Company that would be awarded the contract if categories of quality and price are given equal weight. Concept introduction: Bidding is the process used to select the contractor who would do the required work at lowest price. It is the simplest procedure where the cost is calculated and the lowest responsive price is selected to get the work done.

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Answer 1

Question

Chapter 9, Problem 2.4Q

Summary Introduction

Interpretation:Company that would be awarded the contract if categories of quality and price are given equal weight.

Concept introduction: Bidding is the process used to select the contractor who would do the required work at lowest price. It is the simplest procedure where the cost is calculated and the lowest responsive price is selected to get the work done.

Expert Solution & Answer

Explanation of Solution

The procurement department of H hotels is evaluating tenders for its newest hotel resort. Four tenders have been received and tender is being evaluated based on quality and price. Quality is being quantized on a 100 point scale where 50 points is for method statement, 10 points for environmental approach and 60 points for quality and seniority of the company’s project team.

Bid prices are converted based on a 100 point score where lowest price is awarded 100 points and 1 point is penalized for each full $100,000 that price exceeds the lowest price in the group of bids.

Details of bids are as follows:

1.) OR LLC bids $4 million for construction cost; $200,000 for setup costs; $300,000 for overhead and profit; design fees of 5% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$4,000,000+$200,000+$300,000+(5% of $4,000,000)+(1% of $4,000,000)=$4,740,000

2.) WC bids $3.8 million for construction cost; $250,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 1.5% of construction costs.

So total price for bid would be:

$3,800,000+$250,000+$200,000+(4% of $3,800,000)+(1.5% of $3,800,000)=$4,459,000

3.) UC bids $3.6 million for construction cost; $300,000 for setup costs; $150,000 for overhead and profit; design fees of 7% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$3,600,000+$300,000+$150,000+(7% of $3,600,000)+(1% of $3,600,000)=$4,338,000

4.) DC bids $4.2 million for construction cost; $200,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 2% of construction costs.

So total price for bid would be:

$4,200,000+$200,000+$200,000+(4% of $4,200,000)+(2% of $4,200,000)=$4,852,000

Lowest offer price is from UCcosting $4,338,000 . So price score of UC would be 100 .

Company	Bid price	Difference in bid price with lowest bid price	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team
OR LLC	$4,470,000	$132,000	(100−1)=99	(45+9+35)=89
WC	$4,459,000	$121,000	(100−1)=99	(45+10+40)=95
UC	$4,338,000	$0	100	(42+8+32)=82
DC	$4,852,000	$514,000	(100−5)=95	(49+9+39)=97

Now price and quality are given equal weightage of 50% each.

Thus weighted score of tender would be

Company	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team	Weighted average score
OR LLC	(100−1)=99	(45+9+35)=89	(0.50×99+0.50×89)=94
WC	(100−1)=99	(45+10+40)=95	(0.50×99+0.50×95)=97
UC	100	(42+8+32)=82	(0.50×100+0.50×82)=91
DC	(100−5)=95	(49+9+39)=97	(0.50×95+0.50×97)=96

Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.

WCshould be awarded the contract under average weighted linear cost method as it has highest average weighted score.

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Answer 2

Question

Chapter 9, Problem 2.4Q

Summary Introduction

Interpretation:Company that would be awarded the contract if categories of quality and price are given equal weight.

Concept introduction: Bidding is the process used to select the contractor who would do the required work at lowest price. It is the simplest procedure where the cost is calculated and the lowest responsive price is selected to get the work done.

Expert Solution & Answer

Explanation of Solution

The procurement department of H hotels is evaluating tenders for its newest hotel resort. Four tenders have been received and tender is being evaluated based on quality and price. Quality is being quantized on a 100 point scale where 50 points is for method statement, 10 points for environmental approach and 60 points for quality and seniority of the company’s project team.

Bid prices are converted based on a 100 point score where lowest price is awarded 100 points and 1 point is penalized for each full $100,000 that price exceeds the lowest price in the group of bids.

Details of bids are as follows:

1.) OR LLC bids $4 million for construction cost; $200,000 for setup costs; $300,000 for overhead and profit; design fees of 5% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$4,000,000+$200,000+$300,000+(5% of $4,000,000)+(1% of $4,000,000)=$4,740,000

2.) WC bids $3.8 million for construction cost; $250,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 1.5% of construction costs.

