Once you have a schedule and have identified your methods, you are ready to
estimate the bid amount. Your bid should cover the direct costs of the job,
operating expenses of the company, contingency allowances, and profit. The BIG
Bid Estimate Form can be used plan your bid (see link below). List all of the methods that
will be used and fill in the labor and material costs associated with those methods to get your total direct job cost.
The other costs that must be considered are:
- Field Overhead - In addition to direct job costs, there will be job overhead expenses for the
work done on jobs. This overhead will come in two parts: a fixed amount that
is charged every workday, and a percentage of the direct cost of the job that
is charged every period that any work is done on the job. The fixed amount per workday
$(Fixed Field Overhead)*
. The per period amount is equal to
(Variable Field Overhead)*
% of the direct cost of the job.
- Office Overhead - Every period you will incur G&A overhead costs regardless
of how many jobs you have. These costs amount to a minimum of
(a set amount of money)*
If you want your company to earn profit you will need to earn enough from jobs to
not only recover the job costs but also to pay for your general cost of doing business. You will
want to assign some of this cost to each job you acquire.
- Loan Interest Expense - If you are currently making (or will soon be making) loan
payments you will need to cover the interest expense for those loans. The current APR
- Contingency Allowance - The actual cost of a job may be more than your estimated cost.
To account for this you may wish to add some extra amount to your bid to cover
increased labor or material costs so they do not eat into your expected profit.
The downside to this is that an overly cautious bid might be more than your competitors'
bids, and you will not get the job.
- Overtime Labor Cost - This is another type of contingency allowance.
If you expect you will need to use overtime to complete this job you will
wish to cover that expense in the bid amount. For overtime work, labor cost per CU and subcontractor
cost per CU are increased by a factor of
- Liquidated damages - Another contingency allowance. You may wish to add a
few days worth of liquidated damages cost to your bid in case you go past the
job's required completion date.
- Consulting Costs - If you choose to buy consulting reports you will need
enough income to cover their costs.
- Bidding Expense - Enough to cover your bidding expense for this
bid and possibly others if you don't get those jobs. In this game the bidding expense will be
of the bid subtotal. The bid subtotal is everything that goes into the bid except for the bidding expense itself.
- Profit - However much you think you can get.
If BIG's Estimator created your estimate schedule, the cost estimate only includes the direct costs
to perform the methods and the field overhead. It is your job to add on a portion of office costs, add a contingency
allowance (if any), and determine the amount of profit to be included.
* If you view this manual using the link from the main menu of your company page you
will be able to see the precise value for this variable for your game.
Below are links to examples of completed Bid Estimate Forms. The numbers for bidding
expense, overhead and interest rate are examples only and may be different for your game.
Your instructor will provide you with the correct numbers to use in these calculations.
Your instructor may give you more information on how to bid and may provide you with
an alternative tool to estimate bid amounts. In that case you should always use your
instructor's tool rather then this Bid Estimate Form.
Click here to see the Bid Estimate Form for Building Jobs.
Some games are configured for Heavy Construction and utilize Unit Price Bidding to determine bid winners. In those cases
you will use a different Bid Estimate Form.
Click here to see the Bid Estimate Form for Heavy Jobs.