a one page memo.List the pros and cons of each of the three-project delivery methods Bob mentioned, while applying them specifically to Claire’s situation.Within the memo, draw a diagram to illustrate the organization of the management and contracting relationships for DBB, DB, and CM.Which project delivery method do you recommend to Claire? Why?Based on the delivery method you recommended, should Claire use a contract that is awarded competitively or a contract that is awarded by negotiation? Why?In addition to the main contract for the entire project, Bob informs you, the intern, that there will definitely be a sub-contract with a specialty contractor for the site-work on the project. Should the agreement with the site sub-contractor be a lump sum or a unit-price contract? Why?Should this contract with the site sub-contractor be awarded competitively or negotiated?Keep in mind that you like working for Big Builders and you are considering applying for a job at this company once you have your bachelor’s degree. Therefore, you want to impress Bob with a professional report.
a2_mt_hope_s2019.docx

how_to_use_enr_cost_indexes.pdf

Unformatted Attachment Preview

CEIE-370 CONSTRUCTION SYSTEMS
SPRING 2019
ASSIGNMENT 2
THE MOUNT HOPE PROJECT
PROJECT DELIVERY METHOD
CEIE-370 Construction Systems
Spring 2019
Assignment 2
CEIE-370 CONSTRUCTION SYSTEMS
Assignment 2 – The Mount Hope Project
GETTING STARTED
Setting:
Since the preliminary estimate and further investigations indicated that Claire’s project is feasible,
it is now time to move from the initial concept to final design. In order to do so, Claire will need to
consult an architect and an engineer. Thankfully, Claire had an old friend, Tony Tect, who owned a
local architecture firm and was willing to help. Claire explained her ideas to Tony and he said he
would be happy to produce some drawings for Claire within a few weeks.
Meanwhile, Claire asked Bob Builder if he could advise her about the selection of a design
engineer. Bob recommended she talk to Angie Neer from Eager Engineers & Partners. The
engineering firm was in Charleston, WV, as was Tony’s office. Tony and Angie had completed
several projects together before and knew the value of working hand in hand during the design
phase.
Two weeks passed before Claire, Tony, and Angie met to discuss Tony’s drawings. After Tony
presented his design, Claire made some minor suggestions, but in general was very pleased. Angie
then commented on the design, which started a discussion that went on for another hour. Claire
wasn’t initially comfortable, but later she realized that such discussion is necessary in order to
increase the constructability of a structure. Thus, it was advantageous to have structural decisions
made early in the design phase and not when the building was already under construction.
After the meeting, Tony sat down on his desk and began to incorporate all the changes into the
design. Angie returned to her office to get started on the design for the site preparation. Since Tony
agreed to arrange the necessary permitting, Claire had the chance to concentrate fully on preparing
the marketing information for the project. However, she realized that she needed to know more about
construction project delivery. She had no idea what type of Construction Firm she should utilize for
this project. She decided to get some advice from the developer, Bob Builder.
Bob replied to her with the following memo:
In construction Claire, you have several options for your delivery strategy, including: DesignBid-Build (DBB), Design-Build (DB), and Construction Management (CM). DBB is a very
common way to deliver a construction project using a traditional organization. DBB calls for a
complete design before site work begins and then a single general contractor assumes all the
responsibility for constructing the entire project usually on the terms of a lump-sum contract.
This answer did not really help Claire to understand which type of project delivery method would
be most appropriate for her situation. Also, the methods of awarding a contract and the type of
CEIE-370 Construction Systems
Spring 2019
Page 2 of 4
CEIE-370 Construction Systems
Spring 2019
Assignment 2
contract were confusing to Claire, as she has no prior experience being an owner. Before she could
consider making a final decision, she needed more information and recommendations. Claire sent
Bob an e-mail asking for a more detailed analysis. This is where you come in to help Claire make an
informed decision.
