Project Costing for a Road Construction project †Free Samples

Question: Discuss about the Project Costing for a Road Construction project. Answer: Introduction The organization, X Consult (XC) has primarily been involved in consultancy contracts in the engineering and construction sector, mainly in design development and providing guidance to various organizations on how to develop designs. However, as with all organizations, it is important that the company evolves and continues to grow by taking advantage of existing opportunities in the market. This calls for venturing into the complex but highly lucrative road construction sector, which, in addition, to being lucrative, carries a new set of risks the company must be conversant with. Because all projects have risks, this report provides an analysis and evaluation of all the risks inherent to the road construction project that the company intends to bid. The report commences by summarizing the risks inherent in road construction projects by developing a risk assessment for contracting such work. This is then followed by a cost estimate for preparing such a bid and the departments that wil l be involved to give the company and board an understanding of the cost implication for bidding for such works. A schedule for the bid preparation will then be prepared and an appendix that summarizes the three projects background will be discussed, in the context of encountered risks for such a construction project. Risk Assessment in the Road Construction Sector The table below is a table detailing the risk assessment for road construction projects Risk Description Consequences of risk Risk probability Risk severity Overall Risk profile Mitigation measures against risk Defective materials used in road construction Poor quality roads that fail to meet quality standards leading to major reworks or failure to accept completed project by client or extensive reworks H VH H Quality management plan Inspection of raw materials frequently before procurement and after Safe storage of materials to ensure weather induced damage is limited Testing at various stages on quality of roads (Asphalt quality tests) (Muhamid 2011) Overshooting project time line Late delivery of projects characterized by increased costs and client displeasure VH VH VH Use of project management techniques and tools such as project management software to mitigate risks Developing a detailed work breakdown structure and following a work progress plan Effective planning of the project scope and minimizing scope changes Meet regularly to discuss progress of project on what has been done and what is remaining and compare to the project plan (El-Sayegh Mansour 2015) Overshooting cost/ budget High project costs and loss of support from sponsor leading to failed/ abandoned projects or legal litigation Abandonment of project in extreme cases VH VH VH Use effective and accurate costing methods and cost estimations before project commences when developing project budget Strict control of the project scope Effective management and communication with stakeholders to ensure they support changes (El-Sayegh Mansour 2015) Changes in scope/ design during construction Will lead to budget and time constraints being overshot H VH VH Use modern design principles such as BIM (building information management) and computer aided design Adhere to all set road design rules and regulations Strict management of project scope Use simulation software to test effectiveness of road designs before proceeding with construction Quality management plan that is strictly followed Using quality materials that are tested regularly to ensure quality (Muhamid 2011) Natural/ weather conditions that can affect construction progress Drastic changes in weather, such as heavy rains and landslides/ mud slides will cause delays, result in done work being damaged, and lead to re-works or increased costs VH VH VH Plan for construction when weather forecast show good weather Using quality road construction materials Poor communication with stakeholders This will lead to misunderstanding and poor management of relevant stakeholders, resulting in reduced or loss of support for the project H VH H Develop an effective stakeholder management plan and meet regularly with project team (Muhamid 2011) Unstable and contaminated soil conditions Can cause constructed sections to become damaged requiring massive reworks or occasion massive revisions to work program, budget, and project timelines H VH VH Ensure the soils where the roads are to be constructed are effectively tested before design begins to avoid future reworks Using soil strengthening additives to ensure the roads are of a high quality/ standard Cost Summary for Bid Contract Preparation The costs for preparing the bid contract must be estimated in the context of the activities to be undertaken and the stages involved in its construction. The first stage will entail a feasibility study, after the purchase/ acquisition of the relevant project documents. This will be followed by undertaking surveys in the subject areas and doing tests and surveys to help with the design of the road. The information from the surveys, including traffic survey (Traffic count) and tests undertaken on the site souls will then be used to outline proposals for the construction. The proposals will then be used for developing preliminary designs for the road, followed by a detailed road design. The detailed design will then be tested through simulations using computer aided tools and systems. This will be followed by a cost estimation using relevant costing techniques. The XC staff will then undertake the relevant documentation to attach to the design to complete the tender document ready for s ubmission, accompanied by visual presentations to the client. These tasks and their costs are detailed in the table below; by department Activity Department/ team to Undertake Activity Duration Unit Cost (per duration such as per hour) Total Costs in $ Acquiring tender documents Design One day @ 50 100 Purchasing project equipment and vehicles Administration Five Days 25000 Feasibility Study Civil engineering department with a civil engineer or two, civil technicians, foremen, and road construction technicians Twenty days Civil engineer pay @ $ 22 per hour Foreman pay @ $ 16 per hour Civil engineering technicians @ $ 12 per hour Road construction technicians @ $ 12 per hour 16000 Site survey and geotechnical surveys Survey Department (8 quantity surveyors) and 4 Civil Engineers plus project manager Sixteen days Chief quantity surveyors @ $ 18 per hour Assistants @ $ 15 per hour 140960 Soil tests 2 civil engineering technicians Twelve Days @ $ 12 for each per hour 76800 Traffic survey/ Count Consultant and survey supervisors plus surveyors Seventeen days @ 25 per hour for consultant @ $ 18 for survey supervisor @ $ 10 for the surveyors/ traffic counting team 14480 Progress review meeting All staff in bidding team Two Days 6000 Preliminary designs Civil engineers (2) Eight days @ $ 25 per hour 28000 Validating Designs Civil Engineering, Surveying, Project management Four Days 6400 Detailed road design Civil engineers (8), Consultant Thirty days @ $ 22 per hour for engineers @ 25 for consultant 48000 Simulation and testing software (cloud SaaS), Consultant input Designers and Consultant Six days @ 50per hour for consultant @ 25 $ Civil engineers 28320 Final documentation preparation Administrator 2 days @ $ 14 per hour 3520 Miscellaneous (Communication, stationery, refreshments) 8000 Total for Bid Schedule for the preparation of the Bids References El-Sayegh, S. M., Mansour, M. H. (2015). Risk Assessment and Allocation in Highway Construction Projects in the UAE. Journal of Management in Engineering. 31, 04015004. Mahamid, I. (2011). Risk matrix for factors affecting time delay in road construction projects: owners' perspective. Engineering, Construction and Architectural Management. 18, 609-617.