What is general pricing?

In construction works, general pricing is the process of determining and fixing the costs of various materials, works, equipment, staff, and various other components that are included in the construction of a project. The general pricing in construction works is carried out using the process of estimation.

Estimation

Estimation is the process of determining the quantity and probable cost of various components involved in a construction project. The estimation should be prepared precisely by the estimator after analyzing all the components properly as the inaccuracies in preparation of the estimate cause huge variations in the final construction cost.

Construction estimation

There are two methods of estimating the construction cost of a project- approximate estimation and detailed estimation. Approximate estimation, also known as rough estimation is the technique used to obtain the probable cost of the project in a very short duration of time. The approximate estimation does not include any calculations or measurements, but the approximate cost is obtained through experience, thumb rules, and assumptions. The plinth area method, cubic content method, service unit method, bay method, cost comparison method, and so on are some of the methods used for approximate estimation. Detailed estimation is the most proper and accurate method of estimating the construction cost. In detailed estimation, the detailed quantity of a component required is calculated and then the final cost is calculated by multiplying the unit cost by the total units of component. The general pricing of a construction project includes the following components:

• Pricing of materials
• Pricing of man work
• Pricing of equipment and machinery

Pricing of materials

The majority of the total construction cost consists of the material cost. The materials used in construction can be categorized as building materials, finishers, and fittings. The building materials include cement, sand, aggregate, steel, and timber. The steel being the most expensive costs the most as compared to the other building materials. On average, for a general residential building, steel costs around 25% of the total cost, cement costs around 16% of the total cost, sand costs around 13% of the total cost, and aggregates cost around 8% of the total cost. Hence, in total, the building materials cost around 62% of the total construction cost. The finishers include the bricks, tiles, and paint. On average, for a general residential building, bricks cost around 5% of the total construction cost, tiles cost around 8% of the total construction cost, and paint costs around 4% of the total construction cost. The fittings include windows, doors, electric fittings, and plumbing. On average, for a general residential building, window fittings cost around 3% of the total construction cost, doors cost around 4% of the total construction cost, electrical fittings cost around 7% of the total construction cost, and plumbing along with the sanitary costs around 7% of the total construction cost.

Pricing of man work

Man work includes the money paid to the engineers, supervisors, contractors, and laborers. The cost of labor is fixed by the national authorities and the male and female laborers are paid according to the number of days they work. The daily wages of male and female laborers are fixed as per the national authorities. The engineers and supervisors are paid on the monthly basis. The payment of the contractor is given on a percentage basis of the total construction cost, the details of which need to be specified in the contract before starting the project.

Pricing of equipment and machinery

The pricing of equipment and machinery includes the cost of all the light and heavy equipment and machinery. The light equipment and machinery include drills, grinders, hammers, rammers, trowel, hoe, head pan, tapes, plumb bob, mixer, vibrators, and so on. The heavy equipment and machinery include excavators, backhoes, loaders, trenchers, scrapers, shovels, and so on. If the machinery is rented then the rental cost is also included in calculating the total price of construction equipment. If new machinery is purchased, then the cost price of a machinery is also included in the estimation. The machinery needs to be frequently cleaned and maintained. Hence, cleaning and maintaining cost is also incurred in the pricing of machinery. The rental cost of the place where the machinery needs to be stored on-site is also incurred to the expenses.

Pricing of construction works

The pricing of construction works includes the cost of various works and other processing costs that are incurred during the construction. The various types of cost of construction works include-

• Consultant costs
• Site establishment costs
• Civil works costs
• Service costs
• Finishing costs

Consultant costs

The consultant costs include the cost of the architect, structural designer, plot surveyor, estimator, fees of the government for documentation, permits, and so on.

Site establishment costs

The site establishment costs include the cost of clearing the site by removing the bushes, debris, and other unwanted stuff from the site, the cost of constructing barricades, the temporary office, and the cost of water and electrical supply.

Civil works costs

The civil works cost involves the cost of site excavation, construction of the whole structure, and reinforced cement concrete (RCC) or steelworks. The civil work costs the most during the estimation of the whole construction.

Service costs

The service costs include all the services such as plumbing, electrical, sanitary, firefighting, solar panel installation, rainwater harvesting installation, and lifts.

Finishing costs

The finishing costs include the cost of flooring, plastering, kitchen installations, timber works, waterproofing, plaster of paris (POP) installation, external and internal paintings, window installations, railing installations, and facade works.

On average, out of the total pricing of construction works, the civil works cost the most and the cost of consultant costs the least.

Overhead cost, indirect cost, and other expenses

The indirect cost includes the cost which is not directly linked to the construction activity but contributes towards the total cost of a project. The indirect cost includes the administrative cost, transportation cost, cost of temporary structures built on the site for storage purposes, fees of designers, and legal fees of all the documentation. The overhead cost includes all the extra costs incurred in the construction project due to the delay in any construction activity, improper estimate, rise in the prices of materials, and so on. Other expenses include the cost of plants, such as the Readymix concrete (RMC) plant that needs to be set on the site for the completion of the project where the requirement of concrete is very high.

Context and Applications

The general pricing is useful for the students undergoing the following courses:

• Bachelors in Technology (Civil Engineering)
• Masters in Technology (Civil Engineering)
• Masters in Science (Construction Management)

Practice Problems

1. Which of the following is the process of determining the quantity and probable cost of various components involved in a construction project?

1. Estimation
2. Construction
3. Excavation
4. Designing

Answer: Option a

Explanation: Estimation is the process of determining the quantity and probable cost of various components involved in a construction project.

2. Which of the following is the most proper and accurate method of estimating the construction cost?

1. Detailed estimation
2. Plinth area method
3. Approximate estimation
4. Bay method

Answer: Option a

Explanation: Detailed estimation is the most proper and accurate method of estimating the construction cost.

3. Which of the following is not included in the cost of construction work?

1. Construction costs
2. Civil works costs
3. Transportation costs
4. Finishing costs

Answer: Option c

Explanation: Transportation costs are not included in the cost of construction work.

4. Which of the following is not included in the service costs?

1. Plumbing
2. Solar panel installation
3. Constructing barricades
4. Sanitary

Answer: Option c

Explanation: Constructing barricades is not included in the service costs.

5. Which of the following is not included in the finishing costs?

1. Kitchen installation
2. Site excavation
3. Flooring
4. Plastering

Answer: Option b

Explanation: Site excavation is not included in the finishing costs.