CEIE-370 Construction Systems
Spring 2019
Page 3 of 4
CEIE-370 Construction Systems
Spring 2019
Assignment 2
Assignment 2
Write a professional memo for Claire including the following information:

List the pros and cons of each of the three-project delivery methods Bob mentioned, while
applying them specifically to Claire’s situation.

Within the memo, draw a diagram to illustrate the organization of the management and
contracting relationships for DBB, DB, and CM.

Which project delivery method do you recommend to Claire? Why?

Based on the delivery method you recommended, should Claire use a contract that is
awarded competitively or a contract that is awarded by negotiation? Why?
In addition to the main contract for the entire project, Bob informs you, the intern, that there will definitely
be a sub-contract with a specialty contractor for the site-work on the project.

Should the agreement with the site sub-contractor be a lump sum or a unit-price contract?
Why?

Should this contract with the site sub-contractor be awarded competitively or negotiated?
Keep in mind that you like working for Big Builders and you are considering applying for a job at this
company once you have your bachelor’s degree. Therefore, you want to impress Bob with a professional
report.
CEIE-370 Construction Systems
Spring 2019
Page 4 of 4
[ 1Q COST REPORT ] Indexes
By Tim Grogan
How To Use ENR’s Cost Indexes
R
eaders of ENR generate a steady stream of questions
about the magazine’s indexes and how to accurately
apply them to construction projects. To help clarify
the nature and uses of the cost indexes, here are answers
to the most frequently asked questions as well as suggestions on how to avoid costly mistakes.
What is the difference between
ENR’s Construction Cost Index and its
Building Cost Index?
The difference is in their labor component. The CCI uses 200 hours of common labor, multiplied by the 20-city average rate for wages and fringe benefits.
The BCI uses 68.38 hours of skilled labor,
multiplied by the 20-city wage-fringe average for three trades—bricklayers, carpenters and structural ironworkers. For
their materials component, both indexes
use 25 cwt of standard fabricated structural steel at the 20-city average price,
1.128 tons of bulk portland cement priced
locally and 1,088 board-ft of 2×4 lumber
priced locally. The ENR indexes measure
how much it costs to purchase this hypothetical package of goods compared to the
price in the base year.
What kinds of construction do the
ENR indexes represent?
The two indexes apply to general construction costs. The CCI can be used
where labor costs are a high proportion
of total costs. The BCI is more applicable
for structures.
Where does ENR get its data?
ENR has price reporters who check
prices locally in 20 U.S. cities. The prices
are quoted from the same suppliers each
month. ENR computes its latest indexes
from these figures as well as local union
wage rates.
Does ENR have cost indexes for cities outside the U.S.?
ENR publishes indexes for two Canadian cities, Montreal and Toronto, each
month. ENR’s Fourth Quarterly Cost Report includes the most comprehensive
listing of international costs.
Are materials prices averaged?
No. ENR reporters collect spot prices
from a single source for all the materials
tracked, including those in the index. The
reporters survey the same suppliers each
month for materials that affect the index.
Actual prices within a city may vary depending on the competitiveness of the
market and local discounting practices.
This method allows for a quick indicator
of price movement, which is the indexes’
primary objective.
Do the indexes measure cost differentials between cities?
No. This is one of the more common
errors in the application of ENR’s indexes,
which only measure the trend in an individual city and in the U.S. as a whole. Dif-
Building Cost Index History (1923-2010)
` HOW ENR BUILDS THE INDEX: 68.38 hours of skilled labor at the 20-city average of bricklayers, carpenters and structural ironworkers rates, plus 25 cwt of standard structural steel
shapes at the mill price prior to 1996 and the fabricated 20-city price from 1996, plus 1.128 tons of portland cement at the 20-city price, plus 1,088 board-ft of 2×4 lumber at the 20-city price.
