CONSTRUCTION ESTIMATES REVIEWER

ESTIMATE - an assessment of the probable total cost of some future

activity.

GENERAL REQUIREMENTS & PRELIMINARIES

1. PERMITS AND CLEARANCES

Building Permit. An official approval issued by the local governmental

agency that allows you or your contractor to proceed with a construction
or remodeling project on your property. It is intended to ensure that the
project plans to comply with local standards for land use, zoning, and
construction.

Zoning Permit. Document issued by a local (municipal) government or

authority permitting a parcel of land to be used for a prescribed purpose.

Fire Permit. Fire permits give permission to: use, handle, maintain, and
store flammable materials; conduct certain activities that will cause
conditions that may present a hazard to people or property; and/or install
or remove equipment that is connected with these activities.

Sanitary Permit. The official document issued to authorize a health-

regulated establishment to operate, after it has been determined to have
met the minimum requirements for the sanitary operation of its type of
business.

Electrical Permit. Electrical permits are required by the city to assure that
electrical installations and repairs are performed by licensed personnel,
and that the installations are in compliance with city codes. They are
required for the installation, alteration, replacement or repair of electrical
and communications wiring and equipment within or on any structure and
for the alteration of an existing installation.

Mechanical Permit. A mechanical permit enables you to install new

mechanical equipment such as heating, venting, and air conditioning

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 (HVAC) equipment and kitchen hood exhaust systems.

Barangay Clearance. It is used to certify a person with good moral

character and a law-abiding citizen of a certain barangay.

Locational Clearance. A pre-requisite in the issuance of Building Permit

to ensure its conformity with the City's Comprehensive Land Use Plan and
Zoning Ordinance.
2. PLANS, CONTRACT DOCUMENTS

PLANS & DRAWINGS

Titles & Legends (T). Cover sheet, name of project, names of consultant,
location/vicinity map, table of contents and legends.

Demolition Drawings (D). Prepared by the specific engineering trade.

Topographic Survey (TS). Property lines, roadways, and utilities

prepared by a surveyor.

Soil Bearing Data (SB). Location of Bore Holes, for soil sampling and
testing which is normally prepared by the geotechnical engineer.

Landscape (L). Prepared by landscape architect to include site work and

finished landscaping or ground cover.

Architectural Drawings (A). Prepared directly by the architect to include

site work and finished landscaping or ground cover.

Structural Drawings (S). Prepared by the structural engineer, which

include foundation plans, floor framing plans, lay-outs, roof framing
plans, and all the works necessary to support the structure.

Plumbing (P). Prepared by the sanitary engineer which include water pipe
supply, drainage, and waste pipe network, isometric sections.

Electrical (E). Prepared by electrical engineer which include power and

lighting layouts, riser diagrams, telecommunication systems, security, and
audio-visual support system.

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 Fire Protection (FP). Prepared by the mechanical engineer which
includes ventilating and air-conditioning system for building elevators,
and escalators.

DOCUMENTS

Invitation to Bid. A call to contractors to submit a proposal on a project

for a specific product or service.

Bid Proposal. a document, produced by a company that provides goods or

a service, like construction, and is sent to potential contractors, with the
intention of encouraging them to agree to complete a project.

Bid Documents. Documents required to be submitted in response to an

invitation to bid (ITB). These include the prescribed bid form, drawings,
specifications, time lines, charts, price breakdowns, etc.

CONTRACT DOCUMENTS

Contract Agreement. A document that sets a date and specifies which

parties are going to participate in the construction process.
TYPES OF AGREEMENTS:
Lump-Sum Agreement – the contractor agrees to construct the
project in accordance with the contract documents, for a set price
arrived at through competitive bidding or negotiation. The contractor
agrees that the work will be satisfactorily completed regardless of the
difficulties encountered. This type of agreement provides the owner
advance knowledge of construction costs and requires the contractor
to accept the bulk of the risk associated with the project.

Unit-Price Agreement – the contractor bases the bid on estimated

quantities of work and on the completion of the work in accordance
with the contract documents. The owner of the contracting agency
typically provides the quantity takeoff.

