage of the corrected tender sum minus the correct totals of preliminaries items, provisional sums, Prime Cost Sums (if any) (but not profit and attendance thereon) and dayworks, and will be applied to the tendered rates other than preliminaries prices and daywork rates for the purposes of pricing variations and remeasured quantities. If the percentage error is less than 0.50%, no adjustment will be made.

5.6     Should examination of a tender reveal errors of such magnitude as in the opinion of the Architect would involve the Contractor in serious loss then the nature and amount of such errors will be communicated to the Tenderer and he will be asked to confirm in writing that he is prepared to abide by his Tender.

6.       Percentage adjustments

6.1     The calculation of any percentage adjustments to the rates and prices shall be based on the all-in rates without subtracting any prime cost rates which may be included therein. The prime cost rates included in the all-in rates subject to percentage adjustments shall remain unchanged.

<Note:

(a)     The percentage adjustments may be for correcting arithmetical errors or for reflecting discount offered. Where a tender involves both, it would be preferred to combine the two adjustments into one single percentage adjustment.

(b)     The first statement above means that the adjusted all-in rate is equivalent to (prime cost + other costs) x (1 + profit and overheads) x % adjustment. The second statement is to clarify that the prime cost shall not be adjusted. The % adjustment is to be understood as an adjustment to the profit and overheads. If the % adjustment is a downward adjustment, it may be possible that the adjusted all-in rate becomes smaller than the prime cost rate. Though appearing odd, this does not affect the validity of the adjusted all-in rate and the integrity of the prime cost rate. If the % adjustment is applied to a group of items at the end of variation calculations, the odd impression will not be apparent.

(c)     Some consultants deduct the value of the prime cost rates when calculating the percentage adjustment because they consider that the prime cost rates should not be subject to the percentage adjustment. The adjusted all-in rate is then equivalent to prime cost + other costs, profit and overheads x % adjustment. This has the benefit of avoiding the possibility of the adjusted all-in rate being smaller than the prime cost rate, but this would require a detailed calculation of the value of the prime cost rates. When applying the % adjustment, it should be applied to the (all-in rate - prime cost rate every time). This method is cumbersome and will increase the chances of making errors. This method is not really necessary.

(d)     It should be noted that the % adjustments calculated using the two different methods are different. Whatever base is used to calculate the % adjustment, the % adjustment shall be applied the same base to ensure correctness. e.g. if D% = A / B x 100%, then B can multiply D% to give A. If D% = A / (B - C) x 100%, then D% must multiply (B - C) to give A.>

6.2     All Prime Cost Sums (if any) and Provisional Sums shall be excluded from any corresponding percentage adjustment calculations as a result of any overall adjustment to the Tender Sum.

<Note: Similar to the prime cost rates, Prime Cost Sums and Provisional Sums shall not be adjusted for any percentage adjustments to the Tender Sums.>

7.       Rationalization of unreasonable rates and prices

The Tenderer may be required to rationalize unreasonable rates and prices by replacing them with more reasonable rates and prices for all purposes of the Contract (including pricing payments, variations and provisional quantities). The amounts of the affected items shall be re-calculated. The Tender Sum shall remain unchanged. The difference between the corrected total and the original Tender Sum shall be treated as an arithmetical error as Clause 5 hereof, unless it is specifically agreed that this shall be treated as a lump sum adjustment without affecting the unit rates.

<Note:

(a)      This is not a common clause for tenders based on Bills of Quantities because usually the tendered unit rates should not be changed. This is specially drafted by our company for reasons explained below.

(b)      In case of the presence of unreasonably high or low rates in a contract, the following will happen:

 

Employer

Contractor

Unreasonably high rates

 

 

Variation addition

Unreasonable cost increase

Very good profit (favourable)

Variation omission

Higher cost reduction (favourable)

Unreasonable income reduction

Unreasonably low rates

 

 

Variation addition

Lower cost increase (favourable)

Unreasonable loss

Variation omission

Unreasonable cost reduction

Lower cost reduction (favourable)

(c)      The usual practice is to identify unreasonable rates and prices and agree more reasonable rates and prices to be used for pricing variation additions and omissions, and the Tender Sum should remain unchanged. 

