CONSTRUCTION COST ESTIMATING AND TENDER PRICING_SECOND EDITION

BUILT-UP RATES EXAMPLE

1. Bar Reinforcement

Reinforcement bars which always used are plain steel reinforcement and high-tensile
steel. Reinforcement bar must be cut and bent as shown in the drawings engineer.
An increase of 5% over the cost of the reinforcement bar is necessary to take into account
the waste that occurs primarily during the cutting process and also to damage.

Weight of reinforcement bar Required tying wire for bar reinforcement
Wastage and spacer block percentage
Cost of spacer blocks that used to
set position of bar should also be
included in the reinforcement bar
cost. The spacer block cost is small
and contractors may include the
cost into wastage provision.

The percentage of wastage for cut
and shape of bar on site was
higher than bar that already cut
and shaped by the supplier before
deliver to the construction sites.

42

BUILT-UP RATES EXAMPLE

1. Bar Reinforcement

(Cut and bend at site)

16mm Diameter high tensile steel reinforcement in straight and bent bars in
foundation – Kg

43

BUILT-UP RATES EXAMPLE

1. Bar Reinforcement

(Ready Cut)

12mm Diameter high tensile steel reinforcement in straight and bent bars in
wall – Kg

44

BUILT-UP RATES EXAMPLE

2. Fabric Reinforcement

Fabric reinforcement is often used in
the floor construction. Weight for
fabric reinforcement is shown in
table below.

A represent square grids and B is
oblong. Fabric reinforcement is
measured in square meter.

Overlap in fabric reinforcement during Weight of fabric reinforcement
installation are not taken into account Overlap for fabric reinforcement
when measuring the quantity and the
contractor shall take into account the
increase in the quantity of this material
when calculating the costs.

The amount of the increasing depends
on the sheet size and required overlap.
Contractor shall make an additional 5%
forwastage and 10% forthe cost of tying
wire and the cost of the spacer block.

General labours is required to unloading and arrange fabric reinforcement at sites including for bending,
cutting,placing and tyingfabric reinforcement in place.

Labour output forunloading and stackingwork is 0.15 hours/ m2. Labouroutput for bending,cutting, placing
andtying fabric reinforcement is shown in the table below.

Labour output for placing fabric reinforcement

45

BUILT-UP RATES EXAMPLE

2. Fabric Reinforcement

Fabric reinforcement to B.S. 4483 Ref. A 193 with 150mm side and end laps in
suspended floor slab – m2

46

LET'S
DO

SOME

ACTIVITY

EXERCISE 1

Calculate cost for Bar reinforcement (Cut and bend at site) below.

47

LET'S
DO

SOME

ACTIVITY

EXERCISE 2

Calculate cost for Bar reinforcement (Cut and bend at site) below.

48

LET'S
DO

SOME

ACTIVITY

EXERCISE 3

Calculate cost for fabric reinforcement below.

49

LET'S
DO

SOME

ACTIVITY

EXERCISE 3

Calculate cost for fabric reinforcement below.

50

CHAPTERCONSTRUCTION COST ESTIMATING AND TENDER PRCING_SECOND EDITION

5

BUILT-UPRATESFOR

FORMWORKS

AZIRAH ADNAN

FORMWORKS

Concrete formwork is required to
support concrete until the concrete
has its own strengths and to
generate shapes, sizes and
finishes concrete as required.
Materials used for the formwork is
plank, nails and strut. Concrete
formwork usually made of planks,
plywood or metal sheet.
Formwork can be used more than
once depending on the respective
concrete component design and
the way it is dismantled.
The number of usage can affects
the cost of the formwork.
Nails needed arearound 0:35 kg
for 1 square meter of formwork.
The amount of wood needed to
strut is depending on the design of
the strut,height and the amount of
concrete that is supported.

51

BUILT-UP RATES EXAMPLE

1. FORMWOKS

Table below shows the average number of ordinary use of wood for concrete
formwork.

Table below shows the amount of strut needed for formwork that not exceeding 3.50
meters high. An additional 10% on the cost of materials is necessary for the
wastage.

Table below shows labour output for dismantle concrete formwork.

52

BUILT-UP RATES EXAMPLE

1. FORMWOKS

Formwork to horizontal soffit of slab. – m2

53

LET'S
DO

SOME

ACTIVITY

EXERCISE 1

Calculate cost for concrete formwork below.

54

LET'S
DO

SOME

ACTIVITY

EXERCISE 2

Calculate cost for concrete formwork below.

