DragnDrop

OVERVIEW OF CC ADJUSTMENTS, MARKUPS, ASSIGNMENTS, AND OVERHEADS

There is a link at the end of this Topic to a step by step example for each of the principles detailed in this Topic.

GENERALLY

EstimatorVJ provides four basic operations (ignoring Vetting adjustments - described in a separate Topic) which can be used to manipulate the costs printed in Reports without altering the prime entries in the Estimate used to generate the final project cost.

These operations are CC Adjustments, Markup, Assignments, and Overhead Spread.

They are only executed when a report is Printed/Previewed with the option “Include Markups” selected, and they only affect the contents of the report, not the estimate itself. After running the report, all of the user’s calculations to build up the estimate are unchanged.

In arithmetic terms, the BID price results from the following formula applied to each item:

Est'd Cost + CCAdj + Markup + Assigned => ADJCost + OH => Bid
where:

Cost is your estimate of cost
CCAdj is a % applied to each Cost Category (CC) or Subcategory component for the item

The item Cost may be 'built-up' using a number of resources, each having a CC (e.g. LA for Labour, MA for material, etc) with each CC having an associated Adjustment defined if needed.

Markup

This is a % markup applied at either the item level, or the Section Level

Assigned

Flags enabling an item's cost to be incorporated into other items and then zeroed

ADJCost

Simply an arithmetic addition of the preceding values

Overhead spread as defined below

The above columns are shown only in Reports with the Option 'Include Markups' ticked.

CC ADJUSTMENTS

This Adjustment is applied to a Cost Category (e.g. LA, MA, etc) by clicking the 'MORE' button in the Project Window, and then entering the Markup % adjacent the desired CC in the list of Cost Categories.

Markup can alternatively be applied at Subcategory Level by clicking the 'MORE' button in the Project Window, clicking the 'Define SubCategories' option, then nominating the SubCategories for each of the Cost Categories using additional two letter codes for each SubCategory and a corresponding markup percentage. You must tick the option 'Use Subcategory Markups' also.

This markup will be shown in the CCADJ column of reports, and is in addition to Section/Item Markups.

Click here for a step by step illustration of the above principle.

MARKUP

Generally

EstimatorVJ provides for a Markup percentage to be set to factor the estimated cost to a higher/lower value to cover costs other than profit and non-project overheads, and a Rounding adjustment (explained later).

(Estimated Cost) + CCAdjustment + (Estimated Cost) * (1.0 + (Markup %)/100.0)) + Rounding => Adjusted Cost

This Markup percentage can be set at the Estimate Section level, or at the Bill Item level.

Markup at Section Level

This is achieved by editing the Section Names, and entering the % as a number in the '%MU' column.

This % will then be added to each item in the matching Section Worksheet, other than those items themselves which have an item markup.

Markup at Item Level

This option is applied in the Section Worksheet, by placing the % markup in the 'MU' column adjacent the item to be marked up.

NOTE: This markup will override any Section Markup.

ASSIGNMENTS

Generally

EstimatorVJ provides mechanisms for re-assigning costs from one place in the estimate to another, without corrupting the source estimate, so that the re-assignment can always be reviewed or reversed if desired.

The re-assignment mechanism moves costs from one or more cost items to one or more cost items, following suitable rules. This allows a user to create a detailed estimate measured and priced not necessarily in the order dictated by the Client's Schedule, then assign (move) the estimated costs to the appropriate Client Schedule items.

The items being re-assigned are termed the 'source' items, and the items receiving the re-assignment are termed the 'destination' items.

NOTE: Overhead and Markup is applied at the source and destination items and is NOW maintained during the transfer process.

Be aware if estimating with multiple currencies, as assignments in the base currency is not currently supported, and will be made in and appear as the bid currency values.

Assignments can be made in Section, Cost, or Rate workup sheets, and are entered into the column registered as the 'Assign' column (by default 'ASSIGN'). The currently registered 'Assign' column is specified in the Project's MORE defaults section.

There are two forms of assignments

Bill Assignments,
and Item Assignments

Bill Assignments

Bill Assignments move money from cost items to Bill Items using Bill References (BQREF) which are predefined in the Bill of Quantities or Client Schedule.