Cost-Plus-Fee Agreements - the contractor is reimbursed for the

construction costs as defined in the agreement. However, the

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 contractor is not reimbursed for all items, and a complete
understanding of reimbursable and non-reimbursable items is
required. This arrangement is often used when speed, uniqueness of
the project, and quality take precedence. This contract arrangement
allows for construction to begin before all the drawings and
specifications are completed, thus reducing the time required to
complete the project.

Percentage Fee. The advantage of the percentage fee is that it

allows the owner to save fees paid to the contractor when
construction costs go down. The major disadvantage is that the
fee increases with construction costs, so there is little incentive
on the contractor’s part to keep costs low. The primary incentive
for a contractor to keep costs under control is the maintenance of
her reputation.

Fixed Fee. The advantage of the fixed fee is that it removes

the temptation for the contractor to increase construction costs to
increase his fee. The disadvantage is that the contractor has little
incentive to keep the costs low, because the fee is the same if the
project is over budget as it is if the project is under budget.

Fixed Fee with Guaranteed Maximum Cost. Advantages

of this fixed fee with a guaranteed maximum cost (g-max) are
that a guaranteed maximum cost is assured to the owner, and it
generally provides an incentive to contractors to keep the costs
down since they share in any savings. Again, the contractor
assumes a professional status. Disadvantages are that drawings
and specifications must be complete enough to allow the
contractor to set a realistic maximum cost.

Sliding Scale Fee. The sliding scale fee provides an answer

to the disadvantages of the percentage fee, because as the cost of
the project increases, the percent fee of construction decreases.
The contractor is motivated to provide strong leadership so that
the project will be completed swiftly at a low cost. The
disadvantage is that extensive changes may require
modifications of the scale.

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 Fixed Fee with a Bonus and Penalty. With this type of
fixed fee, the contractor is reimbursed the actual cost of
construction plus a fee. A target cost estimate is set up; and if the
cost is less than the target amount, the contractor receives a
bonus in the form of a percentage of the savings. If the cost goes
over the target figure, there is a penalty (reduction of
percentage).

AGREEMENT PROVISIONS:

Scope of the Work. The project, drawings, and specifications are

identified; the architect is listed. The contractor agrees to furnish all
material and perform all of the work for the project in accordance
with the contract documents.

Time of Completion. The agreement should specify the starting and

completion time. Starting time should never precede the execution
date of the contract. The completion date is expressed either as a
number of days or as a specific date. If the number of days is used, it
should be expressed in calendar days and not working days to avoid
subsequent disagreements about the completion date. Any liquidated
damages or penalty and bonus clauses are usually included here; they
should be clearly written and understood by all parties concerned.

Contract Sum. Under a lump-sum agreement, the contract sum is the

amount of the accepted bid or negotiated amount. The accepted bid
amount may be adjusted by the acceptance of alternates or by minor
revisions that were negotiated with the contractor after receiving the
bid. In agreements that involve cost-plus conditions, there are
generally articles concerning the costs for which the owner
reimburses the contractor. Customarily, not all costs paid by the
contractor are reimbursed by the owner; reimbursable and non-
reimbursable items should be listed. The contractor should be certain
that all costs incurred in the construction are included somewhere.
Also, in cost-plus-fee agreements, the exact type of compensation
should be stipulated.

Progress Payments. Because of the cost and duration of construction

projects, contractors must receive payments as work is completed.

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 These payments are based on the completed work and stored
materials. However, the owner typically retains a portion of all
progress payments as security to ensure project completion and
payment of all contractor’s financial obligations. The due date for
payments is any date mutually acceptable to all concerned. In
addition, the agreement needs to spell out the maximum time the
architect/engineer can hold the contractor’s application for payment
and how soon the owner must pay the contractor after the architect
makes out the certificate of payment. There should also be some
mention of possible contractor action if these dates are not met.
Generally, the contractor has the option of stopping the work. Some
contracts state that if the contractor is not paid when due, the owner
must also pay interest at the legal rate in force in the locale of the
building.

Retained Percentage. It is customary for the owner to withhold a

certain percentage of the payments, which is referred to as retainage,
and is protection for the owner to ensure the completion of the
contract and payment of the contractor’s financial obligations. The
most typical retainage is 10 percent, but other percentages are also
used. On some projects, this retainage is continued through the first
half of the project, but not through the last half. In some states, the
retainage is set by statute and limits the owner’s liability for the
nonpayment to subcontractors and suppliers to the amount retained.
In these states, if the owner retains less than the percentage specified,
liability is still the amount set by statute.

