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4.contracting

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4.contracting

1. 1. Ahmed Elyamany, PhDNovember 7/10, 2010 1
2. 2.  During the construction of a building project, quantities of excavation = 2000 m3 Equipment crew consists of 1 Excavator with rental rate 700 LE/day 2 Trucks with rental rate 300 LE/day/one Production rate of crew 200 m3/dayEstimate the equipment cost /m3 for this project.
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4. 4.  By the end of this lecture, you will:1. Differentiate between different types of construction contracts.2. Discuss the advantages and disadvantages of construction contracts. 4
5. 5. 1. Price given in advance 1. Lump Sum 2. Schedule of rates 3. Unit price2. Cost reimbursement 1. Target Cost 2. Cost + % fee 3. Cost + fixed fee 5
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16. 16. Example:The following information belong to a target cost contract:Target cost = L.E. 160 M.Cost at the start of target band = L.E. 155 M.Cost at the end of target band = L.E. 165 M.Target fee = L.E. 20 MCost saving share = 60/40, (60% by the client)Cost increase share = 70/30, (70% by the contractor)Required:Calculate the contractors fee for the following cases:I. If the cost of project equals L.E 163 M.II. If the cost of project equals L.E 177 M.III. If the cost of project equals L.E 184M.IV. If the cost of project equals L.E 140 M. 16
17. 17. Solution: If the cost of project equals L.E 163 M. Contractor fee = 20M. If the cost of project equals L.E 177 M. Contractor loss= (177-160)*0.7= 11.9M. Contractor fee= 20-11.9=8.1M. If the cost of project equals L.E 184M. Contractor loss= (184-160)*0.7= 16.8M. Contractor fee= 20-16.8=3.2M. If the cost of project equals L.E 140 M. Contractor excess= (160-140)*0.4= 8M. Contractor fee= 20+8=28M. 17
18. 18. All LittleInformation Informationrequired for required for tender Control Little All Owner Risk Min Max Contractor Risk Max Min Owner Control Easy Hard Control Effort Min Max Design Changes Min Max 18
19. 19. 1.Fluctuating-price2.Firm-price Limited  Full  19
20. 20. Questions? 20