55

CHAPTERCONSTRUCTION COST ESTIMATING AND TENDER PRCING_SECOND EDITION

6

COST DATA &
ADDITIONAL INFORMATION
 

AZIRAH ADNAN

RELEVANT COST DATA

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

MAJOR MATERIAL
PRICE

56

RELEVANT COST DATA

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

LABOUR WAGES
RATE

57

RELEVANT COST DATA

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

MACHINERY HIRE
RATES

58

RELEVANT COST DATA

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

MAJOR MATERIAL
PRICES

59

RELEVANT COST DATA

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

MAJOR UNIT
RATES

60

RELEVANT COST DATA

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

AVERAGE
BUILDING PRICES

61

RELEVANT COST DATA

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

BUILDING
MATERIALS COST
INDEX CHANGES

62

RELEVANT COST DATA

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

MARKET
CONDITIONS
INDEX

63

ADDITIONAL INFORMATION

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

LABOUR
CONSTANTS

64

ADDITIONAL INFORMATION

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

PLANT
CONSTANTS

65

ADDITIONAL INFORMATION

All cost data and additional information shown in this section are cited from BCISM
Costbook 2021, published by the Construction Industry Development Board
(CIDB) Malaysia.

ESTIMATING
RULES OF THUMB

66

ADDITIONAL INFORMATION

All cost data and additional information shown in this section are cited from BCISM
Costbook 2020, published by the Construction Industry Development Board
(CIDB) Malaysia.

UNIT
CONVERSION

67

ADDITIONAL INFORMATION

All cost data and additional information shown in this section are cited from BCISM
Costbook 2020, published by the Construction Industry Development Board
(CIDB) Malaysia.

UNIT
CONVERSION
(CONT'D)

68

ADDITIONAL INFORMATION

All cost data and additional information shown in this section are cited from BCISM
Costbook 2020, published by the Construction Industry Development Board
(CIDB) Malaysia.

WEIGHTS AND
MEASURES

69

ADDITIONAL INFORMATION

All cost data and additional information shown in this section are cited from BCISM
Costbook 2020, published by the Construction Industry Development Board
(CIDB) Malaysia.

WEIGHTS AND
MEASURES
(CONT'D)

70

ADDITIONAL INFORMATION

All cost data and additional information shown in this section are cited from BCISM
Costbook 2020, published by the Construction Industry Development Board
(CIDB) Malaysia.

FORMULAE

71

ADDITIONAL INFORMATION

All cost data and additional information shown in this section are cited from BCISM
Costbook 2020, published by the Construction Industry Development Board
(CIDB) Malaysia.

FORMULAE
(CONT'D)

72

CHAPTERCONSTRUCTION COST ESTIMATING AND TENDER PRCING_SECOND EDITION

7

TENDER PRICING
PROCEDURE
 

AZIRAH ADNAN

Tendering Process
Overview

A tender is a statement issued to a According to Marsh (2003), the specific
person to obtain consent from certain procedure adapted for a tender process will
parties. It is also an invitation from the depend on the following characteristics,
owner to the contractor to execute some namely:
work at a specified cost at a specified
time. i.Type of tender to be made
ii. Number of tenderers selected
A tender includes several stages and iii.Contract conditions
procedures which are the process of iv. Either the process involves a single stage
documentation, the process of selection or two stages
and evaluation of contractors, and the v.Accountability required
process of determining the best contract vi. The expected value of the tender
price that can be agreed upon as well as vii.Tenderer's location (local or international)
the most relevant completion time for viii. Project location
the completion of a construction project ix. Selection criteria (quality and price or price
(Mohamed, 2002). only)

The tender process can also be In general, the main purpose of the tendering
summarized as a system for selecting process is to select the most qualified
contractors to carry out construction contractor and to obtain a tender that can be
contract work. agreed and accepted by both parties involved.
And, with the help of the tender, the client

can compare different prices quoted by
various contractors for work. It is always the
low price and experienced contractor wins the
tender.

The tendering process in construction plays
an important role in the selection of the
cheapest and most quality bidder for work.

73

Characteristics of
Tenders

Some of the most important 6 Tenders are generally
characteristics of tenders are: advertised in a different local

All potential contractors media and newspapers, to

1 and suppliers must submit allow all interested contractors

their bids within the an opportunity to bid for the
deadline decided on by the
client.

project.

2 The bid (tender papers)
must include all the

required and relevant

details about the materials

to be used, the expected

cost of the project, etc.

3 After the deadline has
passed, all bids are

evaluated by the client

based on a set of

predetermined criteria such

as price and quality.

4 The process of tendering
starts with an invitation to

tender or a request for

tender (RTF).