So total price for bid would be:

$3,800,000+$250,000+$200,000+(4% of $3,800,000)+(1.5% of $3,800,000)=$4,459,000

3.) UC bids $3.6 million for construction cost; $300,000 for setup costs; $150,000 for overhead and profit; design fees of 7% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$3,600,000+$300,000+$150,000+(7% of $3,600,000)+(1% of $3,600,000)=$4,338,000

4.) DC bids $4.2 million for construction cost; $200,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 2% of construction costs.

So total price for bid would be:

$4,200,000+$200,000+$200,000+(4% of $4,200,000)+(2% of $4,200,000)=$4,852,000

Lowest offer price is from UCcosting $4,338,000 . So price score of UC would be 100 .

Company	Bid price	Difference in bid price with lowest bid price	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team
OR LLC	$4,470,000	$132,000	(100−1)=99	(45+9+35)=89
WC	$4,459,000	$121,000	(100−1)=99	(45+10+40)=95
UC	$4,338,000	$0	100	(42+8+32)=82
DC	$4,852,000	$514,000	(100−5)=95	(49+9+39)=97

Now price and quality are given equal weightage of 50% each.

Thus weighted score of tender would be

Company	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team	Weighted average score
OR LLC	(100−1)=99	(45+9+35)=89	(0.50×99+0.50×89)=94
WC	(100−1)=99	(45+10+40)=95	(0.50×99+0.50×95)=97
UC	100	(42+8+32)=82	(0.50×100+0.50×82)=91
DC	(100−5)=95	(49+9+39)=97	(0.50×95+0.50×97)=96

Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.

WCshould be awarded the contract under average weighted linear cost method as it has highest average weighted score.

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Answer 3

Question

Chapter 9, Problem 2.4Q

Summary Introduction

Interpretation:Company that would be awarded the contract if categories of quality and price are given equal weight.

Concept introduction: Bidding is the process used to select the contractor who would do the required work at lowest price. It is the simplest procedure where the cost is calculated and the lowest responsive price is selected to get the work done.

Expert Solution & Answer

Explanation of Solution

The procurement department of H hotels is evaluating tenders for its newest hotel resort. Four tenders have been received and tender is being evaluated based on quality and price. Quality is being quantized on a 100 point scale where 50 points is for method statement, 10 points for environmental approach and 60 points for quality and seniority of the company’s project team.

Bid prices are converted based on a 100 point score where lowest price is awarded 100 points and 1 point is penalized for each full $100,000 that price exceeds the lowest price in the group of bids.

Details of bids are as follows:

1.) OR LLC bids $4 million for construction cost; $200,000 for setup costs; $300,000 for overhead and profit; design fees of 5% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$4,000,000+$200,000+$300,000+(5% of $4,000,000)+(1% of $4,000,000)=$4,740,000

2.) WC bids $3.8 million for construction cost; $250,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 1.5% of construction costs.

So total price for bid would be:

$3,800,000+$250,000+$200,000+(4% of $3,800,000)+(1.5% of $3,800,000)=$4,459,000

3.) UC bids $3.6 million for construction cost; $300,000 for setup costs; $150,000 for overhead and profit; design fees of 7% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$3,600,000+$300,000+$150,000+(7% of $3,600,000)+(1% of $3,600,000)=$4,338,000

4.) DC bids $4.2 million for construction cost; $200,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 2% of construction costs.

So total price for bid would be:

$4,200,000+$200,000+$200,000+(4% of $4,200,000)+(2% of $4,200,000)=$4,852,000

Lowest offer price is from UCcosting $4,338,000 . So price score of UC would be 100 .

Company	Bid price	Difference in bid price with lowest bid price	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team
OR LLC	$4,470,000	$132,000	(100−1)=99	(45+9+35)=89
WC	$4,459,000	$121,000	(100−1)=99	(45+10+40)=95
UC	$4,338,000	$0	100	(42+8+32)=82
DC	$4,852,000	$514,000	(100−5)=95	(49+9+39)=97

Now price and quality are given equal weightage of 50% each.

