Cost plus and other tender issues

Access Construction ERP software comprises award-winning Enterprise Resource Planning (ERP) EasyBuild and ConQuest Estimating, providing an end-to-end solution with the visibility to take control of a project from pre to post construction.

Which comes first, the tender or the estimate? Well, the information required to fulfil both functions is essentially the same throughout the whole bidding and construction process. From preparing invitations to subcontractors or suppliers to tender or to calculate running costs, Quantity Surveyors rely on software applications that give them full visibility and control over the financial elements of the construction process.

It's a process that can generate a huge amount of data and many thousands of documents over the life of a project, which can last for many years, and is backed up by material and component libraries and subcontractor directories that have to be kept up to date. As invitations to tender are sent to numerous potential contractors they, in turn, respond to many more tenders than they would expect to be awarded. As the period between the submission of the tender and the commencement may be years apart, tendering information frequently becomes outdated and needs to be refreshed. Those that have been received, are relevant and are up to date need to be compared against rival tenders.

It's not all straightforward. Contractors sometimes put in low bids to ensure they get the contract, knowing that at some stage in the future they would be able to raise construction issues to increase their low margins. On other occasions there are unknowns about the project that make estimating difficult. When this occurs, there is an agreement to reimburse a company for expenses incurred plus a specific amount of profit, usually stated as a percentage of the contract's full price. This provides a degree of flexibility to the contractor and is known as a cost plus contract. Tenders would also be submitted based on inferior materials, or lower standard construction and Health & Safety procedures, also designed to minimise the tendering company's costs. Maintaining an up-to-date contractor database that details previous work performed for the main contractor allows past records to be used to qualify future performance expectations.

Projects, therefore, can no longer be handled in isolation with data held in unique silos compiled from dedicated applications, require data translation or manual intervention to produce financial reports collated from the data.

To get even this far, though, an invitation to tender cannot be completed until a Quantity Surveyor has looked at the building plans and broken down the construction process into finite tasks and calculated the materials and resources required to complete it. That requires the implementation of a cost estimating application such as ConQuest Estimating Software, which provides the tools needed to manage the cost element of a project, including:

  • ongoing cost estimation
  • quantity surveying
  • progress reporting and analysis
  • take-offs for tenders
  • access to material and other libraries

Now it can be taken further. After the acquisition of ConQuest by the Access Group, and the subsequent purchase of EasyBuild with its dedicated and cloud-based construction ERP platform, the Access Group now provides a comprehensive construction cost and estimating solution and a total financial management system for a project's complete lifecycle ConQuest's Estimating Software already allowed contractors access to an easy-to-use cost control and reporting system with the ability to perform variance analyses and cashflow forecasts and other critical functions. Now with access to EasyBuild's cloud-based ERP capabilities, all of the financial information, updated libraries, contractors records and other critical information available for all of an enterprises projects - throughout the complete lifecycle of a project - is available, and with appropriate access levels for managers and finance throughout.

It's a complex industry, and pretty hidebound, as well, and suppliers and subcontractors have developed a myriad of alternative options for pricing their goods or services, but the Access ConQuest Estimating Software can handle them all, working with outputs, constants or divide by bill quantities, or you can enter prices or rates yourself, allowing the software to complete the pricing process - and saving the result as an option that can be used for other suppliers.

The software can also be used to generate detailed resource analyses, incorporating labour, plant, material and subcontractor schedules with quantities, rates and totals. Materials can also be set to accommodate wastage, compaction or other factors. Bill summaries can be set to match activities, and you can switch between elemental and trade pricing. Elemental cost plans evolve through the life of the project, developing in detail and accuracy as more information becomes available about the nature of the design, and the actual prices provided by subcontractors and suppliers.

Being able to compare subcontractors or supplier's quotes requires the same flexibility. Access ConQuest Estimating sets up lists of items for each trade along with the names of suppliers receiving an enquiry, which can then be refined by deleting non-responders or unsolicited quotes. Missing rates or gaps in the tenders can be plugged with lowest, highest or average rates, or by applying an analytical rate from the bill.

You can add in arbitrary amounts for visits, attendances, prelims and items with discounts or fixed price terms (items that, subsequently, could usefully be incorporated within personal time sheets using EasyBuild ERP) or filter elements of your analytical build-up to reflect just labour, labour and plant or any other combination, aiming to match an assortment of quotes as closely as possible. Having assembled your bunches of apples, pears and grapes, Access ConQuest Estimating will rank them accordingly - with the lowest at the top of the pile.

There is a lot of work being done by the main contractor for each project on requesting, receiving, processing and grading quotes, but subcontractors and suppliers are able to participate in the process as well by accessing the Online Enquiries feature in Access ConQuest Estimating where subcontractor document packages have been uploaded to a secure cloud storage area. By doing so the relevant project documents can be made downloadable for each trade or supplier.

Each of these packages are quickly set up and links sent to subcontractors, inviting them to use the online facilities. The Online Enquiries feature also records who has looked at the quotes, who has quoted and who has declined to quote, and you can tag the contractor, set up a tracking filter and remind them to quote using the integrated email system.

It is a rare project that doesn't have architectural modifications, amendments and additions to the original plans, and Quantity Surveyors have to be similarly agile in revising their estimates and calculations. This is enabled by the rapid takeoff features of Access ConQuest Estimating. Users say that they can extract the information they need on most jobs in less than an hour: viewing and measuring from any 2D document, CAD files PDF drawing or 3D and BIM model. You can choose to use 2D or 3D, and the 3D option allows users to turn off layers and pan round the model for convenience.

Using on-screen takeoff regular and curved areas can be measured and lengths, objects and perimeters extracted in a variety of electronic drawing formats. You can even recalibrate drawings to cater for distortions. As you do this, your measurements appear instantly in an adjoining on-screen window next to your bill and are transferred to the job with one click.

The meat of Access ConQuest Estimating is its estimating and tendering options of course, but there are many other features that we haven't had the space to cover here which we will feature in our next issue. These include the benefits of the software's new integration within EasyBuild's ERP software, the effective use of Access Cloud computing, and Accesses Health & Safety options for the construction industry.