Schedule of Values. The contractor furnishes the architect/engineer

with a statement, called a schedule of values, that shows sales prices
for specific items within the project. This statement breaks the project
into quantifiable components. Contractors typically overvalue the
initial items on the project. This practice is referred to as frontend
loading.

Work in Place and Stored Materials. The work in place is usually

calculated as a percentage of the work that has been completed. The
amounts allowed for each item in the schedule of values are used as
the base amounts due on each item. The value of the work completed
is equal to the work in place for each line item in the schedule of

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 values multiplied by the sales price or the value for that line item.
The contractor may also receive payment for materials stored on the
site or some other mutually agreed upon location. The contractor may
have to present proof of purchase, bills of sale, or other assurances to
receive payment for materials stored off the job site.

Acceptance and Final Payment. The acceptance and final payment

sets a time for the final payment to the contractor. When the final
inspection, certification of completion, acceptance of the work, and
required lien releases are completed, the contractor will receive the
final payment, which is the amount of retainage withheld throughout
the construction period. Many agreements are set up so that if full
completion is held up through no fault of the contractor, the architect
can issue a certificate for part of the final retainage.

General Conditions. This contract document defines obligations

regarding the execution of the project as well as each party's rights.
Overhead costs, what to claim, and your entitlements are included in this
portion of the contract.

Special Conditions. This is usually an extension of the contract and an

addendum to the general conditions. It should specify certain conditions
and clauses that pertain to each particular project or job.

Bill of Quantities. This document is formed by the list of diverse trades

and materials that will form part of the construction. Sometimes this
document is not required by the contracting officer.

Drawings. All contracts should include a set of drawings that form part of
the job to be performed. These drawings are usually the latest and most
recent available and must be received by the contractor prior to the date of
commencement. They must include all drawings from consultants, and
they'll constitute the entire project that's being contracted.

Specifications. Specifications are written instructions concerning project

requirements that describe the quality of materials to be used and their
performance.

Construction Schedule. The construction schedule is an important

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 component of the document. The contracting office will know how and
when the project will be completed by reviewing this part. Construction
contracts sometimes require updated schedules throughout the
construction progress, and they might form part of the monthly or agreed
term for application for payments.

Costs in the Construction Industry. This is a breakdown of all items

being incorporated into the construction project. It's usually the base of the
application for payment. It can be detailed per item or in a lump sum form
that doesn't specify individual items.

Construction Bonds & Insurances. An essential part of the contract

because it provides a guarantee to the owner that the contractor has the
means and the economic backup to perform under the terms of the
construction contract. It will include specific types of coverages, required
bonding, and all insurance protections available to the owner, the
contractor and third parties.

Addenda. The addenda statement is a drawing or information that

modifies the basic contract documents after they have been issued to the
bidder, but prior to the taking of bids. They may provide clarification,
correction, or changes in the other documents.

3. BONDS AND INSURANCES

BONDS:
Often referred to as surety bonds, bonds are written documents that
describe the conditions and obligations relating to the agreement. (In law,
a surety is one who guarantees payment of another party’s obligations.)
The bond is not a financial loan or insurance policy but serves as an
endorsement of the contractor. The bond guarantees that the contract
documents will be complied with, and all costs relative to the project will
be paid.

Bid Bond. The bid bond ensures that if a contractor is awarded the bid
within the time specified, the contractor will enter into the contract and
provide all other specified bonds. If the contractor fails to do so without
justification, the bond will be forfeited to the owner. The amount forfeited

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 will in no case exceed the amount of the bond or the difference between
the original bid and the next highest bid that the owner may, in good faith,
accept.

Performance Bond. The performance bond guarantees the owner that the
contractor will perform all work in accordance with the contract
documents and that the owner will receive the project built in substantial
agreement with the documents. It protects the owner against default on the
part of the contractor up to the amount of the bond penalty. The warranty
period of one year is usually covered under the bond also. The contractor
should check the documents to see if this bond is required and in what
amount, and must also make the surety company aware of all
requirements.

