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Escalation - Part 2

The second part to "Escalation" is being posted a little over 2 years after the first post, so in case you'd want to refresh on part one, please find appended the link: Escalation - Part 1 The second method is based on PAN India details, basically the RBI's Wholesale Price Indices. Firstly, RBI stands for Reserve Bank of India, the RBI as part of inflation control and monitoring has set up an index, called the Wholesale Price Index (WPI), which provides a means to monitor an increase/decrease in commodity prices. It is a very exhaustive list and covers all most all commodities in circulation within India and some export commodities as well. The WPI essentially tracks the commodities with respect to a clear baseline. This baseline is always indicated at the top of the monthly bulletin/circular, which is published on the RBI website, appended is a link to one such bulletin: https://www.rbi.org.in It would also be nice to note that by using this method of calculation bot...
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RIBA WORK STAGES 2020

Right, so this is an 'on the go' post, since RIBA is becoming popular in 'hear and say' in India too, a few questions have been asked to me about the work stages that the RIBA Plan of Works 2020 has, to start here are a couple of links to the documents that you can use to check the original RIBA Plan of Works: Note: These are helpful, so please take your time to go through them, since this article/post is my interpretation on the RIBA. 1)  RIBA 2020 - Overview 2)  RIBA 2020 - Chart As such if you feel, you are not following a particular workflow process then you are in all probability using a combination of the APM (Association of Project Management) workflow and the AIA (American Institute of Architects) workflow with the inclusion of a Schematic Design Phase and a Tender Stage. Let's make it clear that there is no hard and fast rule, these workflow schemes just help with standardization and depending on the uniqueness of the projects the workflows will be altered ...

Reconciliation of Materials in a Construction Contract

Reconciliation is a very tricky topic to deal with. Most people will tell you that reconciliation is essential for a "free issue" or "client issue" contract. In my opinion reconciliation is very important for all types of construction contracts. The reason for my opinion is that I have had the good fortune to work with multiple types of contracts in the course of my career and invariably I find that it becomes essential to know what has/is going into your building and an effective method for a QS is by doing the material reconciliation, this certainly does not disregard the roles of the PM & the QA/QC Engineers, it is but a means of cross checking, as the close out figures will have actual consumption coefficients' that can be utilized to ascertain the connection with the initial design coefficients'. Also, reconciliation will always keep a check on the contractor and the wastage components. Coming to the process of material reconciliation: - Id...

A brief understanding of “Contracts” for Construction

This post is an attempt to the introduction to what the essence of a contract is for the construction industry. It need not be a sacrosanct post, however it will provide you with the essentials that could help you understand the concept. What is a contract? A voluntary, deliberate, and legally binding agreement between two or more competent parties is a CONTRACT.  The highlighted terms in the above sentence are very essential in terms of the legality of the contract and the most important term by far is the word "competent", this is because if a party in the contract can prove that he is say an illiterate and was not in a position of understanding the terms and conditions for what he signed off then the Contract Document will be considered as void, thereby making the contract not legally binding.  It is also essential to have 1) an offer and 2) an acceptance , for the legal acceptance of the contract, hence if an offer and an acceptance are established as implied...

Escalation - Part 1

There are numerous definitions to the term Escalation, I would keep it simple and call it the change in the price of goods/services over a period. Here the period would generally refer to the period of the contract. How do you measure or ascertain Escalation? As for every process there are many ways of ascertaining escalation, here however I would be mentioning two methodologies (separate posts) which are common to the Indian market depending on the terms and conditions of the contract. The first method is when basic prices of material, fuel and/or labour are clearly indicated in the contract document. This is the simplest of the two mentioned here. And the calculation is direct and simple. What we do here is basically take the difference between the basic prices mentioned in the contract and the average monthly price of the element in consideration. The average monthly price needs to be a weighted average and not the direct average. This would also have to be mutually...

Suggestions please and a quick pointer on Quantity Take off

The past week has been very busy out here, since I wanted to cover the topic of Budgeting/Cost Planning at one go.. I hope I have achieved that. I do look forward to your suggestions and inputs on what I need to extensively focus on.. My next post would be scheduled for next week, since it would be on Escalation and I need sometime to structure the post with a few worksheets to share with you. Well, for the quick pointer on Quantity Take Off (QTO): I have found that it makes ones job easy if a detailed area statement is prepared before the start of the QTO. The following are a few advantages of it: While compiling the area statement, the QS will be going through the entire drawings set, this ensures that the scope defined in the drawings is glanced at. The area statement will always serve as a check point for most of your quantities, A detailed area statement should ideally capture the area and the perimeter of each floor along with the openings in the slab, the area of the...

Stages of Budget/Cost Plan

I should have probably done this before I started with my post on Budget/Cost Plan, however I decided to keep this to the end since this is subjective, because the stages of budget are probably relevant to a large extent to the Developer of a project and the Consultant of the project. To a contractor, there would be a different work flow. So what I would do here is try to explain my understanding of the various stages of the budget and then maybe explain who the stages would serve a relevance to. The following would be IDEAL stages of budgeting:            Concept Stage : as the name conveys, concept i.e. an idea, a budget that could be given to the client when the project is still a concept or an idea. This would be a very basic budget with the least accuracy. It would work on the basis of just the land area and the use of the land. Most of the numbers that would reflect in this stage would be on the basis of bench-marking (please refer to m...