Balanced/Unbalanced Bids Example Given: Project Fixed Cost Target Profit $800.000 $100.000 Balanced Bid Unit Unit Cost Total Cost Profit Profit/Unit Unit Price Extended Actual Price Variable Unit Cost $0.00 $0.90 $28.00 $1.00 $0.00 Allocated Fixed Cost $66.284.00 S319.811.00 S159.081.00 S188.540.00 $66.284.00 $800,000 $5,401.00 $31,300.00 $38,058.00 $19.843.00 $5,400.00 $100,000 $0 $0.00 Bid Actual Pay Duration Owner Contractor Pay Items (weeks) Estimates Estimates Mobilization 2 1LS Excavation 8 70,200 71,500 CY Install Pipe 4 12,500 11.000 LF Backfill 5 60,000 70,000 CY Landscape 3 1LS Totals Owner Contractor Pay Items Unit Price Estimates Estimates Mobilization 1 Excavation 70200 71500 Install Pipe 12500 11000 Backfill 60000 70000 Landscape Totals Bid Price Balanced Cost Loaded Schedule - With Financial Cost Payment Period Pay Items Week 1 2 Mobilization Profit Excavation Profit Install Pipe Profit Backfill Profit Landscape $0 $0 Finacial Cost 4% per month 2 3 3 3 5 6 8 9 10 11 12 13 14 CIVL 4420 Project Management Practical Exercise - Module 6 Balanced and Unbalanced Bids A MS Excel spreadsheet posted on Canvas under Module 6 (Practical Exercise - Module 6) presents pricing information used by your company to prepare a price proposal for a pipe installation project. Use this spreadsheet to answer the following questions (for all questions, assume that financial cost= 1%/month) 1. Assuming that the solicitation documents do not include provisions to control bid unbalancing through the redistribution of fixed costs and profit; what set of unit prices would give you the highest probability of winning the project if it is to be awarded on a low-bid basis? Make sure that these unit prices allow you to recover your estimated total cost and target profit ($100K). Add financial costs to the Mobilization pay item. Unbalanced the bid redistributing only fixed costs and profit . Present your solution on a separate worksheet in the MS Excel file (Worksheet Name: Module 6 - Question 1"). a. Fill out the following bid form. This is the price proposal that you are submitting to the owner, including financial cost. Quantities Unit Prices Extended Price Pay Item Mobilization Excavation Install Pipe Backfill Landscape Unit LS CY LF CY LS TOTAL BID b. What is the difference between the price proposal in the table above and the balanced bid? (By how much are you reducing your price proposal?) c. What is the financial cost in the proposal presented in the table above? 2. Given the following conditions included by the owner in the solicitation documents to reduce the risk of receiving unbalanced bids; what set of unit prices would give you the highest probability of winning the project if it is to be awarded on a low-bid basis? Make sure that these unit prices allow you to recover your estimated total cost and target profit ($100K). Add financial costs to the Mobilization pay item. Unbalanced the bid redistributing only indirect fixed costs and profit. Present your solution on a separate worksheet in the MS Excel file (Worksheet Name: Module 6 - Question 2). Supplementary Condition: Prices submitted by responsive responsible bidders must meet the conditions presented in the following table: Pay Item Mobilization Excavation Install Pipe Backfill Landscape Minimum Maximum Equal to or lower than 10% of total price proposal $4.50/CY $8.00/CY $38.00/LF $62.00/LF $3.00/CY $7.50/CY Equal to or lower than 6% of total price proposal a. Fill out the following bid form. This is the price proposal that you are submitting to the owner, including financial cost. Quantities Unit Prices Extended Price Pay Item Mobilization Excavation Install Pipe Backfill Landscape Unit LS CY LF CY LS TOTAL BID b. What is the difference between the price proposal in the table above and the balanced bid? (By how much are you reducing your price proposal?) d. What is the financial cost in the proposal presented in the table above? Fill out all tables and answer all questions in this MS Word file and submit it to Canvas along with the MS Excel file with your