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Construction Documents

The contract documents define the work and the agreement between owner and contractor. They include the drawings/plans (what to build, graphically), the specifications (written instructions on the quality of materials and workmanship), the general and special conditions, the agreement, plus addenda (issued before bidding) and change orders (issued during construction).

Estimating turns these documents into a price. A quantity takeoff measures the work; the direct cost (labor, materials, equipment) is increased by a markup (overhead + profit) to give the bid price. During construction the contractor submits progress billings; the owner withholds a retention (commonly 10%) until completion.

$$\text{Bid}=\text{Direct Cost}\times(1+\text{markup}), \qquad \text{Net payment}=\text{Billing}\times(1-\text{retention})$$

★ Written Construction Instructions

Which contract document gives the written instructions describing the required quality of materials and workmanship?

The specifications. Drawings show geometry and location; specifications state quality, standards, and methods. Where they conflict, the contract's order of precedence governs. Final answer: specifications.

★ Bid Price from Markup

A project has a direct cost of P850,000. If the contractor applies a 20% markup, determine the bid price.

$$\text{Bid}=850{,}000\times(1+0.20)=850{,}000\times1.20$$
$$=\text{P}1{,}020{,}000$$

Final answer: P1,020,000.

★★ Markup Percentage

A winning bid is P1,200,000 against a direct cost of P960,000. Determine the markup as a percentage of the direct cost.

$$\text{Markup}=1{,}200{,}000-960{,}000=240{,}000$$
$$\%=\frac{240{,}000}{960{,}000}\times100=25\%$$

Final answer: 25% of direct cost.

★★ Progress Billing with Retention

A contractor's progress billing for completed work is P600,000. If the owner withholds a 10% retention, how much is the net payment for this billing?

$$\text{Net}=600{,}000\times(1-0.10)=600{,}000\times0.90$$
$$=\text{P}540{,}000$$

Final answer: P540,000 (P60,000 held as retention).

★★★ Current Progress Payment Due

A P8,000,000 contract is 45% complete. The owner retains 10% of the value of work done, and the contractor has already received P2,500,000 in previous payments. Determine the amount currently due.

Value of work done to date, then deduct retention and prior payments.

$$\text{Work done}=0.45\times8{,}000{,}000=3{,}600{,}000$$
$$\text{Earned (less retention)}=3{,}600{,}000\times0.90=3{,}240{,}000$$
$$\text{Due now}=3{,}240{,}000-2{,}500{,}000=\text{P}740{,}000$$

Final answer: P740,000.

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Exam Generator Problems

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Question Bank: w104

MSTE - Construction / Construction Documents / MSTE November 2019

These are written instructions detailing how the facility is to be constructed.

  1. plans
  2. estimates
  3. specifications
  4. bid documents
Construction specifications are the written instructions describing the technical requirements, materials, methods, and standards for constructing a facility. (Plans are graphical drawings; estimates give quantities and costs; bid documents are the package used for bidding.)
$\boxed{\text{specifications}}$