Build Rate & Pricing

8/18/2019 Build Rate & Pricing

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HKIS QSD CPD

Topic:

Contractors Build Rates & Pricing

By: Jesse Wong


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Background How special of the construction industry?

Contractor as an insurance company

Contractor will e left ehind when

e!eryone wal"s off

Ris"y usiness? # story


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Build up rates / costs

Labour $How much doule handling?

$What type of sucontractors?

Material $How much wastage? Plant $What type? How many?

Overhead $preliminaries %tangile &

ris"s %intangile

Profit or at cost?


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Preliminary costs 'um of insurance ( Bond Contract period$fluctuation ( )* Payment period ( honouring time 'ite management staff

Plant and e+uipment Reputation of the client Reputation of the consultants )ocation of the site Technology re+uired i,e, -P./ for demolition wor"s 0o!ernment re+uirement i,e, contamination )imit of retention ( min, payment


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Preliminary costs

Preliminaries

1urniture & /+uipment

'taff


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Factors to consider

when pricing1ully understand the pro2ect re+uirement:$3 'ite constraints

3 Wor"ing time

3 4nterfacing

3 'ite access

3 5eighours

3 'tatutory re+uirement

3 'tandard of safety re+uirement3 6tility 'er!ices

3 *etails pro!ided

3 Judgment from Contractor


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Pricing strategy

Current and future mar"et )aour ( material ( currency ( interest etc

0loal commodities price

Contract period

Contractor input

J7 'peculating

)ong ( short term relationship consideration


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Knowledge are

important

Programme of wor"s .ethod statement

'chedule of materials sumission

'chedule of drawings sumission *esign and structural calculation

Type of contract

Construction details Predict construction ris"s

Thin" of your own home decoration


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Sample case Tender$information

Bid sum

PC & P-

Cost uilding

'chedule of Pro!ision


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Indirect factors aect

pricing

)earn from e8perience 6pdate yourself

Tal" to others

9eep good relationship with supplier 9eep good relationship with an"ers

9eep good relationship with sucontractors

Build up loyalty of your staffs ( colleagues

Be a considerate contractor

)ong time to settle final #(C


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Company consideration

4nternal need Company strategy

'haring ( a!ailale of resources

1inancial ( technical capaility

Warranty ( 0uarantee

1oreseeale tender opportunities Bac"ground of clients ( customers

The way ( time of settlement of final #(C


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Reference to professionalprediction

#ccording R)Bs latest +uarterly report; tenderprices in Hong 9ong ha!e staili@

continue to rise in the Ath- of >

)oo"ing forward; the rising trend of tender

prices throughout >

With infrastructure pro2ects mo!ing; the return of

inflation and the increased acti!ities in the

property mar"et; tender prices in Hong 9ong are

e8pected to rise more significantly in the second

half of the year


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Tender price index s constructio

costs


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!uestions

When is the pea"? How to price a tender when the trend is going

up?

#re the contractors ma"ing huge profit when

the trend is down turning?

#s a P-'; how to estimate the costs?

How to ad!ise the client a sa!er way?

How the contractors hedge the ris"s?


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《孫子兵法》：「常勢，水常形

」

Than" you

-

Documents

Build Rate & Pricing