Thus weighted score of tender would be

Company	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team	Weighted average score
OR LLC	(100−1)=99	(45+9+35)=89	(0.50×99+0.50×89)=94
WC	(100−1)=99	(45+10+40)=95	(0.50×99+0.50×95)=97
UC	100	(42+8+32)=82	(0.50×100+0.50×82)=91
DC	(100−5)=95	(49+9+39)=97	(0.50×95+0.50×97)=96

Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.

WCshould be awarded the contract under average weighted linear cost method as it has highest average weighted score.

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Answer 4

Question

Chapter 9, Problem 2.4Q

Summary Introduction

Interpretation:Company that would be awarded the contract if categories of quality and price are given equal weight.

Concept introduction: Bidding is the process used to select the contractor who would do the required work at lowest price. It is the simplest procedure where the cost is calculated and the lowest responsive price is selected to get the work done.

Expert Solution & Answer

Explanation of Solution

The procurement department of H hotels is evaluating tenders for its newest hotel resort. Four tenders have been received and tender is being evaluated based on quality and price. Quality is being quantized on a 100 point scale where 50 points is for method statement, 10 points for environmental approach and 60 points for quality and seniority of the company’s project team.

Bid prices are converted based on a 100 point score where lowest price is awarded 100 points and 1 point is penalized for each full $100,000 that price exceeds the lowest price in the group of bids.

Details of bids are as follows:

1.) OR LLC bids $4 million for construction cost; $200,000 for setup costs; $300,000 for overhead and profit; design fees of 5% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$4,000,000+$200,000+$300,000+(5% of $4,000,000)+(1% of $4,000,000)=$4,740,000

2.) WC bids $3.8 million for construction cost; $250,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 1.5% of construction costs.

So total price for bid would be:

$3,800,000+$250,000+$200,000+(4% of $3,800,000)+(1.5% of $3,800,000)=$4,459,000

3.) UC bids $3.6 million for construction cost; $300,000 for setup costs; $150,000 for overhead and profit; design fees of 7% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$3,600,000+$300,000+$150,000+(7% of $3,600,000)+(1% of $3,600,000)=$4,338,000

4.) DC bids $4.2 million for construction cost; $200,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 2% of construction costs.

So total price for bid would be:

$4,200,000+$200,000+$200,000+(4% of $4,200,000)+(2% of $4,200,000)=$4,852,000

Lowest offer price is from UCcosting $4,338,000 . So price score of UC would be 100 .

Company	Bid price	Difference in bid price with lowest bid price	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team
OR LLC	$4,470,000	$132,000	(100−1)=99	(45+9+35)=89
WC	$4,459,000	$121,000	(100−1)=99	(45+10+40)=95
UC	$4,338,000	$0	100	(42+8+32)=82
DC	$4,852,000	$514,000	(100−5)=95	(49+9+39)=97

Now price and quality are given equal weightage of 50% each.

Thus weighted score of tender would be

Company	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team	Weighted average score
OR LLC	(100−1)=99	(45+9+35)=89	(0.50×99+0.50×89)=94
WC	(100−1)=99	(45+10+40)=95	(0.50×99+0.50×95)=97
UC	100	(42+8+32)=82	(0.50×100+0.50×82)=91
DC	(100−5)=95	(49+9+39)=97	(0.50×95+0.50×97)=96

Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.

WCshould be awarded the contract under average weighted linear cost method as it has highest average weighted score.

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Answer 5

Chapter 9, Problem 2.4Q

Summary Introduction

Interpretation:Company that would be awarded the contract if categories of quality and price are given equal weight.

Concept introduction: Bidding is the process used to select the contractor who would do the required work at lowest price. It is the simplest procedure where the cost is calculated and the lowest responsive price is selected to get the work done.

Expert Solution & Answer

Explanation of Solution

The procurement department of H hotels is evaluating tenders for its newest hotel resort. Four tenders have been received and tender is being evaluated based on quality and price. Quality is being quantized on a 100 point scale where 50 points is for method statement, 10 points for environmental approach and 60 points for quality and seniority of the company’s project team.

Bid prices are converted based on a 100 point score where lowest price is awarded 100 points and 1 point is penalized for each full $100,000 that price exceeds the lowest price in the group of bids.

