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TAMANG PAG COMPUTE NG UNIT COST. BAKIT MAHAL MANINGIL SI CONTRACTOR? "[ENG SUB]" - YouTube
Channel: INGENIERO TV
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How are you?
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Thank you for visiting.
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Why are contractors expensive?
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These are the legit construction companies if you will build a house.
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What are the things they consider on their price?
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My tip for you is I will show you how to get the unit cost.
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This is what the contractor uses when they're pricing.
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We will see if your budget is enough on the price of a contractor.
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For those who don't know me yet, I am Donald Deniega.
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I am a Professional Civil Engineer.
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The purpose of this vlog is for information only.
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The tips I am giving are based on my personal experience.
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What is the basis of contractors on the price they give?
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These are the legit construction companies.
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The meaning of legit is, they have their own office.
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Because they have their own office, they have regular employees.
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They have their own engineers, site engineers, estimator, office boy, and secretaries.
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Because these are regular employees, rain or shine, even if they have project or not
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they have a monthly salary.
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All of that is in the overhead.
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There are also expenses in the office, like electricity, water, papers, and ballpen.
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That’s where OCM comes in.
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What is OCM?
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This is the Overhead, Contingencies. and Miscellaneous.
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It isexcept in the profit.
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I will explain to you what is OCM.
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I will also show you how to compute the unit cost.
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This is what the contractor uses in the price that they are giving.
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"Engineer, there are contractors who don't have an office, but their price is still expensive."
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This is what we called a "small-scale company."
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They don't have an office, but they have a company name.
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Because they have a company name, they are paying tax.
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But they still have OCM.
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For you to have an idea so that when the contractor gives you a price
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you will not be surprised.
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I'm always saying the price of it when you're building a house
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aside from the design you want, the material you will use, and the workers who will build your house.
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If a legit construction company will build you house
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the technology or the process in building your house is a bit advance
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like the materials and equipment that will be used in your house.
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They have a process like progress billing.
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What is progress billing?
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This is the way of their billing based on the percentage they have finished.
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Meaning, you will less experience losing money even if you're house is not finished.
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If you want to know about progress billing, I have a vlog about that.
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I will put the link in the description box below.
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Watch it.
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Another process of a legit construction company in giving a price is
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they are giving the schedule of work like this one.
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The start of the project is in there, from mobilization to execution.
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You will also see the activities, how many days the project will be completed
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and the total duration, if how many months and year will they do your house.
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"Engineer, it's only for high-rise building and for big constructions."
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It's is true because there's a budget involved.
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Meaning, the contractor must hire a planning engineer to make a schedule.
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It's not free.
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Meaning, it is an additional cost in the overhead.
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So, the percentage that the contractor needs to consider for the price they will give will increase.
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Even the equipment that the contractor will use has a price.
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It has a budget in the unit cost.
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Of course, in return for this, you will have security
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less stress in building a house, and the quality also
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because they have a process in building a house.
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"Engineer, the wholesale workers, and small-scale constructions has also quality."
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I'm not saying that the wholesale workers and small-scale construction have no quality.
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There's just a problem if your budget is limited
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because the contractor will match the price or your budget.
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He will decrease the price so that he will get the project
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so the risk that your house will not be finished increases
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because the things that need to be considered like contingency was neglected.
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You will notice in small-scale constructions that the workers have no safety gear.
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I can't blame them because their budget is limited.
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If the contractor will consider that, he will put miscellaneous for the safety gears of the workers
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the price that he will give to you will increase.
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In that situation, you will say that "A contractor is expensive."
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Now, let's talk about how to compute the unit cost.
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What is OCM, and what does it consider?
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Getting the unit cost and analyzing it is like this.
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This is the BOQ or the Bill of Quantities.
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This is what the contractor gives to you when he's contracting your house.
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This is different from BOM or Bill of Materials.
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Because in the description of the Bill of Materials, it states the materials you will need.
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For example, you need cement, hollow blocks, and tiles
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that's what written here in the description of BOM because those are the material you will be needing.
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So you will notice in the Bill of Materials or BOM, the unit here is not square meter
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the unit here is per piece.
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For example, how many steels and hollow blocks
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and in unit cost is the price of it in the construction supply.
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That's what written in the BOM.
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Unlike in BOQ, what is written in the description are the works that the contractor will do.
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For example, CHB Laying.
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This is the laying of hollow blocks.
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How will the contractor price that?
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That's what written in the unit cost.
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So you will notice that the unit here in BOQ or Bill of Quantities is per square meter
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because those are the activities or work that the contractor will do.
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I will just take a sample.
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Let's just make this simple so that it can be understood easily.
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For example, here in masonry works, the written there is CHB laying.
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This is what the contractor or the workers will do
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How much will he price the 10 square meter CHB laying?
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Now, in analyzing, this is the format.
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The three items, which are material, labor, and equipment, are included there.
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This format will not be changed.
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This is always the format in analyzing the unit cost.
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The written here in the unit cost is CHB Laying, and its quantity is 10 square meters.
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You will put all the material you need to finish 10 square meters of CHB Laying in the materials column.
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There's CHB because of course, you need hollow blocks for CHB Laying.
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There's the cement and sand for the mortar.
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You will put all the materials here.
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Your basis in materials 10 square meters.
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For example, in quantity, how many pieces of hollow blocks do you need to finish 10 square meters?
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It's the same in cement and sand.
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So you will notice that even the empty sack and nylon string you will use is written there.
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Put in the materials column all materials that you need to buy to complete the 10 square meters.
