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    Assignment 2

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    Eindra Nwe
    This document summarizes an assignment for a construction engineering course. It includes responses to several questions about different types of construction contracts. The first question asks what type of contract would be preferred for an excavation project with limited boring data. The response indicates a unit-price contract would be best to account for potential cost increases due to limited information. The second question defines "unbalancing a bid" as inflating early costs and reducing later costs to remain competitive on a unit-price contract. The third question says a cost-plus contract can benefit both parties if it includes a fixed contractor fee and profit sharing of any cost savings between the owner and contractor. This provides incentives for on-time completion and cost

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    Assignment 2

    Uploaded by

    Eindra Nwe
    2K views2 pages
    This document summarizes an assignment for a construction engineering course. It includes responses to several questions about different types of construction contracts. The first question asks what type of contract would be preferred for an excavation project with limited boring data. The response indicates a unit-price contract would be best to account for potential cost increases due to limited information. The second question defines "unbalancing a bid" as inflating early costs and reducing later costs to remain competitive on a unit-price contract. The third question says a cost-plus contract can benefit both parties if it includes a fixed contractor fee and profit sharing of any cost savings between the owner and contractor. This provides incentives for on-time completion and cost

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    Construction Management

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    This document summarizes an assignment for a construction engineering course. It includes responses to several questions about different types of construction contracts. The first question asks what type of contract would be preferred for an excavation project with limited boring data. The response indicates a unit-price contract would be best to account for potential cost increases due to limited information. The second question defines "unbalancing a bid" as inflating early costs and reducing later costs to remain competitive on a unit-price contract. The third question says a cost-plus contract can benefit both parties if it includes a fixed contractor fee and profit sharing of any cost savings between the owner and contractor. This provides incentives for on-time completion and cost

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views2 pages

    Assignment 2

    Uploaded by

    Eindra Nwe
    This document summarizes an assignment for a construction engineering course. It includes responses to several questions about different types of construction contracts. The first question asks what type of contract would be preferred for an excavation project with limited boring data. The response indicates a unit-price contract would be best to account for potential cost increases due to limited information. The second question defines "unbalancing a bid" as inflating early costs and reducing later costs to remain competitive on a unit-price contract. The third question says a cost-plus contract can benefit both parties if it includes a fixed contractor fee and profit sharing of any cost savings between the owner and contractor. This provides incentives for on-time completion and cost

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    CEE 307 A Assignment 2

    Dr. Jessica Kaminsky

    Eindra Nwe
    9th October 2015

    Part 1
    4.2

    If you were asked to perform an excavation contract competitively with limited

    boring data, what type of contract would you want and why?
    I would want a unit-price contract. There is limited boring data and therefore, an
    estimation on the amount of excavation needed and the accommodations that need to be made
    might not be accurate. Therefore, it would be difficult to accurately estimate a price for a lump
    sum contract. Thus, a unit-price contract will prevent me from having to default the project when
    cost gets too high.
    4.5

    What is meant by unbalancing a bid? What type of contract is implied? Give an

    example of how a bid is unbalanced.


    Unbalancing a bid is to inflate the unit price of items needed early in the construction and
    balancing by reducing the price for items needed later in the construction to remain competitive.
    A unit-price contract is implied. For example, during excavation, the price of removal of soil per
    cubic yard will be inflated to $75 instead of an actual cost of $50 and this will be balanced by
    pricing the cost of landscaping from $50 to $25 per unit. This is done so that the contractor
    doesnt have to borrow a large sum of money and incur the cost of interest to get the project
    started before receiving payment from the owner.
    4.7

    Under what circumstances is a cost-plus contract favorable to both owner and

    contractor?
    A cost-plus contract is favorable to both owner and contractor when it is a cost plus fixed
    fee with a profit-sharing clause contract. In this type of contract, the contractor is paid a set
    amount that is fixed regardless of the cost of the construction. Therefore, abuses that is common
    in a cost plus percent of cost does not occur where the contractor has the incentive to use less
    efficient and less economical methods of construction to gain a larger pay out. The contractor
    will be motivated to finish the project more efficiently and faster so that it receives its fee earlier.
    The benefit to the owner is that the project will be completed on time or earlier.
    The profit-sharing clause in the contract means that if there is opportunity for any value
    engineering to reduce the cost of construction, the cost savings will be shared between the owner
    and the contractor. It is beneficial to both parties as the contractor has the incentive to find cost
    savings way to earn more money while the owner gets cost savings.

    CEE 307 A Assignment 2


    Dr. Jessica Kaminsky

    Eindra Nwe
    9th October 2015

    Part 2
    Design-Build-Operate-Maintain
    Project:
    Prime Contractor:
    Location:
    Amount:
    Reference:

    Benjamin Hall Interdisciplinary Research Building, University of


    Washington
    Mortenson Construction/CollinsWoerman
    Seattle, Washington
    $45,000.000.00
    http://www.mortenson.com/seattle/projects/university-of-washingtonbenjamin-d-hall-interdisciplinary-research-building
    http://cpo.uw.edu/sustain/leed-projects/ben

    Description: Mortenson will operate and maintain the building for 30 years from the date of
    completion in 2006. The ultimate customers are the students, staff and faculty of the university as
    a laboratory research building. University of Washington remains as the owner.
    I think that for this type of building, DBOM is great as the price of construction, operation and
    maintainance of the building is already included in the price from the beginning. Because of the
    length of the contract at 30 years, Mortenson has the motivation to use higher quality products
    with a long life span in mind due to the fixed price nature of the contract. For example, the
    building is GOLD LEED certified, which is predicted to have greater energy savings in the
    amount of $220,000. The disadvantages are that any cost savings from value engineering does
    not benefit the University.

    Figure 1: Ben Hall (from www.mortenson.com).

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