What is the best tool for cost control, pricing, and comparing contractor base bids for materials whose precise quantity and scope are unknown at the time of bidding?
The answer is Unit Prices. I initially chose Allowances because the quanitites and scope is indcated to be unknown. In this isntance, is the only thing determining the differnce between the two answsers is the fact that the question idenifies a material? I’m having trouble understanding why it wouldn’t be allowances.
Hi @william,
See the answer explanations:
Unit prices
Correct. The unit price method would be the best method for controlling costs and comparing contractor pricing, as well as controlling and determining future costs when the scope is determined.
For example, one contractor indicates a unit price of $2 per square foot of gravel, while another contractor states $3 per square foot of gravel. This is easily comparable, regardless of the total square footage determined in the future; you are essentially comparing apples to apples. It also provides flexibility in the extent of landscaping required.
Allowances
Incorrect. This is usually a set amount of money used to cover an unknown special material, furnishing, or other scope items. It is not ideal in this instance where the material is known but the quantity or scope is undetermined.
Being a set amount, this would not provide flexibility in the case that the landscaping goes beyond an expected scope. For example, one contractor provides an allowance of $1,000 and another contractor provides an allowance of $5,000. It is difficult to compare these two figures because they are not dependent on a specific scope (or unit); maybe the first contractor is assuming 300 sf or landscaping and the second contractor is assuming 2,500 sf of landscaping. You’re essentially comparing apples to oranges.
Hope this helps!
Kiara Galicinao, AIA, NCARB
Black Spectacles