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Factors Affecting the Accuracy of a Pre Tender Estimate in Construction Projects

A pre tender estimate is the final costing of construction works carried out by a quantity surveyor before tenders are received. It is a critical task that can affect the success of a project.

Clients’ and consultants’ information disclosure policies on the release of pre-tender estimates are crucial in determining the accuracy of the estimates. This study seeks to identify these factors.

Factors Affecting the Accuracy of Pre-Tender Cost Estimates

A pre tender estimate is an important tool for a construction project team. It can help them avoid costly mistakes and save money. It also helps them make decisions about the type and quantity of materials required. However, a pre tender estimate must be accurate to be useful. This is because inaccurate estimates can cause delays and cost overruns. It is therefore important to choose a qualified and experienced consultant.

The study found that the most important factors affecting the accuracy of pre tender estimates were detailed specifications, clear and detailed drawings and specification, a consultant’s experience, and the project team’s experience. This result agrees with the findings of previous studies by Akintoye (2000), Al-Khaldi (1990), and Trost and Oberlender (2003). The least important factor was the client’s method of payment. This result is somewhat contradictory to the finding by Odusami and Onukwube (2008) that the client’s method of payment has a significant impact on the accuracy of a pre tender estimate.

A pre-tender estimate is an initial estimate of the construction costs of a project. This is usually prepared by the Quantity Surveyor before calling for tenders. It is a final check to ensure that the design has been fully costed and that any changes to the original cost plan have been captured. This allows the Quantity Surveyor to compare side by side all offers received and identify any deviations from the estimated budget.

The Accuracy of Pre-Tender Cost Estimates in the Gaza Strip

The aim of this study was to identify, evaluate and rank essential factors affecting the accuracy of pre tender cost estimates in construction projects from the clients’ and consultants’ point of view. This was achieved by means of a questionnaire survey. The target population consisted of a selection of diverse public client organisations and consultancy organisations experienced in tendering and cost estimation.

The most influential factor affecting the accuracy of a pre-tender estimate was materials (prices/availability/supply), followed by labour, equipment and the project location. These factors were ranked as the most important by both clients and consultants. Moreover, the results of this research are consistent with those of previous studies conducted by Akintoye (2000), Elhag, Boussabaine and Ballal (2005), and Odusami and Onukwube (2008).

The five least influential factors regarded by both clients and consultants were the impact of government regulations requirement, project location, type of structures, size of estimating team, and social and cultural impact. Clients and consultants agreed that these factors have a low influence on the accuracy of a pre-tender estimates, probably because cities and towns in the Gaza Strip are well accessible with the use of road infrastructure. This is also consistent with the finding of Enshassi et al. (2007) that the release of information about client’s valuation prior to bidding can cause aggressive bidder behaviour in transportation projects.

Accuracy of Pre-Tender Cost Estimates in the Gaza Strip – Clients’ Perspective

Using the questionnaire survey method and the RII to rank factors, clients and consultants separately evaluated and ranked 64 estimating factors. The most important estimating factor was material (prices/availability/supply/quality/imports), followed by closure and blockade, consultant skill level and project team experience. Other significant estimating factors were incomplete scope definition and tendering period. Unexpected adverse site conditions and quality of labor productivity also were ranked as significant risk factors for cost estimation.

In addition to the aforementioned estimating factors, contingencies were considered essential in pre tender cost estimates. Contingencies are a way to protect against risk events that may affect project costs and to ensure that a project can be completed within budget. Contingency estimates can be determined through a variety of methods, including deterministic percentage estimation and probabilistic risk-based estimating.

Clients and consultants emphasized the importance of understanding the estimating process in order to prepare accurate pre-tender cost estimates. They recommended that contractors should provide clear and detailed drawings and specifications, make use of historical cost data from reliable sources and hire a qualified technical staff. They also advised that the preparation of a quality pre-tender estimate is an integral part of the construction process and should be given appropriate attention by all parties. Finally, they advised that they should review and monitor the performance of their cost estimates on a regular basis.

Accuracy of Pre-Tender Cost Estimates in the Gaza Strip – Consultants’ Perspective

Professional estimators have the opportunity to use high visibility cost and productivity references for the estimation of labour, material and equipment items. Therefore, they are able to focus on these factors, as they are the most important and influential. However, other less visible factors may also impact on the accuracy of pre tender estimates. These less visible factors are often neglected by the estimators. The aim of this study is to identify these less visible factors and compare their relative importance with the major ones.

The research was based on a literature review and five face-to-face interviews with clients and consultants. A questionnaire survey was then constructed and distributed to respondents from both client organisations and consultancy firms. The results were analysed using the RII method.

Both client and consultant groups agreed on the top ten most important factors that affect the accuracy of pre tender cost estimates. The results of the Spearman’s rank correlation test indicated a high level of concordance between the two groups. This confirms the importance of these factors and provides a level of validation for this study. The results also indicate that the importance of these factors is relatively stable over time. This is in line with the findings of previous studies by Akintoye (2000), Elhag, Boussabaine and Ballal (2005) and Odusami and Onukwube (2008).