Labor and Material Bond. The labor and material bond, also referred to
as a payment bond, guarantees the payment of the contracto’s bill for labor
and materials used or supplied on the project. It acts as protection for the
third parties and the owner, who are exempted from any liabilities in
connection with claims against the project. In public works, the statutes of
that state or entity will determine whether a specific item of labor or
material is covered.

Subcontractor Bonds. Performance, and labor and materials

(payment) bonds are those that the subcontractors must supply to the
prime contractor. They protect the prime contractor against financial loss
and litigation due to default by a subcontractor. Because these bonds vary
considerably, prime contractors may require the use of their own bond
forms or reserve the right of approval of both the surety and form of the
bond. These types of bonds are often used when the general contractor is
required to post a bond for the project. This arrangement protects the
general contractor, reduces risk, and allows the general contractor greater
bonding capacity.

License or Permit Bond. The license or permit bond is required of

the prime contractor when a state law or municipal ordinance requires a
contractor’s license or permit. The bond guarantees compliance with
statutes and ordinances.

Lien Bond. The lien bond is provided by the prime contractor and

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 indemnifies the owner against any losses resulting from liens filed against
the property.

INSURANCES:
Insurance is not the same as a bond. With an insurance policy, the
responsibility for specified losses is shouldered by the insurance company.
In contrast, with a bond, the bonding companies will fulfill the obligations
of the bond and turn to the contractor to reimburse them for all the money
that they expended on their behalf.

Workers’ Compensation Insurance. A workers’ compensation insurance

policy provides benefits to employees or their families if they are killed or
injured during the course of work.

Builder’s Risk Fire Insurance. Builder’s risk fire insurance protects

projects under construction against direct loss due to fire and lightning.
This insurance also covers temporary structures, sheds, materials, and
equipment stored at the site.

Other policies that fall under the category of project and property
insurance are as follows:
1. Fire insurance on the contractor’s buildings
2. Equipment insurance
3. Burglary, theft, and robbery insurance
4. Fidelity insurance, which protects the contractor against loss caused by
any dishonesty on the part of employees

4. SAFETY EQUIPMENTS

Eye and Face Protection

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 Safety glasses or face shields are worn any time work operations can
▪

cause foreign objects to get in the eye. For example, during welding,
cutting, grinding, nailing (or when working with concrete and/or
harmful chemicals or when exposed to flying particles). They must
be worn when one is exposed to any electrical hazards, including
working on energized electrical systems.
Foot Protection
▪ Construction workers should wear safety shoes or boots with slip-

resistant and puncture-resistant soles.

▪ Safety-toed footwear is worn to prevent crushed toes when working

around heavy equipment or falling objects.

Hand Protection
▪ Construction workers must wear gloves that fit snugly.

▪ Workers should also wear the right gloves for the job (examples:

heavy-duty rubber gloves for concrete work; welding gloves for

welding; and insulated gloves and sleeves when exposed to electrical
hazards).
Head Protection
▪ Workers must wear hard hats where there is a potential for objects

falling from above, bumps to the head from fixed objects, or of

accidental head contact with electrical hazards.
Hearing Protection
▪ Workers must use earplugs/earmuffs in high noise work areas where

chainsaws or heavy equipment are used;

Lung Protection
▪ In Oxygen-deficient atmospheres such as dusty, gaseous, and vaporous

areas, construction workers must be provided with RPE such as

respirators which fit properly.
Whole Body Protection
▪ Conventional or disposable overalls, boiler suits, aprons, chemical suits

must be used for environments which contain a lot of heat, chemical

or metal splash, spray from pressure leaks or spray guns, and
contaminated dust.
▪ Workers must wear clothing which fully covers the arms and legs such

as long-sleeved shirts and thick full-length pants.

