Policies and Procedures
Preparation of the bill of quantities in Australian context is conventionally based on the standard method of measurement agreed upon by Australian Institute of Quantity Surveyors and building and construction and housing players in the industry (Ray, Hornibrook, Skitmore & Zarkada-Fraser, 1999). This measurement standard forms the policies (rules) that will be followed in preparation of a bill of quantities.
Upon receiving the detailed sketches and plans for the project, our company will need to prepare a comprehensive list of all the required materials together with the cost, labor charges, installation cost and the cost needed to do the work (Australian Procurement and Construction Council, 1997). This is called the bill of quantities. It is prepared on the basis of activities that will be undertaken through the project construction work. In preparing the bill of quantities, the following are the following procedure:
Step 1: Examination
A detailed examination of the contract, plans, sketches and conditions of the specification is the first step undertaken in preparation of the bill of quantities. This is done to identify and carefully note anomalies, erroneous and unusual conditions to be discussed in the adjudication meeting. The services of an architect are needed to help answer questions on the document discrepancies and additional queries, which are tabled in the report forwarded to the management. Detailed examination is valuable and should be done item by item. The reference that might need quotations is noted as reference information (Shen & Chan, 2007).
Step 2: Record Keeping
Record keeping is done based on the drawing indexes. These are normally received with the tender documents. The record keeping should be done throughout the entire preparation process and correctly compiled according to the dates received. This information is vital for preparation of the report for adjudication and, therefore, should be progressively done throughout the process (Australian Procurement and Construction Council, 1997).
Step 3: Cross Referencing
All the discrepancies that may exist through close examination and cross referencing with specifications in the preliminary clauses of the project are eliminated.
Step 4: Information Gathering
Additional information with regard to the project in terms of design requirements is necessary in preparation of the bill of quantities. This step is taken to ensure familiarization with the specified designs as indicated in specifications.
Step 5: Description of Items
Each item, process, and activity is described in the bill of quantities. This is essential since it ensures that as a company, every person clearly understands the location, purpose and intended role of every item in the project. In this step, the description should be done exhaustively and contain all measurements clearly numbered for easy verification.
Step 6: Listing of Elements
The elements entails the Bill of Quantities included the item number or a letter representing the item, description of the item which includes calculations, the unit of measurements used or applied, and actual measurements, let in price.
Step 7: Assigning Titles
The bill of quantities has several sections. Each section is given a title. It is necessary to ensure that the heading is relevant to the process. The sections are listed in order of the work done.
Policies (Rules) and Procedures in Relation to the Pricing Techniques
Step 1: Verify the Labor Rates
The first step involves verifying the labor rates and considering the relevant conditions and facts, such as travelling that might impact on the project (Australian Procurement and Construction Council, 1997).
Step 2: Review of Quotations
This step is necessary for selection of suppliers and prices that are to be included in the bill of quantities.
Step 3: Review of Sub-contract Quotation
This is done to determine the price, ensure the desired quality of work and to determine reliability of the contractor (Engström & Hedgren, 2012).
Step 4: Checking Monetary Sums
Checking monetary sums ensures proper inclusion of all the money that is to be placed in the project; it also ensures that allowance for installation and handling is made.
Step 5: Summarizing the Bill of Quantities
This step entails preparation of a summary of the bill of quantities. All relevant pages should be included together with accurate monetary values (Shen & Chan, 2007).
Step 6: Preparation of Preliminaries
The builder’s checklist is for preparation of preliminaries done at this stage.
Step 7: Determination of requirements
Determining of requirements is essential for job supervision.
Step 8: Preparing a List of Operating Supplies
A list of all operating supplies for the entire project is prepared.
Step 9: Determination of Proportional Charges
This includes determination of all administrative charges that will be carried out by the project.
Step 10: Summation of items
A sum of all listed items in steps 5, 6, 7, 8 and 9 is then calculated. This is done accurately, and a review of the entire project may be required.
Step 11: Determination of the Profit Margin
This involves determination of the amount to be included as the profit.
Step 12: Tender Submission
It is then important to ensure inclusion of all specifications to review the tender letter and finally submit the tender.
Policies (Rules) and Procedures in Preparing the Quotation or Tender Letter
In preparation of a tender letter or quotation the following steps are done (Ray, Hornibrook, Skitmore & Zarkada-Fraser, 1999):
Step 1: The tender number is quoted.
Step 2: The business is then named, including the business logo, letterhead and address of the tenderer. Contacts are taken including relevant names and telephone numbers.
