Question

pe of bid for a project is normally done by: me selection of the type of bid for a project is non a. The most experienced subcontractor on the pro b. The builder C. The Designer of Record d. The owner /6 4. (4 points) Your firm completed a highway project in Norfolk in Janua completed a highway project in Norfolk in January 2017 for a cost of $109.8MM. The es long. You also finished an 8 mile highway project of similar scope in January 2018 for er Atlanta, GA and another 10 mile highway near Charleston, WV for $122MM at the same time. istorical cost indexes below, what would be your best estimate for a 6 mile highway job in Fairfax, VA that would be completed January 2021, assuming 4% annual construction cost inflation per year starting January 2019? (show work) City Fairfax Atlanta Norfolk Charleston, WV Index for 1/17 195.6 185.1 180.5 201.5 Index for 1/18 197.6 (187.0 182.3 5 (203. Index for 1/19 199.7 191.7. 184.0 2 09.9 intel Cin. . . .

Answer 1

Hi,

Solution as follows:

To estimate the approximate cost of works at any place cost indices are published by the authorities. These indices are generally published annually, half-early or as the case may be. It is pertinent to note that the costs estimated based on index are not accurate. They can just give an idea and the actual costs may differ during detailed estimation.

To calculate the cost of any place at any time, following formula can be used:

Where,

C1 = Cost of work at any place at any time

I1 = Cost index at that place and that time

C2 = Cost of similar work at different place and different time

I2 = Cost index at different place and different time

Cost index for Fairfax in Jan’2019 (I1) = 199.7

1. Cost of 10 mile highway in January 2019 in Fairfax based on Norfolk cost index

Norfolk cost index in Jan’2017 (I2) = 180.5

Length of highway = 10 miles

Cost in Norfolk in Jan’2017 (C2)= $109.8 MM

2. Cost of 8 mile highway in January 2019 Fairfax based on Atlanta cost index

Atlanta cost index in Jan’2018 = 187

Length of highway = 8 miles

Cost in Jan’2018 = $91 MM

3. Cost of 10 mile highway in January 2019 Fairfax based on Charleston cost index

Charleston cost index in Jan’2018 = 203.5

Length of highway = 10 miles

Cost in Jan’2018 = $122 MM

Based on above 3 results, the probable cost of 6 mile highway in Jan-19 in Fairfax,

= cost of 8 mile highway in 2019 – (Average of cost of 10 mile highways in 2019 - cost of 8 mile highway in 2019)

Inflation rate = 4%