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(Tender& Cost Estimation)Study and Pricing Engineering Projects

                                  Study and pricing engineering projects

 

In this article, we will define and discuss the following points:

  • Introduction about Tender - Specifications of projects’ costs
  • What is Tender work – why is it important?
  • What are the information and the skills needed to be a professional Cost control engineer?
  • The most essential information needed in the project before starting the study and the analysis.
  • How to calculate direct and indirect costs and define the overhead.
  • Break-down analysis. Making a technical and financial offer.
  • How to analysis work items in order to calculate direct costs and explain with examples.

 

  1. Introduction about Tender

Tender is studying and analyzing the project and it is the part which is responsible for calculating the direct and indirect cost of the project. And this subject is very important and beneficial in all projects even if it is an engineering related or not. In addition, it is important in personal life because it makes you knowledgeable about costs of anything that you are about to do. When the study is good and conducted well, the risks are lower, and the income is higher ISA.

  • What is Tender work – why is it important?

Tender definition was mentioned in the introduction. Also, it is essential in all aspects, whether it is engineering-related or not, to know the cost of the project and decide whether it is within our financial limit or not before taking any decision. However, in this article, we will focus more on Engineering projects, especially the mechanical part in the construction sector, with clarification of the basics and the most critical factors for pricing and studying any item of the contract.

 

The definition of Tender work:

 is the study, pricing, and analyzing the items in both technical and financial ways. In addition to calculating direct costs in detail and indirect costs, which includes the Overhead, we will explain it in more detail. 

The importance of Tender department or Cost control engineer in any company:

 it is that he shows the complete picture in front of Board of Directors to calculate the costs of the project in order to give them the chance to take the right decision in case they are financially capable to implement the project. This step is done before taking any decision that may cause loses. It also gives you the opportunity to compete with our companies to take and implement the job based on empirical evidence and study. In addition to understanding the financial limits and figuring the percentage of discount with making any loses.

  • What are the information and the skills needed to be a professional Cost control engineer?

To fully understand the design of the item, its concept, and its complementary parts (parts needed for the item). The importance of this point relays on if the company asked for reducing the prices (Value engineering) by reducing the cost of the item by implementing it in a different way keeping the same function. 

To fully understand the implementation of the item. This point is extremely important because it greatly affects the costs of the project. Therefore, the engineer should know exactly how to install the item, number of works, number of hours required to install the item. In addition to the required equipment (Cranes, scaffolding, excavators, generator) and how to test it and deliver it to the consultant. And the total number of hours needed and the cost of the testing if it is done by another company.

To be fully knowledgeable of the supplier list for the item which is being priced and the difference between the quality and the price. In addition to Payment facilities.

The better the engineer's knowledge of these previous points, the better his studies will be better and closer to the implementation and achieving the desired profits.

  • The most essential information needed in the project before starting the study and the analysis.
  1. The type of the project.
  2. The owner and the sponsor of the project.
  3. The consultant.
  4. The location to calculate the transportation and residential fees.
  5. The duration of the project to calculate the number of the workers, hours, and indirect costs.
  6. The required documents for the companies.

 

In the next article, we will discuss the rest of the points which are:

  • How to analysis work items in order to calculate direct costs and explain with examples.
  • How to calculate indirect costs and define the Overhead.
  • Break-down analysis. Making a technical and financial offer.

 

We offer you studying and calculating the costs for engineering project service done by professional specialized engineers in electromechanical field. 

 

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