Step 3: The name of the recipient company indicate the full name of the recipient company, correct address, name and position of the person receiving the letter.
Step 4: The reference to the drawing number, specifications, tender name and number and scope of the work.
Step 5: The quotation price is stated at the beginning of the page, indicating it in both figures and words. Next, it is vital to indicate whether it is inclusive or exclusive of tax.
Step 6: An outline of all inclusions are shown and provided a list of exclusions in detail.
Step 7: It is necessary to indicate whether the deposit is needed and whether there were to be additional charges such as plan drawing fees. In case a deposit is required, indicating whether it is refundable or not is inevitable.
Step 8: A schedule of payment indicating how and when the payments will be settled is provided. Additionally, the terms and conditions of different payment methods are determined.
Step 9: Our intended contact and name is stated.
Step 10: The validity date is determined and indicated using the actual date to eliminate confusion.
Step 11: Conditions are set for the customer, such as site access, visits, access during construction, safety issues and inspections.
Step 12: It is confirmed that the proof of ownership and the ability to pay.
Step 13: The confirming acceptance of the quotation, and finally filled the acceptance form.
Policies (Rules) and Procedures Regarding Lodging the Quotation or Tender
With the Client
Step 1: Following-up of the Quotation
On receipt of the tender /quotations, a proper response has to be given and both parties are requested to append their signatures to confirm time and date of receiving the tender (Shen & Chan, 2007).
Step 2: Opening the Quotation or Tender
The contractor opens the tender after the policies have been received and procedures to be followed when opening the tender. During this exercise, the contractor opens all the tenders received by the close of the tender submission deadline.
Step 3: Review of Quotation or Tender Documentation
After all the tenders are open, the documentation is reviewed and verified to be complete, and the contractor announces the company that offers the best price for the tender. Otherwise, the tender documents will be returned to the respective client with the covering letter indicating what caused rejection of the tender. The valid quotation, however, will proceed to the next verification stage.
Step 4: Technical Evaluation
Once the tender is validated, the evaluation procedure begins. At this stage the tenders are assessed according to the evaluation criteria adopted. These are mainly technical criteria.
Step 5: Financial Assessment
A financial assessment of the prices quoted is undertaken and the results documented for the purposes of covering the building materials and other operation costs.
Step 6: Evaluation of the Best Combined Quotation or Tender
A thorough evaluation based on the financial and technical criteria is done; A comparison is carried out to determine the best client with excellent technical and financial worth for our project.
Policies (Rules) and Procedures for Recording the Quotation/Tendering Process – e.g. Quote Register
Step 1: Review
Reviewing client purchasing policies, procedures, guidelines and the ability to pay for the work is the first stage in recording of quotation (Ray, Hornibrook, Skitmore & Zarkada-Fraser, 1999).
Step 2: Develop Evaluation Criteria
Using the quantitative and qualitative method, an evaluation criterion is established to ascertain the value for money.
Step 3: Quote register evaluation
Using the established evaluation criteria, quotation process is evaluated.
Step 4: Making Requisition
Making a tender requisition
Step 5: Notification
Both successful and unsuccessful clients are notified.
Step 6: Legal Vetting
Prepare a copy of the written contract and submit to legal experts for vetting and verification.
Step 7: Registration
Successful client is registered in the financial system as successful and approved to undertake the building and construction project.
Policies (Rules) and Procedures Regarding the Follow up Process after the Quotation/Tender Lodged
Step 1: Registration of the client
The successful client is developed and recorded all the relevant details stored in the system.
Step 2: Invoicing
The client is to be issued with invoices of work done for settlement of payment.
Step 3: Payment
The contractor is provided with a method of payment.
Procedures to Review and Evaluate the Full Process
Review and evaluation of the process is the responsibility of the quantity surveyor. The quantity surveyor evaluates and reviews the tendering and quotation process. The review is done progressively to determine the cost and time needed to complete the entire building and construction project. Evaluation and review should be done after every three months (Australian Procurement and Construction Council, 1997).
Some of the necessary steps carried out to evaluate and review are:
Step 1: identifying all the activities in the entire project;
Step 2: identifying deliverables of each of the activities in the project and noting the timeline for achieving each of the deliverables;
Step 3: identifying responsible personnel for each activity;
Step 4: progressive evaluating and reviewing each activity and identifying whether the deliverables have been met on time or not. Documenting the results of each review and evaluation exercise is also important;
Step 5: generating a report for review and evaluation.