Arab Academy for Science and Technology
College of Engineering and
Technology
Industrial and Management
Department
IM 763E : Cost Management for Engineering
Projects
CHAPTER TWO
Work package Pricing
Dr. Raymond Fraig
Assistant Professor, PMP,PMI-RMP,CCC
All rights reserved – Raymond Fraig -01003989333 – [Link]@[Link] 1
Example (1)
In an operation of producing and placing concrete
on a construction project , the following resources
were used and produced 60 m3 / hour . If the site
works 8 hours per day , calculate the unit cost for
this operation and check its feasibility knowing that
resources are:
◦ 1 batch plant+ 1 operator + 1 helper
◦ 4 trans mixers + 4 drivers
◦ 1 concrete pump + 1 operator + 1 helper
◦ 1 tower crane + 1 operator
Resource rates are calculated as the next table.
1 cubic meter of concrete will be sold at USD 220.
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.Example (1) contd
Resource Number rate (USD)
Drivers 4 600/month
Operators 2 900/ month
Helpers 2 450/ month
Trans mixer 4 400/day
pump 1 800/day
batch plant 1 1000/day
loader 1 400/day
cement 0.4 ton/m3 220/ton
sand 0.4m3 / m3 10/m3
Gravel 0.8m3 / m3 45/m3
Water -- 5/m3
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Solution
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Solution
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Example (2)
A feeding gas pipeline project (shown in
drawings ) consists of 5 work packages:
excavation, formwork, steelwork, concreting and
ducting. It is required to prepare a detailed
contract price showing ; Duration sheet, Work
sheet, Cost summary sheet , Recapping sheet
and BOQ proposal given the following data:
• Reinforcement = 80 kg/m3;
• Formwork: 1 labor (100 USD /day) + 2 helpers (80
USD /day) produce 150 SMCA/day;
• Steelwork: 1 labor (120 USD /day) + 2 helpers (100
USD /day) produce 4 ton/day;
• Batch plant: 1000 m3/day; and
• Ducting: 100 m/day. 6
.Example (2) contd
• Formwork Rent: 15 USD/SMCA;
• Steel Cost: 4000 USD/ton;
• Ready mix Concrete Cost: USD /m3;
• Equipment: 1 pump (10 USD /m3) + 2 truck (2.5 USD
/m3);
• Concrete Casting: 2 labors (80 USD /day) for leveling;
• Sub-Contractor Ducting Cost: 6000 USD; and
• Sub-Contractor Excavation Cost: 9000 USD.
• Gas pressure test : 10000 USD
• Payroll Insurance: 5%;
• Payroll Tax: 11%;
• Sales Tax: 10%;
• Risk: 1%;
• Investment of Bonds: 10%;
• Site overhead: 70,000 USD;
• General overhead: 12%; and
• Profit: 15%. 7
.Example (2) contd
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Solution
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Solution
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