For Example:

2.1.1       End wall to culvert
12.2.1    Concrete apron slab
2/1A       Excavate for strip footings

A source cost item can have it's cost assigned to a destination Bill Item by placing an assignment flag in the form of '>>%BQREF%' in the ASSIGN column adjacent the item to be assigned. For Example, if we want to assign the cost of an item to the 'End wall to Culvert' item shown in the example above, then in the ASSIGN column we would enter the assignment flag '>>2.1.1'.

The source item would then result in having no Cost, with it's cost now being added to the destination cost item.

Many cost items can be assigned to the one destination item, however one source cost item can only be assigned to one destination item.

Furthermore, if the source cost items have the Cost Category breakdowns specified (LA,MA,etc), then the destination items will receive this breakdown as well.

NOTE: The source and destination items MUST HAVE A UNIT - otherwise they are not regarded as cost items and are ignored.

Item Assignments

Item Assignments move money from Cost Items to Cost Items using Pool labels, the term Pool representing a 'pool of money'.

Just as is the case with Bill Assignments, the item to be assigned (source) has it's assignment flag, in the form of '>%PoolLabel%', placed in the ASSIGN column adjacent the item to be assigned. For Example, if we want to assign the cost of an item to the 'Concrete Apron Slab' item shown in the Bill example above, then in the ASSIGN column we could enter the assignment flag '>apronslab'.

The program at the appropriate time would then create a repository (pool) and add this item's cost to that pool, as well as the cost of any other item that has an assignment flag of '>apronslab'.

The item(s) to receive this pool of money labelled 'apronslab' (destination), would then need to have an assignment flag of '<apronslab', and since there may be many destination items, a cost value of not zero to enable a pro-rata allocation of the pooled money since the pro-rata allocation is based on the item('s) cost.

In Summary,

'>label' assign flag for source items
'<label' assign flag for destination items
there must be at least one destination item with a not zero value

It is also possible with Item Asignments, to add a 'weighting' to the destination items by adding the 'weighting' value and a preceding semi-colon to the end of the assignment flag;

e.g. '<label;3'

By default, a destination assignment has a 'weight' of 1, so if some items are weighted and some are not, then the arithmetic will work out correctly.

The weighting factor makes the pro-rata algorithm look at the item as though it's cost = cost * weighting, essentially therefore assigning a larger value to it's assigned cost.

Alternate Assignment Columns

It may come to pass at times where there is a case for Assigning costs in an additional way; e.g. a list of items representing the Construction Program.

Adding another column (say "PROGRAM") to the appropriate worksheets, would enable the Estimate to be 'ASSIGNED' to these 'Construction Program Items' and a report printed.

Simply specify which column name should be used for the assignments, as shown above, before printing the required reports.

OVERHEAD SPREAD (=)

Overhead spread is a method of dispersing Indirect Job Costs (e.g. Preliminaries, Site Staff, Escalation, Mobilisation, Demobilisation, Recurring Overheads, etc) to Direct Job Costs (typically items that are to be reported with a BID value to the client), and in essence is a SPECIAL TYPE OF ASSIGNMENT having it's own column called 'OH' where the source and destination items are flagged.

The source items are those items that have an '=' character entered into the OH column adjacent to the appropriate cost item. Destination items are those items that either do not have an entry in the OH column, or have a weighting (*+-%#) factor in the OH column.

A weighting factor can also be used to increase/decrease the amount destination items receive. This weighting factor is applied as a value preceded by the '*' and placed in the OH column adjacent the appropriate item. e.g. '*2', '*0'. NOTE: This option is NOT available when using the 'Distribute to CC Groups' mode.

The particular weighting of '*0' means this item will not receive Overhead spread - used, for example, in Prime Cost items.

Direct amounts can be added/subtracted by placing the amount in the OH column

e.g '+1000' placed in the OH column would add 1,000 to this item from the pool, whereas '-1000' would subtract 1,000 from this item and add this to the pool.

A special flag '#nnnn' can be used in the OH column. If entered, then the OH amount will be equal to 'nnnn'-AdjustedCost, thus making the BID amount for this item = 'nnnn'. The resultant adjustment is then added/subtracted to the general OH Spread for distribution to the remaining items in the Estimate.

