Introduction
The success of this project is dependent upon getting the appropriate engineering proficiency. The selection of the most competent engineers for the project is the only surety for economical, well designed and planned project that in the end is successful.
The apex of the triangle is the start of the project lifecycle. It also represents small costs. The first triangle represents engineering. It represents 1-3%. The second section of the triangle represents construction 6-19%. The last part of the triangle represents the operations and maintenance 80-94%. It is also the base, the end of the project lifecycle. It also represents large costs.
The purpose of the paper
This paper gives an outline for developing fee budgets for the project. It is to provide fee budget which should be appropriate for compensation of-:
The professional work needed to accomplish engineering quality and care, and the professional obligation of the engineers under engineering act.
This paper reflects service level of engineers based on the fee budgets. It is intended to guide the budgeting of the project to completion.
Appointment of the engineer
For this project to be successful it must meets intended requirements at the lowest sustainable lifecycle cost of the project.
The long term maintenance and operation cost of building or infrastructure should be in the order of 80 to 94 percent of life time asset cost. At 1 to 3% of the total cost, the engineering cost is comparatively a small cost. The engineer plays an important role in meeting the objective of the project.
Remuneration methods
The fee budget for this engineering project will be categorized into the following methods-:
Phase 1-Time basis
Phase 2-percentage construction cost
Phase 3-Fixed Fee or Lump sum.
The following is the schedule on remuneration for the project
Category of service
Building engineering
1. Advisory
Time basis
2. preliminary design
Time basis
3. Design Development and contract Documents-Final design
Fixed fee
4. Tender services
Fixed fee
5. Construction
Fixed fee
6. Resident Engineering Services
Time basis
7. Project Management Services
Time basis
8. Construction Management
Time basis
The activities to be carried out until the completion of the project are described as shown in the table. However due to the nature of the project, time basis will be used for advisory, preliminary design, resident engineering service, project management services, and construction management. The reason for this is because this section of the project is difficult to ascertain, it cannot be easily defined, and the fact that the control of disbursements and time at any project stage is not under consultant.
The total time deliberated on the project is billable. This includes-: consultation with engineers, travel and time on the office of the client. This also includes the clerical and technical. However it is not limited to the clerical staff responsible for coming up with specifications, reports and scheduling.
The consultant will be responsible for close supervision on the progress and giving out reports on the status of the project. This method also allows the consultant to maintain focus basing on the original scope of the project. This will assist the consultant-client relationship.
In this method fee for special expertise that offer specialized services and are fully qualified are paid twice hourly rate. The adjustment of salary in the event of the project is reflected in adjustment. Any changes on this should also be communicated.
In the remuneration table, there are other events in the project that are going to be remunerated using the lump sum technique, also known as fixed fee. This includes-: development of the design and documents of the contract-final design, services of tender and construction.
The reason being that these services are well defined and that cost of the consulting engineering is a construction function. It is also due to the fact that cost of individual construction discipline falls within £1million.
It is also important in this method that the agreement of the client stipulate clearly the payment of the construction cost. It is whether its estimate is drawn from completion of the project or the actual cost of construction of the completed project. The resident full time engineering will be paid using this method.
This method also is used for contracts that are developed frequently from projections that are time based. It also applies to those tasks whose requirements are specific. It is arrived at through the use of percentage fee method. It is not a must for disbursement to be contained here in. In this case the project is precise and that its specification is specific.
Health and safety policy
This is going to achieved thorough acquisition of Professional indemnity insurance. The professionals such as-: project manager, engineers, architects and other consultants will be required to adhere to the bylaws that govern their practice. Its recommendation is that engineers should bear professional liability insurance. The need for additional insurance coverage by the client will translate into client’s cost. This usually is treated as a disbursement. As an alternative, the client may use a single project recommended by the liability policy. This policy is on single project-specific professional liability.
The cost planning process
Terms
Definitions
Early cost advice
Discussion with the client on objectives and aims of the project
Preliminary estimates
Developed by use of a single price approximate estimate method
Preliminary cost plan
Preliminary budget allocation among various project elements
Cost plan
Arises as a result of analysis of elements entailing cost target settings for entire project
Cost checking
Change evaluation in element design during design process
Tender reconciliation
Final cost plan comparison with acceptable sum of tender
Post contract cost control
Cost control during construction period.
Description
Tender process, cost and payments
General risk profile
Variants
Roles
Tender process
Allocation of risks by principal
Tenderer expected to give rate schedule in line with lump sum
Preparation of project briefs, design of scheme, developed and contract documentation
Contractor carries out construction
Parties’ Relationship
Potentially adversarial.
‘Zero sum’ mentality (i.e. ‘your gain is my loss’).
Calling of tenders after documentation and design
Lump sum price offered by tenderers
Cost prior to tender
Principal is tasked to ensure that the design can be built under the budget.
Cost and payments post tender
The agreed lump sum is the contract sum, subject to variation adjustment for the contract documents and claims.
Contractor is made on a regular basis for work completed, up
That the design adheres to project brief.
That the contract documentation is a replica of the design.
That the contract documentation is appropriate and suitable for the construction purpose.
Scope
It is stipulated in the contract documents.
Varies, but in compliance with original contract document intention. Any variation gives time extension and adjustments of contract sum.
Design and quality
Workmanship and material Quality is clearly stipulated in the documentation of the contract.
Contractor when it comes to design inputting or project ‘buildability’.
6 to 12 months period defects liability, without any addition of benefits.
Documentation and design must be achieved prior to construction commencement. This extends time for procurement strategy that is available.
Lots of delays results in time extensions for construction completion.
Administration
Principal appoints a Superintendent to administer the contract.
Administration of Contract is not wholly complicated.
Remuneration for building services
The table below gives the schedule for stage payments. It is also used for developing fee budget shown by individual category.
The surveying staff work round the clock to ensure that the project meets its requirement as stated in the initial design of the project. They are responsible for ensuring quality and adherence to required standards.
The sub consultants are responsible for facilitating roles not specified under major consultants’ role.
The classification of estimate
It is crucial to know that the cost estimate is most incredible tool for an engineer. This is based on his experience, available information, and knowledge at that time. Its accuracy and completeness is influenced by stage of development and status of the project. The estimate is short lived and is affected by market fluctuations and inflation.
References
Kerzner, Harold. Project Management: A Systems Approach to Planning, Scheduling, and
Controlling. New York, NY: John Wiley and Sons, 2009. Print