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Here in the unit cost column, write the price of the construction supply for that material.
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If how much per piece did you bought it.
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What other contractors do is, here in materials, if how much is the total for materials
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they're putting a mark up right away.
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Sometimes, 10% or 20% because the price of materials is changing.
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We don't know.
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Personally, I'm not doing that.
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I'm putting it in the OCM.
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I will explain later what is OCM.
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Now, these are the materials you will need for 10 square meters.
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Let's proceed in the labor.
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This is the labor you need to complete the 10 square meters wall or the CHB Laying.
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Of course, you need a mason, and the mason needs a helper or labor.
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In the number column, it's the number of workers you need to complete 10 square meters
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and how much is their rate.
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There's ₱650 and ₱550 for the labor.
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This rate depends on the location.
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In the province, maybe it's a bit low-priced.
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In the city, maybe it's a bit expensive.
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Their prices are different.
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In the number of days column, if how many days will you do 10 square meters.
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In equipment...
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We don't have the equipment because, for example, you will just build a bungalow
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It's just one floor, so you don't need equipment to carry hollow blocks.
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But if it's the third floor and above, you need equipment
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so you can put the equipment here if there's any.
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We have no equipment, so it's zero.
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In equipment, number, rate/day/ and number of days are written here
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so it's like the labor.
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How many equipments do you need?
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How much is its rate per day, or how much is its rent?
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And is how many days will you use the equipment.
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You will also put that in this section.
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If you got the total direct cost
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that's the DC, the ₱8,460.
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Its OCM of 10% of the DC is ₱846.
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OCM is the most important of all that you need to consider.
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Others, if they have no OCM, their price is low, but the risk is high.
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The same as overhead
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if you have expenses in overhead like you have engineer, timekeeper
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and you did not consider it there, you will be short of budget.
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Second is the contingency.
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It is important.
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Contingency is the activities that can happen, but you don't know when
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but it can't be avoided.
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For example, the increasing price of materials.
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It can happen, but you don't know when, and you can't avoid that.
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You will get the budget in contingency.
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The second example is in the place where you're building a house, they closed the road.
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The supply of materials will be affected, and your project will be delayed.
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You will make temporary access, you will spend
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you will also get the budget for that n contingency.
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Another example is, you're digging a foundation
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you lay steels for the foundation, you also put columns, and you will pour today.
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It suddenly rains.
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Your foundation is filled with water again.
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What would you do?
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Your work stopped, you will remove the water from your foundation tomorrow
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you will clean the steels
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it's an additional cost.
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What likely to happen when you did not consider contingency
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is you will get a budget from other items.
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What will happen is you will be short of budget.
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That's the situation where you have no budget anymore, but your house is still not finished
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because you're not considering the contingency.
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Many can happen on the site.
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It depends on the situation.
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So sometimes, if the contractor is not analyzing carefully his price on contingency
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he will really be short of budget.
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The thins included in miscellaneous are your expenses on site
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in office or, for example, ballpen, and snacks.
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So sometimes, if you will go to your house that you're building
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and the contractor gave you snacks
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and you're happy because you think it's free.
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It's your money that is written in miscellaneous.
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That's what the contractor spends that he considers in OCM.
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This 10% depends on the contractor.
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It can be 10% or 15%, it depends on how he will analyze it.
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So the unit cost in every contractor is different.
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They're not the same.
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So you will wonder when you're asking for the quotation of every contractor
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they're giving different prices.
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There's a low price, and there's an expensive price.
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It depends on how they're analyzing it.
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So if they want to lower the price, they will lower it here.
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They will lower the percent. They will make it as 3%.
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It can be 5%.
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He will remove the overhead cost
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because the contractor will be the site engineer, purchaser, and quality control also.
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So the price of OCM will decrease.
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In profit which is 5%, 5% of its direct cost, and 5% of its OCM.
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So the total profit that he considered here is ₱465.30.
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The profit is also not fixed.
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It also depends on the contractor, if how many percent will he consider.
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It can be 5%, 6%, or 7%.
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It depends on him.
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Here, in value-added tax, it does not change.
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This is really the percentage of value-added tax because this is the tax you're paying to the government.
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What's written here is 12%.
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Look.
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Let's remove the OCM and profit.
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The 12% that the contractor considers in the price is a huge amount of money.
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So sometimes, you're wondering why the contractor is expensive.
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The 12% markup is a huge amount of money.
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So the ₱10,943.86 total cost is the total cost for 10 square meters.
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To get the price per squaremeter, divide ₱10,943.86 to 10 square meters.
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You will get ₱1,094.39
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This is your multiplier in the items in BOQ.
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For example, let's go back to BOQ.
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We got ₱1,094.39
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You will use that as a unit cost in the project that you're pricing.
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If the project is 30 square meters big
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he will still use this as a unit cost.
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The total cost will be ₱32,831.57
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That's the way to compute the unit cost.
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I just want to flex Kristina Manuel.
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She's one of the reasons why I am on YouTube.
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Maybe, you can support her also.
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Ruzel builders.
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If you want quality and stress-free, this is their Facebook page.
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Visit it.
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Their office is located in Daang Hari, Alabang.
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The owner of this is Ricardo Rick Reyes and Hazel Reyes.
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Hazel Reyes has a YouTube channel.
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Please, support her.
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That's all.
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Thank you for visiting.
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If you think that the information I gave helped you
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please, like this video.
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If you're not subscribed yet to my channel, please subscribe to my channel
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and hit the bell notification below, so that you'll be notified if I have a new upload next time.
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Till next time. Bye!
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