A heavy civil infrastructure contractor decides to bid for a site formation project. The contractor estimates that the a

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A Heavy Civil Infrastructure Contractor Decides To Bid For A Site Formation Project The Contractor Estimates That The A 1 (108.64 KiB) Viewed 15 times

A heavy civil infrastructure contractor decides to bid for a site formation project. The contractor estimates that the amount of soil to be moved is about 8,000 m (bank volume, with a percent swell factor of 20%). The type and number of main construction plants to be used on this project include: 1. Bulldozer: 1 piece will be used. 2. Excavator: 2 pieces will be used. 3. Water truck: 1 piece will be used. 4. Truck: 6 pieces will be used. When estimating the project costs, the contractor has made the following assumptions: 1. The project duration will be determined by the outputs of the trucks. Each truck has a capacity of 10 m (loose volume). It takes 60 minutes for a truck to complete an entire production cycle (loading, transporting, returning, etc.). Assume that the working hours is 8 hours per day. 2. The usage costs of the plants will be based on the ownership costs of the plants. The assumptions are made in the following table. 8 6 Plant Purchase price Salvage value Usage life Plant usage costs (years) Bulldozer 4,000,000 40,000 2.5 times of the straight- line depreciation amount Excavator 3,000,000 30,000 2.5 times of the straight- line depreciation amount Water truck Because it is not heavily used, the contractor estimates that its daily usage cost is 3,500 dollars/day. Truck 2,000,000 20,000 5 2.5 times of the straight- line depreciation amount 3. The material costs are negligible. 4. A total of 6 workers are needed, except for the plant operators (The costs of plant operators
are already included in the plant costs.). The labour costs are based on workers' daily rate (1700 dollar/day for each worker) and the total duration of the project. 5. The indirect costs, insurance, and contingency are estimated to be 30% of the total project direct costs. Based on the information above, you are asked to answer the following questions: (a) How long does it take to complete the project (round up to the nearest integer in days) (7 marks)? (b) Calculate the daily straight-line depreciation amounts for each bulldozer, each excavator, and each truck (assume that there are 365 days per year) (6 marks). (c) Estimate the total direct costs of the project (6 marks). (d) Estimate the total project cost (2 marks). (e) Assume that a contract price fluctuation clause is used for this project. Because the main factor that affects the project cost is fuel (diesel) price, the contract states that project price adjustment will be based on diesel price index alone. Only 40% of the project direct costs are adjustable, and the price adjustment is based on diesel price index at the time of signing the contract and at the time of project completion. Based on published diesel price index data, the following numbers are obtained: (1) Diesel price index at time of signing the contract: 287 (2) Diesel price index at time of completing the project: 267 You are asked to calculate the amount of price adjustment for this project (4 marks).