A special flag '%nnnn' can be used in the OH column. If entered, then the OH amount will be equal to 'nnnn'/100*AdjustedCost. The resultant adjustment is then added/subtracted to the general OH Spread for distribution to the remaining items in the Estimate.

At the appropriate time, the program then aggregates the cost of all items designated as overhead (=), and spreads this cost to all items in the Estimate, pro-rata based upon each item's adjusted cost (ADJCOST).

Distributing Overhead according to 'CC'

In normal cases, Overhead is distributed according to each item's ADJUSTED COST, however it has become more prevalent now for Tender Submissions to require the Schedule of Priced Items to be submitted in accordance with a Client's 'CC' Breakdown (e.g. LA, MA, PL). In such cases, there has been a requirement for Tenderers to nominate how much of the General Overhead Distribution is to be applied to each of these Client defined 'CC' groups.

EstimatorVJ accommodates this by means of a setting in the Project's 'MORE' definitions section. Here there are buttons called 'Use CC Distributions' and 'pro-rata to CC's'. When one or both of these are ticked overhead spread gets distributed in one of two ways according to Cost Categories

If BOTH the 'Use CC Distributions' and 'pro-rata to CC's' buttons are Ticked:

The Overhead Spread is distributed over all destination items with a CC equal to one of those that have been selected by placing a tick in the corresponding 'Include OH' check boxes.

In the above example, ALL Overhead will get distributed pro-rata to the 'adjusted cost of MA' in the target items.

If only the 'Use CC Distributions' button is Ticked:

How much is distributed to each 'CC' of the destination items is controlled by the 'CC' making up the source item's cost. If the source of Overhead Spread is "MA", then this source's cost will be spread over the Adjusted Cost of destination items with a CC of "MA".

Accordingly, you can also determine what proportions of the source item is spread to which CC of the destination items.

The following example illustrates one way of achieving this:

The source item for distribution totalling $120,000 will be distributed in the ratio of 50% to Labour, 40% to Material, and 10% to Plant. NOTE that the COST to be distributed in actual fact is the QTY of the parent. In this manner, the COST can be built up in a Quantity Workup Sheet, whereas the distribution ratio can be controlled in the Rate workup sheet.

Considerations

1. Use of the special flags '*+-#' is supported at the destinations

2. There must be a cost for each 'CC' to receive 'CC' overhead distributions. If not, then a message similar to the following will be given:

Alternate 'OH' Columns

It may come to pass at times where there is a case for defining Overhead Distributions in an additional and alternate way.

Adding another column (say "OHALT") to the appropriate worksheets, would enable the Overheads to be distributed in an alternate way.

Simply specify which column name should be used for the OVERHEADS, as shown below, before printing the required reports.

The default column name for Overhead distributions is "OH".

OMITTING ALTERNATIVE COST ESTIMATES

The user can develop two estimates for the same task or group of bill items, review them one against the other, then decide to omit one alternative from the estimate.

This is done by inserting a 0 (zero) in the F column on the same row as the Unit of each bill item which is to be omitted.

As each zero is entered, estimator changes the cost and rate to nil for that item. Where a workup sheet exists for the item, zeros are automatically entered into the F column of the workup sheet opposite each resource.

The estimated costs are ignored when the Item Cost totals are computed for that estimate section. When a resource usage report is run, the resources in the workup sheet for the omitted item will not be counted.

The omission can be reversed by deleting the zero at the bill item level. The software will remove the corresponding zeros from the workup sheet, and redisplay the Item Cost.

If the omission is to be reversed, always make the deletion at the bill item level. If the zeros at the workup sheet level are individually deleted by the user, the zero at the bill item level will remain, and on the next re-rate, the item will again be reset to nil

The omit flag 0 can also be entered at the resource level in a bill item cost or rate workup sheet. Enter the zero into the F column of the workup sheet, and the Item Cost for that resource row will be changed to nil. The user can thus omit the Item Cost for one or two resources while retaining others on the workup sheet.

ILLUSTRATED EXAMPLE

Click here for a step by step illustration of each of the above principles.