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PREFACE
In era globalization and monetary crisis,
competition in the market to obtain the job is very very
hard. We as a Construction Company need and have to
sharpen our Quotation in order to penetrate the market,
get the job and survive.

In this session, in the limited time, we try to

overview all aspects in the Cost Estimation as a
fundamental knowledge of estimating of the cost of
project, hopefully it's will improve your capability in
doing estimation, at least as additional knowledge to all
of you.

We know this materials is not sufficient and we are

waiting for your suggestion/opinion to improve the 2

materials.
 OBJECTIVE
The primary purpose of this training is to
enable the trainee to gain fundamental
knowledge of estimating the cost of
projects to be constructed in order they
can do estimating either for the tendering
or budgeting purpose.

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 INTRODUCTION
The purpose of estimating is to determine the forecast
costs required to complete a project in accordance with
the contract plans and specifications, with reasonable
profit and still within the owner's budget.
There are two types of estimates, approximate
estimates (preliminary, conceptual, or budgetary
estimates) and detailed estimates (final or definitive
estimates).

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 FLOW OF ESTIMATION PROCESS
MARKETING

PM or Proposal
Mgr in charge

DED Estimators PROC /

- Review Engineering scope
- Prepare basic drawing
- Prepare specification data
- Prepare Temp.Facilities
layout drawing
- Calculate Engineering cost
appointed by PM
- Review Scope of Works
(Consider effect of location,
security,traffic,space,etc.)
- Determine quantities
- Calculate material cost
- Calculate labour cost
- Calculate equipment cost
- Calculate other cost
involved, and compiled.
H.R / RED /
FAT
- Obtain material price
- Transportation rates
- Insurance premium rate
- Labour rates
- Equipment rental rates
- Taxes and duties rates
- Bid bond
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FLOW OF ESTIMATION PROCESS
START

Instruction To Bidder
- Description of the Project
- Scope of Work / Supply
INQUIRY
- Bill of Material / Quantity
DOCUMENT - Material Specification
- B/Q or MTO
- Time Schedule
- Productivity Data - General Terms & Conditions
- Material Price - Special Conditions
- Manpower rates - Codes and Procedures
ESTIMATION
- Equipment rates - Drawings
PROCESS
- Transport. rates
- Premi Insurance
- Taxes rates - Cover letter
- Summary of Price
- Others COST - Terms & Conditions
ESTIMATES/ - Scope of Works Division
QUOTATION/ - Price Breakdown
BUDGET - Construction Schedule
- Manpower Schedule
- Equipment Schedule
- Others, as per Client
requirements 6
FINISH
 COST CATEGORY
DIRECT INDIRECT OVERHEAD
COST COST & PROFIT

QUOTATION PRICE
OR
TENDERING PRICE

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 COST COMPONENT
DIRECT INDIRECT OVERHEAD
COST COST & PROFIT

1. Direct Labour
1. Job Site Indirect Cost 1. Overhead & Profit
- Contractor Staff
- Temporary Facilities - Overhead
- Onsite area
- Tools - Profit
- Offsite area - Temporary Material
- Consumables
- Utility area - Insurances
2. Mob Demob /
2. Direct Material Transportation Cost
- Imported materials - Personnel
- Indirect material
- Local procured materials - Equipment & Tools
3. Head Office Cost
3. Construction Eqpt. - Engineering Cost
- Other expenses
4. Taxes and Duties 8
 DIRECT COST

Direct cost means the costs which directly engaged in

the construction of the permanent facilities of the
Plant or Project.

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Direct Labour

This item represents costs for the labour directly engaged in the
construction of the permanent facilities of the Plant.

The direct labour consists of Foreman and those workers under

his control, such as fitters, riggers, millwright, welder, carpenter,
electrician, helper and common labour, etc.

The direct labour cost include wages, overtime, taxes, social

burdens, board and lodging, transportation, etc.

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Direct Material

This item represents costs for those materials to be

used for the permanent purpose and to be incorporated
into the permanent facilities of the Plant.

