Material Pricing
The price of the materials is calculated in two different methods :-
Lump Sum
It is a process to supply all the Materials in a group. As for instance a steel
supplier may propose to provide all of the structural steel, steel Joists and
roof deck for an approved price.
Unit Price
It is a system provided by the supplier to supply the materials at a price per
unit.
A ready mix concrete supplier may recommend to deliver 3000 psi concrete to the
project for a price of RM 110 per cubic yard.
Quantity TakeOff
It is a procedure to find out the required construction quantities. It can
be segregated into :-
• Forecasting of the quantities of work
• Working out of the prices related
to those quantities
Quantity TakeOff Procedures :-
Classification of work item– for instance : Brick wall section or concrete
footing.
Estimation of quantity varying from linear, area, volume and unit.
After calculating the material take‐off, estimator can
gather brief knowledge on the actual field procedure. Concrete take‐off will commence from volume for
footings, grade beams, slabs and slabs for ground floor etc.
Generally quantity quantity take‐off is
performed by the application of forms. In order to regulate the worksheets,
provide accurately allocated areas in which proper information is to be
submitted facilitating follow-up for smooth evaluation.
Pricing Materials
It is a system for allocating a RM value for a work item following a projected
specification and prearranged A process quantity needed.
After completion of quantifying of
materials, the calculation of cost of materials should be started.
The pricing of each work item should
consist of the individual subcomponents :-
Procurement of permanent and temporary materials
Labor needed for setting up the materials
Equipment necessary for shifting and installing materials
Other consumables, eg.
Fuel and tools Material costs
In general, the amount of purchase = the unit price, which is recognized as
quantity discount.
Freight cost should be taken into consideration and included in the direct cost
of the materials. This is very important if the site location is very distant
from nearby suppliers.
Other concerns for material procurement:
– Quantity discount
– Interest rate
– Escalation
– Holding cost
– Credit facility
– Allowance for method of measurement
of the bill item
Material Pricing basis
Resources of pricing information:
Published resources – Building Cost Indices
Company Cost records – an in-house record of accurate documenting and compiling
company cost from earlier jobs
Vendor
catalogues and quotations – prices are acquired directly from vendors from
catalogues or indirect inquiries.
While Upon assembling prices from vendor,
the following points must be taken into consideration:
ü
Payment requirements – cash, credit, credit term
ü
Delivery charges
ü Lead
time, product availability
ü Price
guarantee
ü
Quantity discount information
ü Price
rises clause
