Sutrisna, M; Potts, K and Proverbs, D (2004) Quotation mechanism for pre-pricing variations in civil engineering projects: A quest for best practice. Journal of Financial Management of Property and Construction, 9(1), pp. 13-26. ISSN 1366-4387
Abstract
Variations and their valuation have long been recognised as one of the main reasons for conflict and disputes in construction project management. These conflicts and disputes often concern the prices and/or rates to be applied for the valuation. One solution to this problem is by pre-pricing variations and seeking an initial agreement prior to the execution of the varied works, i.e. requesting the contractor to prepare a quotation. The result of a questionnaire survey, conducted to explore the application of this quotation mechanism in civil engineering projects, is presented. Best practice in preparing quotations, including the identification of the essential factors to be considered in preparing quotations for variations in excavation projects are presented, analysed and discussed. It is also found that the quotation mechanism has been perceived effective only in certain conditions and has not been widely adopted in practice. This, on the other hand, opens up an opportunity towards improving the traditional system of managing variations. A best practice model, identifying the most acceptable methodology in charging overheads, selecting the pricing level, profit and contingencies is presented. If adopted, the recommended methodology could increase the likelihood of a quotation for variations being agreed and accepted.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | best practice, contract administration, pre-pricing, quotation, valuation of variation |
| Index terms: | survey, profit, excavation, questionnaire, variation, methodology, pricing, valuation of variation, contract administration, dispute, construction project management, best practice, overheads |
| Subjects: | dispute resolution, business, data collection methods, project management theory and practice, contractual condition, economic analysis, construction operations, financial analysis, contract management, research methods |
| Topics: | Site Management, Contract Administration, Cost Management, Business Strategy, Research Practice, Legal Issues, Project Management |
| Descriptive scope: | 5 PCTEA |
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