The direct material cost include cost of transportation,

procurement service, custom duties, taxes and levies.

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Construction Equipment

Construction equipment means the equipment to

handle direct materials.

Depreciation cost for all construction equipment

including all maintenance and service, fuel, lubricant
and grease (excluding operators/drivers).

Rental charges for all construction equipment

including all maintenance and service (excluding
operators/drivers)

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 INDIRECT COST

Indirect cost means the costs which are not directly

engaged in the permanent work but engaged in the
supporting services to the permanent work.

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Contractor Staff

This item represents costs of those and workers who

are not directly engaged in the permanent work but
engaged in the supporting services to the permanent
work, such as secretary, office boy, clerk, guardmen,
mechanic, operators/drivers, etc., including
manageemnt and supervisory staff.

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Temporary Facilities

This item represents provision, maintenance and

dismantling costs of site offices, warehouses,
workshops, camp including furniture, utilities,
sewerage, temporary roads, fencing, etc.

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Tools

This item covers all necessary tools including spare

parts to be used for or in connection with the
permanent works, such as precision tools, lifting tools,
fitter & welder tools, workshop tools, electrician tools,
etc.

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Temporary Materials

This item represents costs for provision of temporary

material to be used in connection with the permanent
works, such as scaffoldings, temporary air dist.
system, steel, wooden block, plastic sheet, temporary
electrical dist.syt. etc.

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Consumables

This item represents costs for provision of consumable

materials to be used in connection with the permanent
works, such as fuel, welding rods, acetylene, oxygen,
water, electricity. etc.

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Insurances

This item represents costs for insurance premium of

manpower, equipment and cars, and other insurances
required by client to covers by contractor.

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Mob Demob/Transportation

This item represents costs for mob and demobilization

of manpower, equipment/tools and materials
including transport insurance.

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Head Office Cost

This item represents costs for engineering work and

other expenses in Head Office.

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Tax and Duties

This item covers all the taxes and duties to be levied

on the contractor in connection with the contractor
execution of the works except for the direct materials.

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 OVERHEAD & PROFIT

This item represents the Contractor's overhead and

profit expected to be recoverable from the execution
of the works.

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DATA REQUIREMENTS

- B/Q or MTO
- Productivity Data
- Material Price
- Manpower rates
- Equipment rates
- Transport. rates
- Premi Insurance
- Taxes rates
- Others
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 Bill of Quantity or Materials Take-Off

QUANTITY
No. Item Number Equipment Name Nos Unit Weight

1 Heater / Quench Area

1 C-1341 Portable hydrojet water separator 1 Ton 0.35
2 C-1502 Gasoline Redistilation column 1 Ton 30
3 C-1531 Gasoline / Water separator 1 Ton 12
4 C-1532, C-1542 Dilution water coalescer 2 Ton 2

QUANTITY
No. Ref. Drawing Item Size Specification Qty Unit

1 Utility Area
1 U-M001-1234-00 Pipe 8" PE, SCH 40, API 5L Gr.B 150 m
2 Elbow 8" BW, SCH 40, ASTM A234 WPB 18 ea
3 Gate Valve 8" 150#, RF, BB, OS&Y, STD TRIM, ASTM A216 WCB 12 ea
4 Flange 8" 150#, SO, RF, ASTM A105, SCH 40 24 ea 25
 Productivity Data

The productivity is the number of units work

produced by unit of equipment or a person in a
specified unit of time.

In other word, productivity is the number of eqpt. or

person in certain period of time that required to
produce a unit work.