ANNUAL AVERAGE
1923
186
1924
186
1925
183
1926
185
1927
186
1928
188
1929
191
1930
185
1931
168
1932
131
1933
148
1934
167
1935
166
1936
172
1937
196
1938
197
1939
197
1940
203
1941
211
1942
222
1943
229
1944
235
1945
239
60
N
ENR
N
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
262
313
341
352
375
401
416
431
446
469
491
509
525
548
559
568
580
594
612
627
650
676
721
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
790
836
948
1048
1138
1205
1306
1425
1545
1674
1819
1941
2097
2234
2384
2417
2425
2483
2541
2598
2634
2702
2751
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
JAN.
FEB. MARCH APRIL
MAY
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.
ANNUAL
AVG.
2784
2886
3071
3112
3127
3332
3363
3425
3503
3545
3581
3648
3767
4112
4335
4432
4557
4782
4800
2775
2886
3106
3111
3131
3333
3372
3417
3523
3536
3581
3655
3802
4116
4337
4432
4556
4765
4812
2828
3071
3125
3096
3161
3377
3374
3422
3558
3547
3612
3660
3955
4189
4331
4475
4599
4773
2838
3066
3115
3095
3178
3396
3379
3433
3553
3572
3624
3677
3996
4195
4340
4471
4640
4771
2845
3038
3107
3114
3190
3392
3382
3460
3545
3625
3652
3684
4013
4197
4356
4493
4723
4762
2854
3014
3109
3121
3223
3385
3391
3474
3546
3605
3648
3712
4027
4210
4360
4515
4733
4768
2857
3009
3116
3109
3246
3378
3414
3504
3539
3597
3655
3717
4103
4242
4375
4533
4827
4764
2867
3016
3116
3117
3284
3372
3423
3505
3547
3602
3651
3745
4129
4265
4431
4535
4867
4762
2873
3029
3109
3131
3304
3350
3424
3498
3541
3596
3654
3766
4128
4312
4462
4558
4847
4757
2875
3046
3110
3128
3311
3370
3419
3497
3548
3577
3640
3758
4123
4329
4441
4556
4797
4795
2834
2996
3111
3112
3203
3364
3391
3456
3539
3574
3623
3694
3984
4205
4369
4486
4691
4769
2799
2915
3116
3103
3135
3323
3368
3411
3536
3541
3597
3649
3859
4127
4330
4411
4571
4767
4811
2809
2976
3127
3100
3148
3364
3375
3421
3534
3541
3583
3652
3908
4168
4335
4416
4574
4761
BASE: 1913=100
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ferentials between cities may reflect differences in labor productivity and building
codes. Moreover, price quotations for
lumber and cement vary from one city to
another. One city may report list prices,
while in another city prices for the same
material may include discounts.
Are indexes seasonally adjusted?
No. This is an important point for users of the indexes to keep in mind. Wages,
the most important component, usually
affect the indexes once or twice a year.
Cement prices tend to be more active in
the spring, while fabricated structuralsteel pricing tends to have monthly adjustments. Lumber prices, more dependent on local pricing and production
conditions, are the most volatile and can
change appreciably from month to month.
Declines in indexes are most often the result of falling lumber and steel prices.
The study of an index movement for a
period of less than 12 months can sometimes miss these important developments.
Users of an index for individual cities also
should watch the timing of wage settlements. Stalled labor negotiations may
keep the old wage rate in effect longer
than a 12-month period, giving the appearance of a low inflation rate.
Is it more accurate to use an index
2009 8549
8533
that is closest to my home city?
No. The 20-city average index is generally more appropriate. Because it has
more elements, it has a smoother trend.
Indexes for individual cities are more susceptible to price spikes.
Are annual averages weighted?
No. They are straight mathematical
averages.
Are the indexes verifiable?
Yes. ENR’s national indexes are updated in the first week of each month on
the Construction Economics pages, while
indexes for individual cities appear in the
second issue of the month. Prices for the
indexes’ materials component are published in the preceding month on the
Construction Economics pages.