solutions. Balanced/Unbalanced Bids Example Given: Project Fixed Cost Target Profit $800.000 $100.000 Balanced Bid Unit Unit Cost Total Cost Profit Profit/Unit Unit Price Extended Actual Price Variable Unit Cost $0.00 $0.90 $28.00 $1.00 $0.00 Allocated Fixed Cost $66.284.00 S319.811.00 S159.081.00 S188.540.00 $66.284.00 $800,000 $5,401.00 $31,300.00 $38,058.00 $19.843.00 $5,400.00 $100,000 $0 $0.00 Bid Actual Pay Duration Owner Contractor Pay Items (weeks) Estimates Estimates Mobilization 2 1LS Excavation 8 70,200 71,500 CY Install Pipe 4 12,500 11.000 LF Backfill 5 60,000 70,000 CY Landscape 3 1LS Totals Owner Contractor Pay Items Unit Price Estimates Estimates Mobilization 1 Excavation 70200 71500 Install Pipe 12500 11000 Backfill 60000 70000 Landscape Totals Bid Price Balanced Cost Loaded Schedule - With Financial Cost Payment Period Pay Items Week 1 2 Mobilization Profit Excavation Profit Install Pipe Profit Backfill Profit Landscape $0 $0 Finacial Cost 4% per month 2 3 3 3 5 6 8 9 10 11 12 13 14 CIVL 4420 Project Management Practical Exercise - Module 6 Balanced and Unbalanced Bids A MS Excel spreadsheet posted on Canvas under Module 6 (Practical Exercise - Module 6) presents pricing information used by your company to prepare a price proposal for a pipe installation project. Use this spreadsheet to answer the following questions (for all questions, assume that financial cost= 1%/month) 1. Assuming that the solicitation documents do not include provisions to control bid unbalancing through the redistribution of fixed costs and profit; what set of unit prices would give you the highest probability of winning the project if it is to be awarded on a low-bid basis? Make sure that these unit prices allow you to recover your estimated total cost and target profit ($100K). Add financial costs to the Mobilization pay item. Unbalanced the bid redistributing only fixed costs and profit . Present your solution on a separate worksheet in the MS Excel file (Worksheet Name: Module 6 - Question 1"). a. Fill out the following bid form. This is the price proposal that you are submitting to the owner, including financial cost. Quantities Unit Prices Extended Price Pay Item Mobilization Excavation Install Pipe Backfill Landscape Unit LS CY LF CY LS TOTAL BID b. What is the difference between the price proposal in the table above and the balanced bid? (By how much are you reducing your price proposal?) c. What is the financial cost in the proposal presented in the table above? 2. Given the following conditions included by the owner in the solicitation documents to reduce the risk of receiving unbalanced bids; what set of unit prices would give you the highest probability of winning the project if it is to be awarded on a low-bid basis? Make sure that these unit prices allow you to recover your estimated total cost and target profit ($100K). Add financial costs to the Mobilization pay item. Unbalanced the bid redistributing only indirect fixed costs and profit. Present your solution on a separate worksheet in the MS Excel file (Worksheet Name: Module 6 - Question 2). Supplementary Condition: Prices submitted by responsive responsible bidders must meet the conditions presented in the following table: Pay Item Mobilization Excavation Install Pipe Backfill Landscape Minimum Maximum Equal to or lower than 10% of total price proposal $4.50/CY $8.00/CY $38.00/LF $62.00/LF $3.00/CY $7.50/CY Equal to or lower than 6% of total price proposal a. Fill out the following bid form. This is the price proposal that you are submitting to the owner, including financial cost. Quantities Unit Prices Extended Price Pay Item Mobilization Excavation Install Pipe Backfill Landscape Unit LS CY LF CY LS TOTAL BID b. What is the difference between the price proposal in the table above and the balanced bid? (By how much are you reducing your price proposal?) d. What is the financial cost in the proposal presented in the table above? Fill out all tables and answer all questions in this MS Word file and submit it to Canvas along with the MS Excel file with your solutions