5. TEMPORARY FACILITIES

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 Temporary Buildings, Enclosures, and Facilities
• Temporary fences
• Temporary sheds
• Storerooms
• Storage and handling
• Temporary enclosures
• Ladders and stairs—used prior to permanent ones being installed
• Temporary partitions—used to separate new construction from
existing facilities
• Temporary closures for doors and windows
• First aid
• Construction elevators, hoists, and cranes
• Noise control
• Dust control
• Water control
• Telephone
• Heat
• Lights and power
• Computers
• Stationery
• Project sign and associated signage
Temporary Office
• Job office
• Office for architect/inspector
Temporary Utilities
• Toilets
• Water

6. CLEARING

Site Clearing. The process of clearing away the vegetation and surface
soil of the construction site.
• Clearing Vegetation – clearing undergrowth, cutting trees, etc.
• Clearing Surface Soil - surface soil is loosened, removed, and

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 transported

7. MANAGEMENT
Project Sponsor. Often in a large organization, a high-level person,
possibly a senior manager or director, will act as the project sponsor. They
exist to take ownership of the business opportunity or need and take it
forward to ensure the issues are dealt with and the benefits realized while
being able to resolve matters outside of the control of the project manager.
Project Manager. The project manager is the center of this project. This
person is the planner (including maintaining the Gantt chart), the organizer
and implementer and the one who has to have the project management
skills to ensure everything, including success, is measured and reported
accurately.
Project Customer/Client. The Client is the person/company for which
the building is being built. The Client will define the aesthetic and
functional needs for their building. They usually rely on experts to select
products, Clients only get involved because of special requirements such
as sustainability or life time value/costs.
The Project Board. The groups mentioned prior usually form the Project
Board. The board usually has key people who can be seen to represent the
different interests in the project. These are often viewed in groups made up
of:
• Supplier groups

• User groups

Project Coordinator. Big projects may also benefit from a project

coordinator to help with the admin. This ensures the mundane, yet vital,
tasks get done. This can cover minutes of meetings, invoicing, or the
stationery order.
Suppliers. A provider of services or goods either directly to the employer
or to another supplier in a supply chain. The 'supply chain' is the
interconnected hierarchy of suppliers.
Specialist Consultants. Specialist Consultants will be interested in how
your product meets performance and safety requirements. Requirements
can present conflicting demands and the consultant may then advise on the
best way to achieve a result – that is suggest products.
Construction Manager. Also known as a site manager, is required to
supervise and direct various operations within a building project. A
Construction Manager must ensure a project is completed safely, making
sure the project runs on time and within the allocated budget allowance.

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 Architect. The Architect develops the buildings’ design, taking the
Client’s brief and combining it with the advice of the Specialist
Consultants. This then has to be developed to meet the requirements of the
Building Regulations and increasingly sustainability.
Engineer. Working with the architect will be a number of engineers that
are responsible for structural, mechanical and electrical design. The
Structural Engineer is a key member of the Project Team. Structural
Engineers design the skeleton or structure of the building, enabling
Architects to focus their talents on creating a design that satisfies their
client’s demands.
Contractor. The Contractor oversees and manages the construction of the
building for the Client, following the Architect and Engineers’ designs.
The work is delivered under a contractual agreement. The Main
Contractor will select Sub-contractors based on the capability, availability
and price. Sub-contractors include many specialist trades.
Workers under the Contractor:
Construction Carpenter. Carpentry typically deals with cutting, shaping,
and installing materials during the construction phase; it’s the primary
hammer-and-nail, drilling-and-sawing part of the job.
Construction Electrician. An electrician installs wiring or circuitry and
are also responsible for total remodels of electrical systems. They’re
needed in the building and/or rebuilding of literally any structure that
features lighting.
Mason. Masons work with materials such as brick, marble, and concrete
blocks.
Plumber. Construction plumbers are in charge of installing and/or
reworking the systems used for drinking water, sewage, and draining.
Welder. Welders use machines called welding power supplies–which blast
a superheated electrical current–to fuse materials together.
Glazier. Glaziers cut and install glass.
Plasterer. A plasterer works with plaster—the protective coating on walls
and ceilings.

8. HEAVY EQUIPMENT AND MACHINERIES

Excavators. Their general purpose is to excavate but other than that they
are also used for many purposes like heavy lifting, demolition, river
dredging, cutting of trees etc.
Backhoe. This is well useful for excavating trenches below the machine
level and using front bucket loading, unloading and lifting of materials can

