Key Components of Preliminary and General Estimating
Breakdown of Cost Elements
Preliminary and General costs encompass a variety of elements essential for the smooth running of a construction site before and during the project’s execution. These can be broken down into several key categories:
- Site Organisation: Includes site set-up costs such as fencing, signage, site huts, and site security. This element ensures the physical site is prepared and maintained for safe and efficient operations.
- Utilities and Services: Temporary services such as water, electricity, and waste management. These are often ongoing and need to be budgeted throughout the project’s lifecycle.
- Temporary Works: Scaffoldings, access routes, and temporary structures required for construction operations.
- Administrative / running Expenses: This includes project overheads, such as the salaries of on-site staff, office supplies, communication systems, and insurance premiums and ongoing rents or hireage.
Time-Related, one of cost-Related, and Lump Sum Items
The breakdown of P&G costs often distinguishes between time-related, one off cost-related/Set up and or lump-sum items:
- Time-Related Items: These are costs incurred over time, such as ongoing site management and security services. They are generally calculated based on the expected duration of the project.
- Running cost-Related Items: Costs linked directly to specific activities or resources, such as utilities, equipment hire, or materials that will only be used temporarily.
- Set up and or Lump Sum Items: Some costs, such as site mobilisation and demobilisation, are fixed and are allocated as a one-off cost regardless of the project’s duration.
Adjustments and Variations
Construction projects rarely follow a perfect path. Adjustments and variations are common, and managing P&G costs in this dynamic environment is crucial.
- Adjusting Preliminaries: When changes arise in a project, preliminaries must be reassessed. This could involve extending the hire period for temporary works or recalculating time-related costs due to programme extensions.
- Provisional and Prime Cost Sums: These are allowances set aside for items that are not fully defined at the time of tendering. Managing these sums effectively ensures that any adjustments remain within budget.
- Contingency Items: Provision for unforeseen costs, ensuring that the budget has the flexibility to address potential issues without derailing the financial plan.
Labour and Resource Management
Efficient management of labour and resources within P&G is essential to avoiding cost overruns and keeping projects on track:
- Labour Pools and General Labour: Labour management, including floating labour content and the role of general labourers, requires careful planning. Accurate allocation ensures productivity without unnecessary overspend.
- Site Personnel Costs: In addition to general labour, P&G estimates must account for the costs associated with the project manager, quantity surveyor, and other key site personnel who contribute to the smooth operation of the project.
Project and Cost Control Mechanisms
Maintaining control of P&G costs throughout the project is crucial for ensuring the overall budget remains aligned with expectations:
- Cost Plans and Monitoring: P&G cost control should be integrated with the project’s broader cost planning framework. Regular monitoring ensures that resources are used efficiently and potential overruns are identified early.
- Elemental Cost Planning Alignment: By aligning P&G costs with elemental cost plans, Quantity Surveyors can ensure a comprehensive approach to cost management that considers both direct construction costs and the necessary preliminary expenditure.