5 It ends with the public
evaluation process and

follows by which one of the

contractors that submitted a

tender wins the project or

contract.

74

Advantages of Tendering In
Construction

1 No Nepotism 3 Encourages Competition

Tenders or bids are evaluated based The process of tendering helps to
on certain predetermined criteria, promote a competitive market. This is
such as price, quality, and value for because several potential contractors,
money. In other words, the agency firms, or suppliers get a chance to bid
which offers the best quality product for every project.
or service at the lowest price point
would win the contract or tender. And because selection depends on
quality and price, every bidder tries to
2 Value for Money reduce operational costs and labor costs
as much as possible to lower expenses
For the client, tenders give the and improve quality. This entire process
greatest value for the amount of encourages healthy competition in the
money spent. This is because the market and prevents laziness and
client can choose potential provides a boost to innovation and new
contractors to select the ones that ideas.
can produce the highest quality
product or service at the lowest price 4 Easier Entry for New Contractors
point. This allows the government or
company to save money without The system of tendering makes it
having to compromise on quality. possible and simpler for new firms to
enter the market or even a particular
industry. This is because contracts
under these systems are awarded based
on predetermined, objective criteria.

This process helps new firms to quickly
get a foothold in the market or industry,
thus significantly lowering the
traditional barriers to entry.

75

TENDER PRICING PROCESS

By referring to Mohemad, Hamdan, Othman, and Noor (2011), the selection of the most
qualified contractor is still one of the most critical issues to fulfill a successful project. Usually,
the main tendering process can be outlined as:

i.Tender Specification Preparation
Usually involves a preliminary
discussion between the
client/owner and consultants to
set an agreed tender
documentation

ii. Invitation To the Tender
Tenderers are invited to present
offers depending on the chosen
type of tender
(Such as open, restricted, or
negotiated)

iii. Submission of the Tender
Documents by The Contractors

Interested contractors can apply
for the tender by submitting their
bids and qualification on tender
documents.
Usually, the client does not open
the bids until the end of the
offering time.

iv.Tender Evaluation Detailed Tendering Process
A group of experts appointed by
the owner and the consultant
assesses the bids according to
predefined evaluation criteria

v.Tender Award
At the end, the most qualified
contractor is awarded.

Main Tendering Process

76

TENDER PRICING PROCESS (CONT'D)

Tender Pricing Process

Generally, the tender pricing process by In addition, the contractor must also
the contractor will begin after the visit the construction site directly
tender document has been obtained because the condition of the site will
from the client. also affect the construction cost of a
project. Site conditions such as
In the tender pricing process, the topography, presence of old services
contractor needs to be careful and alert pipes, condition of adjacent buildings
to several factors such as required and so on will also increase the cost of
material specifications, required the project.
construction methods construction
drawings bills of quantities, and the The site location also plays an
measurement methods, preambles, important role in determining the
preliminaries, and other documents that construction price where if the project
will affect the construction costs. site is far inland, then temporary roads
need to be built to allow machinery and
In a construction project, normally the materials to be brought to the
cost of foundation construction is the construction site.
highest because many unexpected
things can happen such as the presence With careful preparation and planning
of groundwater, boulders, and unstable and considering all the important
soil. factors, the construction costs can be
planned and managed efficiently, and
Therefore, before pricing the tender, the the risk of abandoned projects will be
contractor should review the project reduced.
site investigation report to plan the
most economical construction method
and to estimate any contingent costs
that might be involved.

77

TYPES OF TENDER PRICING

Way to fill out tender or pricing the work in the tender documents depending on the type of
tender for the project. In general, commonly used contract are

Contract based on bills of quantities and Contract based on drawings and specifications

1 Tender Pricing for Contract based
on bills of quantities

Bills of quantities are the list Later, the total price of a General Summary will
that shows measured be transferred to the Summary of Tender and the
quantities of materials Summary of Tender prices will eventually be
required for completing the transferred to the Form of Tender.
project. The first duty of the Figure below shows the flow chart of Tender
tenderer is to fill the rate Pricing for Contract based on bills of quantities
column for any item consist in
the bills of quantities. Then Tender Pricing for Contract based on bills of quantities
the rate will be multiplied by
the quantit ycolumn of each
item to get the total price for
the items.

If the bills of quantities for a
building element are more
than one page, the total price
of each page will be moved to
Page Collection at the end of
the element. The total price
from the Page Collection will
be transferred to General
Summary to get a total price
for the entire buildings
element.

78

TYPES OF TENDER PRICING

1 Tender Pricing for Contract based
on bills of quantities (Cont'd)

Example of Tender Pricing for contract based on Bills of Quantities process

FIRST STEP:

Pricing the rate for each item in
the Bills of Quantites. (If the bills
of quantities for a building
element are more than one page,
the total price of each page will
be moved to Page Collection at
the end of the element).