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 be done.
Dragline Excavator. It generally used for larger depth excavations and
the construction of ports, for excavations under water, sediment removal
in water bodies etc.
Bulldozers. Are another type of soil excavating equipment which are used
to remove the topsoil layer up to particular depth. These are widely used
for the removal of weak soil or rock strata, lifting of soil etc.
Graders. Are also called as motor graders and are another type of
equipment used in construction especially for the construction of roads. It
is mainly used to level the soil surface.
Wheel Tractor Scrapers. These are earth moving equipment used to
provide flatten soil surface through scraping.
Trenchers. Trenchers or Trenching machines are used to excavate
trenches in soil. These trenches are generally used for pipeline laying,
cable laying, drainage purposes etc.
Loaders. Are used in construction site to load the material onto dumpers,
trucks etc.
Tower Cranes. Are fixed cranes which are used for hoisting purposes in
construction of tall structures.
Dump Trucks. Are used in construction sites to carry the material in
larger quantities from one site to another site or to the dump yard.
Pile Boring Equipment. Is used to make bore holes in the construction
site to install precast piles.
Pile Driving Equipment. This equipment lifts the pile and holds it in
proper position and drives into the ground up to required depth.

9. DISPOSAL (WASTE MANAGEMENT)

ELIMINATING WASTE. Some waste generated in the process of
construction can be eliminated. For example, durable modular metal form
systems for use in concrete construction may be selected on the basis of
being readily demountable and reusable on other projects, thus eliminating
wood waste associated with formwork fabricated of plywood and
dimensional lumber. Elimination of waste can be beneficial to reduce
impacts on human health and the environment.
MINIMIZING WASTE. Some building-related waste can be minimized.
For example, construction products can be selected on the basis of its
being designed and manufactured to be shipped with minimal packaging.
Also consider that selection and use of recyclable materials and products
offers potential to minimize waste.

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 REUSING MATERIALS. Some materials can be reused. For example,
doors and windows in good, resalable condition might substitute for new
products, or be donated and or sold for use on another project—a form of
beneficial reuse.

10. QUALITY ASSURANCE & CONTROL

Quality Assurance:
• Specifies Standards - aims to ensure that the quality procedures
implemented during the design phase of a construction project
effectively meet the company-established standards for quality
service, performance and production.
• Provides method - defines a methodology that enables your team to
evaluate and identify construction standards that best satisfy: building
code specifications, legal provisions, construction safety necessities
and customer quality expectations.
• Establishes processes - crafts procedures that enable management
and work crews to identify properly qualified suppliers.
Quality Control:
• Verifies compliance to standards - ensures that materials used on the
project actually comply with properly signed drawings and plans, and
that task-specific personnel actually perform construction project
processes according to the specified QA standards
• Ensures accurate application - verifies correct applied quality
methodology, material selection, and labor performance efficiency,
and is also responsible for testing finished goods and services to
ensure compliance to the QA standards.
• Selects according to established standards - examines the
established QA standards, certifies that prospective suppliers meet the
criteria, and follows through by testing supplied parts and services as
dictated by the existing company-establish construction project QA
program.

11. MOBILIZATION/DEMOBILIZATION
Mobilization. Activation of a contractor’s physical and manpower
resources for transfer to a construction site until the completion of the
contract.
Demobilization. The departure of contractor's personnel and contractor
equipment from the worksite upon completion of assignment or

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 suspension or termination of the services by company. Contractor's
personnel and the contractor equipment are considered as demobilized
when contractor's personnel and the contractor equipment leave the
worksite (in the case of contractor's personnel) or are removed from the
worksite (in the case of the contractor equipment), each as designated by
company, at which time all charges as described herein will cease unless
otherwise stipulated herein.

12. SITE SURVEY

A thorough site survey covers all aspects of a building site, including:
• Establishing and marking boundaries

• Calculating a land parcel's size and shape

• Taking note of the natural landscape within and surrounding a property

• Measuring and marking land contours

Site surveys are needed for a variety of reasons. Most commonly, they are
needed for:
• Purchasing land

• Subdividing a parcel of land

• Obtaining development approval

• Getting a building permit

• Marking boundaries

13. RESTORATION
Restoration. The process in which you return the building to its original
condition.
Renovation. The process of renewing a building or structure by fixing
what's already present and in some cases adding new components.
Remodel. Involves changing an entire room or building. Remodeling
tends to be a much more involved process than restoring or renovating, as
it involves making changes to a building's structure. Examples or
remodeling include:
• Expanding the square footage of a building
• Gutting, removing, or adding walls
• Raising ceilings
• Adding plumbing
• Adding heating/cooling ducts

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