Cement prices are in the first issue of
the month, lumber prices in the third issue and steel in the fourth issue. Wage
rates for all 20 cities are published in the
Third Quarterly Cost Reports. Readers
can compute ENR’s indexes by multiplying the published prices and wages by the
appropriate weights, shown in the tables
below, and summing the results.
Does ENR forecast its indexes?
Yes. ENR projects its BCI and CCI for
the next 12 months once a year in the
Fourth Quarterly Cost Report. To reach
its forecast, ENR incorporates the new
wage rates called for in multiyear, collective-bargaining agreements and estimates
for areas in which new contract terms will
be negotiated. ENR estimates the materials component by studying consumption
forecasts and price trends.
Does ENR ever change the weighting of the index components?
No. The components are always multiplied by the same factors. However, a
component’s share of an index’s total will
shift with its relative escalation rate.
Has ENR ever changed the makeup
of the index components?
Yes—only once, in 1996. ENR was
forced to switch from the mill price for
structural steel to the 20-city average fabricated price for channel beams, I-beams
and wide flanges when ENR’s sources for
mill prices left the structural market.
Does ENR revise the indexes?
Yes. On some occasions, ENR must
revise the indexes. For example, ENR revised its March 2004 indexes shortly after
their initial publication to reflect the huge
surcharges being placed on structural
steel. Revisions to national indexes are
published below. Revisions to indexes for
individual cities are published in the tables
on the following pages. N
8534
Construction Cost Index History (1919-2010)
` HOW ENR BUILDS THE INDEX: 200 hours of common labor at the 20-city average of common labor rates, plus 25 cwt of standard structural steel shapes at the mill price prior to
1996 and the fabricated 20-city price from 1996, plus 1.128 tons of portland cement at the 20-city price, plus 1,088 board-ft of 2×4 lumber at the 20-city price.
ANNUAL AVERAGE
1919
198
1920
251
1921
202
1922
174
1923
214
1924
215
1925
207
1926
208
1927
206
1928
207
1929
207
1930
203
1931
181
1932
157
1933
170
1934
198
1935
196
1936
206
1937
235
1938
236
1939
236
1940
242
1941
258
1942
276
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
290
299
308
346
413
461
477
510
543
569
600
628
660
692
724
759
797
824
847
872
901
936
971
1019
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1074
1155
1269
1381
1581
1753
1895
2020
2212
2401
2576
2776
3003
3237
3535
3825
4066
4148
4182
4295
4406
4519
4615
4732
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
JAN.
FEB. MARCH APRIL
MAY
JUNE
JULY
AUG.
SEPT.
OCT.
NOV.
DEC.
ANNUAL
AVG.
4777
4888
5071
5336
5443
5523
5765
5852
6000
6130
6281
6462
6581
6825
7297
7660
7880
8090
8549
8660
4773
4884
5070
5371
5444
5532
5769
5874
5992
6160
6272
6462
6640
6861
7298
7689
7880
8094
8533
8672
4801
4965
5262
5405
5433
5572
5837
5881
6006
6233
6288
6512
6642
7064
7398
7691
7942
8141
8574
4818
4973
5260
5408
5432
5597
5860
5895
6039
6238
6318
6532
6694
7109
7415
7700
7939
8185
8578
4854
4992
5252
5409
5484
5617
5863
5921
6076
6225
6404
6605
6696
7126
7422
7721
7959
8293
8566
4892
5032
5230
5424
5506
5652
5854
5929
6091
6233
6389
6592
6733
7188
7479
7723
8007
8362
8564
4891
5042
5255
5437
5491
5683
5851
5963
6128
6224
6391
6589
6741
7298
7540
7763
8050
8557
8586
4892
5052
5264
5437
5511
5719
5848
5986
6134
6259
6397
6579
6771
7314
7563
7883
8045
8623
8596
4896
5058
5278
5439
5519
5740
5838
5995
6127
6266
6410
6578
6794
7312
7630
7911
8092
8602
8592
4889
5059
5310
5439
5524
5744
5858
5991
6127
6283
6390
6563
6782
7308
7647
7888
8089
8551
8641
4835
4985
5210
5408
5471
5620
5826
5920
6059
6221
6334
6538
6695
7115
7446
7751
7967
8310
8570
4772
4927
5106
5381
5435
5537
5759
5875
5986
6202
6279
6502
6627
6957
7309
7692
7856
8109
8534
8671
4766
4946
5167
5405
5432
5550
5799
5883
6008
6201
6286
6480
6635
7017
7355
7695
7865
8112
8528
BASE: 1913=100
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[ 1Q COST REPORT ] ENR Indexes
ENR Cost Indexes in 20 Cities, 1984-2010
ATLANTA
1913=100
BCI
% CHG.