Details of bids are as follows:

1.) OR LLC bids $4 million for construction cost; $200,000 for setup costs; $300,000 for overhead and profit; design fees of 5% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$4,000,000+$200,000+$300,000+(5% of $4,000,000)+(1% of $4,000,000)=$4,740,000

2.) WC bids $3.8 million for construction cost; $250,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 1.5% of construction costs.

So total price for bid would be:

$3,800,000+$250,000+$200,000+(4% of $3,800,000)+(1.5% of $3,800,000)=$4,459,000

3.) UC bids $3.6 million for construction cost; $300,000 for setup costs; $150,000 for overhead and profit; design fees of 7% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$3,600,000+$300,000+$150,000+(7% of $3,600,000)+(1% of $3,600,000)=$4,338,000

4.) DC bids $4.2 million for construction cost; $200,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 2% of construction costs.

So total price for bid would be:

$4,200,000+$200,000+$200,000+(4% of $4,200,000)+(2% of $4,200,000)=$4,852,000

Lowest offer price is from UCcosting $4,338,000 . So price score of UC would be 100 .

Company	Bid price	Difference in bid price with lowest bid price	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team
OR LLC	$4,470,000	$132,000	(100−1)=99	(45+9+35)=89
WC	$4,459,000	$121,000	(100−1)=99	(45+10+40)=95
UC	$4,338,000	$0	100	(42+8+32)=82
DC	$4,852,000	$514,000	(100−5)=95	(49+9+39)=97

Now price and quality are given equal weightage of 50% each.

Thus weighted score of tender would be

Company	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team	Weighted average score
OR LLC	(100−1)=99	(45+9+35)=89	(0.50×99+0.50×89)=94
WC	(100−1)=99	(45+10+40)=95	(0.50×99+0.50×95)=97
UC	100	(42+8+32)=82	(0.50×100+0.50×82)=91
DC	(100−5)=95	(49+9+39)=97	(0.50×95+0.50×97)=96

Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.

WCshould be awarded the contract under average weighted linear cost method as it has highest average weighted score.

Answer 6

Chapter 9, Problem 2.4Q

Summary Introduction

Interpretation:Company that would be awarded the contract if categories of quality and price are given equal weight.

Concept introduction: Bidding is the process used to select the contractor who would do the required work at lowest price. It is the simplest procedure where the cost is calculated and the lowest responsive price is selected to get the work done.

Expert Solution & Answer

Explanation of Solution

The procurement department of H hotels is evaluating tenders for its newest hotel resort. Four tenders have been received and tender is being evaluated based on quality and price. Quality is being quantized on a 100 point scale where 50 points is for method statement, 10 points for environmental approach and 60 points for quality and seniority of the company’s project team.

Bid prices are converted based on a 100 point score where lowest price is awarded 100 points and 1 point is penalized for each full $100,000 that price exceeds the lowest price in the group of bids.

Details of bids are as follows:

1.) OR LLC bids $4 million for construction cost; $200,000 for setup costs; $300,000 for overhead and profit; design fees of 5% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$4,000,000+$200,000+$300,000+(5% of $4,000,000)+(1% of $4,000,000)=$4,740,000

2.) WC bids $3.8 million for construction cost; $250,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 1.5% of construction costs.

So total price for bid would be:

$3,800,000+$250,000+$200,000+(4% of $3,800,000)+(1.5% of $3,800,000)=$4,459,000

3.) UC bids $3.6 million for construction cost; $300,000 for setup costs; $150,000 for overhead and profit; design fees of 7% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$3,600,000+$300,000+$150,000+(7% of $3,600,000)+(1% of $3,600,000)=$4,338,000

4.) DC bids $4.2 million for construction cost; $200,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 2% of construction costs.

So total price for bid would be:

$4,200,000+$200,000+$200,000+(4% of $4,200,000)+(2% of $4,200,000)=$4,852,000

Lowest offer price is from UCcosting $4,338,000 . So price score of UC would be 100 .

Company	Bid price	Difference in bid price with lowest bid price	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team
OR LLC	$4,470,000	$132,000	(100−1)=99	(45+9+35)=89
WC	$4,459,000	$121,000	(100−1)=99	(45+10+40)=95
UC	$4,338,000	$0	100	(42+8+32)=82
DC	$4,852,000	$514,000	(100−5)=95	(49+9+39)=97

Now price and quality are given equal weightage of 50% each.

