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Question 2 (10 Marks) A sub-contractor in a road construction project has offered to take over the remaining contract from the main contractor. They are
Question 2 (10 Marks) A sub-contractor in a road construction project has offered to take over the remaining contract from the main contractor. They are offering to take over all the jobs by paying a fee of 5% on all contract revenue that they will be collecting in the project. Some of the staff and offices will be manned by the sub-contractor's group and will reduce the main contractor's operation overheads by RM1,500,000 per month. The estimated contract value left in the project is RM120,000,000 with the total materials and direct labour costs estimated to be at RM102,000,000. The project will be completed within the next 6 months. Required : a) As the main contractor shoul your company accept the offer ? Show Calculation. ( 5 marks ) b) What the qualitative considerations to be taken into account in the decision? ( 5 marks )
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