(d)      The rationale is that, in spite of any over or under pricing in the Tender Sum, when more reasonable rates are used for valuing changes whether it be an addition or an omission, the above unreasonable situations would not arise.

(e)      However, this practice has the following issues

(1)      Some people may argue that the original rates and prices should be used for omissions, while the more reasonable rates and prices should be used for the additions only. Tenderers would argue for this when the original rates and prices were unreasonably low. Employers would argue for this when the original rates and prices were unreasonably high.

(2)      When the unreasonably priced item is a provisional quantity item, care should be exercised to describe whether the more reasonable rate is to be used for the increase to or decrease from the provisional quantities (i.e. price the original provisional quantity at the original rate first) or is to be used for the complete remeasurement.

(3)      For interim payment valuation, the original rates and amounts are still used, giving an impression of either over or under payment.

(f)       By replacing the unreasonable rates and prices with more reasonable rates and prices for all purposes of the Contract, the rationale of the usual practice is maintained, but people no longer need to refer to the unreasonable rates and prices any more, and the issues mentioned above would not persist.

(g)      For tenders not based on Bills of Quantities, the quantities do not form part of the Contract, and the unit rates are more important. It should be permissible to require the adjustment of both the quantities and the unit rates before awarding the Contract to rationalise the unit rates for post contract use. This special clause is very relevant.

8.        Short-listing

The Employer reserves the right to short-list tenders for further tender clarifications, interviews and negotiation without the obligation to invite all tenderers to do so.

<Note: This is to avoid the challenge by tenderers not on the short-list as to why they are not similarly invited.>

9.        Acceptance of tender

The Employer is not bound to accept the lowest or any tender he may receive.

<Note: This is to avoid the challenge by tenderers that they should be paid the tendering costs if no tender is accepted.>

(added, 10/1/2023)

(revised, 19/2/2023)

Clause headings of Architectural Services Department's Notes to Tenderers

Notes to Tenderers (not to be bound into the Contract Documents):

[A: Matters related to tendering (subtitle for internal reference only)]

NTT A1

Location of tender box

NTT A2

Procedures for opening tenders

NTT A3

Pre-tender meetingo

NTT A4

Clarifications from *Surveyor / Maintenance Surveyor designate

NTT A5

Check list for tenders deposited in tender box

NTT A6

Electronic submission

NTT A7

Changes in status of qualifications

NTT A8

Regulating actions on inappropriate conducts

NTT A9

Regulating action (serious incident or conviction for site safety or environmental offences)

NTT A10

Anti-collusion

NTT A11*

Formula Approach

NTT A12*

Marking Scheme Approach

NTT A13

Evaluation method for use intenders which EMSTF may be a potential bidder

NTT A14

Assessment of EMSTF offer

NTT A15

Net present value analysis

NTT A16

Destruction of documents

NTT A17

Bid challenge (WTO GPA)

NTT A18

JV Proforma

NTT A19

(Not Used)

NTT A20

Eligibility to Tender and for the Award of Contracts Applicable to Confirmed Group *A/B Contractors

NTT A21

(Not Used)

NTT A22

Additional copies of tender drawings in electronic format

NTT A23

Green Procurement for Tender Documents

NTT A24

Green Dissemination of Drawings to Tenderers

NTT A25

Plumbing Installation

NTT A26

Specialist Sub-contractors

NTT A27

Reference Design of Piling Works Provided by Supervising Officer

NTT A28

(Not Used)

[B: Matters related to the conditions of contract (subtitle for internal reference only)]

NTT B1

(Not Used)

NTT B2

Constraints on Supervising Officer’s power

NTT B3

(Not Used)

NTT B4

(Not Used)

NTT B5

Assessment of Section Subject to Excision

NTT B6

Employer’s Power to Reduce Contingency Sum

NTT B7

Lump sum contract

NTT B8

Advance Payment under *Capital Works Contracts / Term Contracts

NTT B9

Contract price fluctuations

NTT B10

Pay