BALTIMORE
CCI % CHG.
BCI % CHG.
CCI
BIRMINGHAM
% CHG.
BCI
% CHG.
BOSTON
CCI % CHG.
BCI % CHG.
CHICAGO
CCI % CHG.
BCI % CHG.
CCI % CHG.
1984 Dec.
1970.00 +0.5
2898.53
1985 Dec.
1981.18 +0.6
2909.71 +0.4 2244.66 +1.4 3236.90 +2.5 2018.61
1986 Dec.
2089.63 +5.5
3018.67 +3.7 2321.63 +3.4 3372.26 +4.2 2021.91 +0.2 3083.92 +1.5 2693.11 +0.1 4722.66 +0.8 2548.06 +3.3 4495.88 +2.9
1987 Dec.
2134.12 +2.1
3094.92 +2.5 2344.46 +1.0 3560.91 +5.6 2134.34 +5.6 3251.65 +5.4 2923.07 +8.5 4941.39 +4.6 2710.76 +6.4 4686.53 +4.2
1988 Dec.
2157.86 +1.1
3107.63 +0.4 2366.33 +0.9 3576.83 +0.4 2122.06
1989 Dec.
2202.12 +2.1
3141.55 +1.1 2432.35 +2.8 3707.17 +3.6 2187.80 +3.1 3413.76 +2.5 3090.66 +3.2 5373.14 +4.6 2856.93 +3.1 4957.69 +2.3
1990 Dec.
2233.80 +1.4
3191.55 +1.6 2579.90 +6.1 3884.43 +4.8 2149.96
1991 Dec.
2278.83 +2.0
3224.67 +1.0 2508.06
1992 Dec.
2404.75 +5.5
3348.42 +3.8 2607.76 +4.0 3997.47 +3.6 2279.26 +4.1 3665.33 +5.7 3355.57 +8.2 5973.33 +4.4 3162.99 +4.2 5643.78 +4.8
1993 Dec.
2458.75 +2.3
3389.89 +1.2 2787.51 +6.9 4171.75 +4.4 2485.05 +9.0 3919.97 +7.0 3624.03 +8.0 6380.25 +6.8 3347.46 +5.8 5962.58 +5.7
1994 Dec.
2480.55 +0.9
3430.97 +1.2 2830.66 +1.6 4198.95 +0.7 2439.28
1995 Dec.
2412.12
3381.41
1996 Dec.
2623.59 +8.8
3601.31 +6.5 3066.06 +8.8 4544.51 +5.1 2676.67 +6.7 4264.98 +4.8 3844.53 +8.3 6772.20 +5.7 3738.78 +8.5 6743.46 +6.5
1997 Dec.
2669.39 +1.8
3690.27 +2.5 3035.06
1998 Dec.
2779.82 +4.1
3772.43 +2.2 3099.25 +2.1 4534.38 +0.7 2635.45
1999 Dec.
2816.44 +1.3
3849.39 +2.0 3084.37
–0.5 4564.19 +0.7 2753.26 +4.5 4472.05 +5.7 3841.79 +2.2 7103.92 +2.6 4029.25 +5.8 7464.71 +5.3