Thus weighted score of tender would be

Company	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team	Weighted average score
OR LLC	(100−1)=99	(45+9+35)=89	(0.50×99+0.50×89)=94
WC	(100−1)=99	(45+10+40)=95	(0.50×99+0.50×95)=97
UC	100	(42+8+32)=82	(0.50×100+0.50×82)=91
DC	(100−5)=95	(49+9+39)=97	(0.50×95+0.50×97)=96

Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.

WCshould be awarded the contract under average weighted linear cost method as it has highest average weighted score.

Answer 7

Chapter 9, Problem 2.4Q

Summary Introduction

Interpretation:Company that would be awarded the contract if categories of quality and price are given equal weight.

Concept introduction: Bidding is the process used to select the contractor who would do the required work at lowest price. It is the simplest procedure where the cost is calculated and the lowest responsive price is selected to get the work done.

Answer 8

Expert Solution & Answer

Explanation of Solution

The procurement department of H hotels is evaluating tenders for its newest hotel resort. Four tenders have been received and tender is being evaluated based on quality and price. Quality is being quantized on a 100 point scale where 50 points is for method statement, 10 points for environmental approach and 60 points for quality and seniority of the company’s project team.

Bid prices are converted based on a 100 point score where lowest price is awarded 100 points and 1 point is penalized for each full $100,000 that price exceeds the lowest price in the group of bids.

Details of bids are as follows:

1.) OR LLC bids $4 million for construction cost; $200,000 for setup costs; $300,000 for overhead and profit; design fees of 5% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$4,000,000+$200,000+$300,000+(5% of $4,000,000)+(1% of $4,000,000)=$4,740,000

2.) WC bids $3.8 million for construction cost; $250,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 1.5% of construction costs.

So total price for bid would be:

$3,800,000+$250,000+$200,000+(4% of $3,800,000)+(1.5% of $3,800,000)=$4,459,000

3.) UC bids $3.6 million for construction cost; $300,000 for setup costs; $150,000 for overhead and profit; design fees of 7% of construction costs and project risk fee of 1% of construction costs.

So total price for bid would be:

$3,600,000+$300,000+$150,000+(7% of $3,600,000)+(1% of $3,600,000)=$4,338,000

4.) DC bids $4.2 million for construction cost; $200,000 for setup costs; $200,000 for overhead and profit; design fees of 4% of construction costs and project risk fee of 2% of construction costs.

So total price for bid would be:

$4,200,000+$200,000+$200,000+(4% of $4,200,000)+(2% of $4,200,000)=$4,852,000

Lowest offer price is from UCcosting $4,338,000 . So price score of UC would be 100 .

Company	Bid price	Difference in bid price with lowest bid price	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team
OR LLC	$4,470,000	$132,000	(100−1)=99	(45+9+35)=89
WC	$4,459,000	$121,000	(100−1)=99	(45+10+40)=95
UC	$4,338,000	$0	100	(42+8+32)=82
DC	$4,852,000	$514,000	(100−5)=95	(49+9+39)=97

Now price and quality are given equal weightage of 50% each.

Thus weighted score of tender would be

Company	Price score	Quality score = score for method statement + score for environmenta approach + score for quality and seniority of project management team	Weighted average score
OR LLC	(100−1)=99	(45+9+35)=89	(0.50×99+0.50×89)=94
WC	(100−1)=99	(45+10+40)=95	(0.50×99+0.50×95)=97
UC	100	(42+8+32)=82	(0.50×100+0.50×82)=91
DC	(100−5)=95	(49+9+39)=97	(0.50×95+0.50×97)=96

Under linear averaging method score of each tender will be result of sum of individual score in each category multiplied by corresponding category weight.

WCshould be awarded the contract under average weighted linear cost method as it has highest average weighted score.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 9 - Prob. 1DQ Ch. 9 - Prob. 2DQ Ch. 9 - Prob. 3DQ Ch. 9 - Prob. 4DQ Ch. 9 - Prob. 1P Ch. 9 - Prob. 2P Ch. 9 - Prob. 3P Ch. 9 - Prob. 4P Ch. 9 - Prob. 5P Ch. 9 - Prob. 6P

Explanation of Solution

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