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 Productivity Data (Erection Work)
A STEEL STRUCTURE
1 Light Structure 60 Mhr/T
2 Medium Structure 55 Mhr/T
3 Heavy Structure 50 Mhr/T

B TANK / DUCTING / SILO

1 Ducting 90 Mhr/T
2 Silo 90 Mhr/T
3 Tank 90 Mhr/T

C PIPING
1 Carbon Steel Pipe 3.5 Mhr/DI
2 Stainless Steel Pipe 4.5 Mhr/DI
3 Alloy Steel Pipe 4.5 Mhr/DI

D EQUIPMENT
1 Vessel / Drum / Reactor 50 Mhr/T
2 Heater/Cooler/Cooling Twr. 40 Mhr/T
3 Pump/Compressor/Blower 60 Mhr/T
4 Aux. Boiler 60 Mhr/T
5 Recovery Boiler/HRSG 70 Mhr/T
6 Boiler & Accessories 80 Mhr/T
7 Steam Turbine 65 Mhr/T
8 Gas Turbine 40 Mhr/T
9 Water Turbine/Hydro Power 65 Mhr/T
10 Electrostatic Precipitator 60 Mhr/T
11 FGD 60 Mhr/T
12 Stack/Chimney 70 Mhr/T
13 Conveyor 70 Mhr/T
14 Stacker/Reclaimer 60 Mhr/T
15 Unloader 60 Mhr/T

E OTHERS
1 Refractory 175 Mhr/T
2 Insulation & lagging 9.0 Mhr/m2
3 Painting 1.6 Mhr/m2

F CIVIL WORK
1 Excavation 4.5 Mhr/m3
2 Backfill & Compaction 3.6 Mhr/m3
3 Formwork 2.8 Mhr/m2
4 Rebar work 110 Mhr/T
5 Concrete work 4.46 Mhr/m3
6 Grouting work 5.0 Mhr/m3

G ELECTRICAL & INSTR. WORK

1 Cabling work 0.15 Mhr/m
2 Grounding work 3.0 Mhr/m
3 Cable Tray work 4.0 Mhr/m
4 Conduit work 2.0 Mhr/m
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5 Jointing work 5.0 Mhr/ea
6 Electr. equipment 35 Mhr/ea
7 Instrument work 3.5 Mhr/ea
 SUMMARY OF PRICES

S/NO DESCRIPTION QTY TOTAL AMOUNT REMARKS

1 DIRECT LABOUR
2 CONTRACTOR STAFF
3 TEMPORARY FACILITY
4 CONTRACTOR EQUIPMENT
5 TEMPORARY MATERIALS
6 ERECTION TOOLS
7 CONSUMABLES
8 MOB DEMOB
9 INSURANCE
10 ANCILIARY
11 MATERIALS HANDLING
12 ASSIST. IN COMMISSIONING

TOTAL

ROUNDED
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 S UMMARY OF PRICE

S/N CBS DESCRIPTION MHR AMOUNT %

US $

A DIRECT COST
1 A0100-00 DIRECT LABOUR - 520,992.86 3.83%
2 A0400-00 PERMANENT MATERIALS 71,213.00 0.52%
3 A0500-00 TEMPORARY MATERIALS 636,916.00 4.69%
4 A0300-00 CONSUMABLES 1,457,918.56 10.73%
5 A0600-00 TOOLS 601,539.68 4.43%
6 A0700-00 EQUIPMENT 2,285,896.24 16.82%
7 A0700-01 VEHICLE 203,235.00 1.50%
8 A0800-00 SUB CONTRACTOR 2,498,468.06 18.38%
TOTAL DIRECT COST 8,276,179.39 60.89%

B INDIRECT COST
1 B0200-00 CONTRACTOR STAFF 4,160.23 2,992,336.74 22.01%
2 B1000-00 TEMPORARY FACILITY 800,000.00 5.89%
3 B1000-01 SITE OPERATIONAL COST 800,000.00 5.89%
4 B1100-00 HEAD OFFICE EXPENSES 106,320.00 0.78%
5 B1100-01 PREVENTION COST 42,588.00 0.31%
6 B1400-00 APPRAISAL COST 33,340.00 0.25%
7 B1700-00 FAILURE COST 11,112.50 0.08%
8 B0900-00 INSURANCE 209,519.78 1.54%
9 B1100-02 SAFETY 6,610.44 0.05%
10 B1300-00 MOBILIZATION & DEMOBILIZATION 315,000.00 2.32%
TOTAL INDIRECT COST 5,316,827.46 39.11%

GRAND TOTAL 13,593,006.86 100.00% 29

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