Page Collection

79

TYPES OF TENDER PRICING

1 Tender Pricing for Contract based
on bills of quantities (Cont'd)

Example of Tender Pricing for contract based on Bills of Quantities process

SECOND STEP:

The total price
from the Page
Collection will be
transferred to
General Summary
to get a total price
for the entire
buildings element.

General Summary

80

TYPES OF TENDER PRICING

1 Tender Pricing for Contract based
on bills of quantities (Cont'd)

Example of Tender Pricing for contract based on Bills of Quantities process

THIRD STEP:
The total price of a
General Summary
will be transferred
to the Summary of
Tender.

Summary of Tender

81

TYPES OF TENDER PRICING

1 Tender Pricing for Contract based
on bills of quantities (Cont'd)

Example of Tender Pricing for contract based on Bills of Quantities process

FINAL STEP:

The total price from the Summary
of Tender prices eventually be
transferred to the Form of Tender.

Part of Form ofTender 82

TYPES OF TENDER PRICING

2 Tender Pricing for Contract based
on drawings and specifications

A brief description of the proposed Any works specified in the tender
building and associated works are must be priced in the Tender
specified in the Tender Summary. Summary in a lump sum figure.
Contractors should refer to the Contractors must understand the
accompanying drawings and scope of work involved and take into
specifications for complete account all the work that needs to be
information about the work involved. done in determining prices for the
work described.

The figure below shows the Tender Summary for contracts based on drawings and
specifications.

Tender Summary If the Tender Summary
is more than one page,
the price of each page
should be brought to the
General Summary for
adding all the prices
involved.

The next step is the
total price in the
General summary will be
transferred to the Form
of Tender.

Price stated in the form
of Tender is called
Tender Price.

83

LET'S
DO

SOME

ACTIVITY

ACTIVITY 1

By using approriate exampels of tender
document as illustration, prepare a flow
chart that indicates the tender pricing
process for tender for Contract based on Bill
of Quantities.

ACTIVITY 2

By using approriate exampels of tender
document as illustration, prepare a flow

chart that indicates the tender pricing
process for tender for Contract based

on Drawings and Specification.

ACTIVITY 3

Diiferrentiate THREE main features of tender
pricing process for Contract based on Bill of
Quantities and tender pricing process for
Contract based on Drawings and Specification.

84

REFERRENCES

Main Reference:
Abdullah, A. (2005). Anggaran Kos Kerja Bangunan: berdasarkan SMM2. Petaling
Jaya, Selangor: Pearson/Prentice Hall.

Additional References:
Jaafar, M. (2013). Elementary Estimating for Building Works. Pulau Pinang: Universiti
Sains Malaysia.
Mohemad, R., Hamdan, A. R., Othman, Z. A., & Noor, N. M. M. (2011, June). Modelling
ontology for supporting construction tender evaluation process. In 2011
International Conference on Semantic Technology and Information Retrieval (pp. 282-
288). IEEE.
Marsh, C. (2003). Building services procurement. Routledge.
Abourizk, S., & Mohamed, Y. (2002, December). Optimal construction project
planning. In Proceedings of the Winter Simulation Conference (Vol. 2, pp. 1704-1708).
IEEE.
BCISM (2021). BCISM Costbook 2021.CIDB Malaysia

ii

CONSTRUCTION COST ESTIMATING

AND TENDER PRICING

SECOND EDITION

This book is prepared for reference for those who are studying in quantity
surveying, construction management, building surveying, architecture and
civil engineering field. The content of this book mainly focuses on the
syllabus for construction costs estimating for polytechnic students in
Malaysia.

This book started with an introduction to construction cost estimating,
followed by the example of cost estimation for major building works which
are excavation, concrete, reinforcement, and formworks. The book has also
been improved in terms of information on cost data for the latest
construction prices as well as some useful information in the built-up rates
preparation. The last section of this book is a brief explanation of the
tendering process and also the difference in tender pricing procedure for
tender based on bills of quantities and tender pricing for tender based on
drawings and specifications. In addition, this book also consists of practice
questions for each topic that can increase the knowledge and skills of
students to prepare the building cost estimation and tender pricing more
accurately.

Azirah Adnan is a lecturer in Quantity Surveying programe at
Politeknik Sultan Azlan Shah and she holds a Master of Science in
Green Architecture, Bachelor in Quantity Surveying with Honors and a
Diploma in Quantity Surveying from UiTM.