2000 Dec.
2947.56 +4.7
4105.86 +6.7 3074.95
–0.3 4532.08
2001 Dec.
2928.63
4045.52
2002 Dec.
2942.62 +0.5
4189.12 +3.6 3173.97 +2.9 4580.15 +0.8 2829.85 +1.9 4686.49
2003 Dec.
3018.37 +2.6
4374.69 +4.4 3391.75 +6.9 4818.78 +5.2 2916.01 +3.0 4904.07 +4.6 4213.59 +6.6 7976.09 +5.7 4421.79 +4.7 8348.45 +4.8
2004 Dec.
3321.80 +10.1
4611.31 +5.4 3692.89 +8.9 5166.87 +7.2 3135.77 +7.5 5123.83 +4.5 4467.08 +6.0 8229.58 +3.2 4821.71 +9.0 9351.32 +12.0
2005 Dec.
3599.04 +8.4
4829.74 +4.7 3923.27 +6.2 5374.45 +4.0 3380.73 +7.8 5588.47 +9.1 4925.47 +10.3 9172.36 +11.5 5113.15 +6.0 10125.85 +8.3
2006 Dec.
3624.54 +0.7
4893.35 +1.3 3913.23
2007 Dec.
3625.64
5259.37 +7.5 4032.66 +3.1 5472.73 +1.8 3468.51 +6.6 5561.15 +1.9 5384.61 +3.7 9963.61 +5.3 5582.09 +4.0 11137.98 +5.9
–2.8
–0.6
0.0
–0.4 2213.32 +0.1 3158.77 +1.7
–1.4 2818.21
–2.8 3858.19
2054.54 +1.3 3074.83 +3.1 2621.39 +3.8 4497.40 +7.0 2466.42 +1.6 4319.75 +2.0
–1.7 3037.76
–1.2 2689.49 +2.6 4685.85 +4.2 2467.17
0.0 4367.28 +1.1
–0.6 3331.21 +2.4 2995.07 +2.5 5137.58 +4.0 2771.39 +2.2 4844.48 +3.4
–1.7 3426.41 +0.4 3110.03 +0.6 5614.79 +4.5 2893.60 +1.3 4998.80 +0.8
–0.7 2189.75 +1.9 3466.21 +1.2 3102.31
–0.3 5722.50 +1.9 3034.72 +4.9 5384.16 +7.7
–1.8 3940.28 +0.5 3601.94
–0.6 6404.34 +0.4 3415.62 +2.0 6177.81 +3.6
–0.4 4324.86 +3.0 2509.21 +2.9 4069.43 +3.3 3549.18
–1.5 6407.28 +0.1 3446.51 +0.9 6333.93 +2.5
–1.0 4502.11
–0.9 2688.19 +0.4 4310.28 +1.1 3686.77
–0.7 2730.60
–2.0 4230.88
–4.1 6747.28
–0.4 3621.15
–0.8 4504.66 +0.7 3879.93 +1.0 6986.61
–3.8 5460.20
–1.7
–1.7 4167.18 +3.4 7747.96 +3.8
–1.5 3085.15 +0.3 4542.29 +0.2 2778.57 +1.8 4716.58 +4.7 3935.71 +1.4 7042.39 +0.8 4135.30
–0.3 5377.71 +0.1 3252.45
–3.2 6625.83
–1.8 3759.22 +2.0 6921.04 +2.6 3809.94 +5.2 7086.96 +7.0
–0.8 7679.62
–0.9
–0.6 3951.79 +0.4 7546.61 +7.2 4221.90 +2.1 7965.18 +3.7
–2.3 5192.21 +5.4 9462.63 +3.2 5367.50 +5.0 10522.78 +3.9
2008 Jan.
3621.32 +0.3
5255.05 +7.7 4034.41 +3.6 5474.48 +2.1 3470.26 +6.9 5562.90 +2.0 5386.36 +3.9 9965.36 +5.4 5583.84 +4.2 11139.73 +5. …
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