Engineering Management: 【Daily Question】10-11-16

There are mainly three aspects: 1. Review of the engineering volume； 2. Review of fee standards ； 3. Data verification.

This post was last edited by ms3210 on 2010-11-17 08:13: 1. Technical review 2. Business review 3. Comprehensive review

Reply to 1# ms3210: I am interested in learning about project management, hence I am replying

1. Technical review 2. Business review 3. Comprehensive review

Technical bid evaluation (technical proposal), commercial bid evaluation (commercial proposal)

First, a review of the rationality of the comprehensive unit price. 　　The comprehensive unit price includes labor costs, material costs, costs for the use of construction machinery, enterprise management fees, profit, and risk premiums. The level of labor man-day consumption is related to a company’s efforts to improve management, implement contracting systems, and motivate workers; however, it generally should not be lower than 85%–90% of the average social cost. The unit price for labor can be determined based on the wage rates in the construction industry, but the average daily wage must not be below the minimum daily wage standard set by the labor protection authorities ； The consumption of main materials is related to the management level of the construction site; it generally should not be lower than 98% of the average social cost. The consumption of auxiliary materials can be adjusted appropriately according to the actual construction conditions, either increased or decreased. Material prices are influenced by factors such as the origin of the products, brand, sourcing channels, quantity purchased, payment terms, season, and transportation conditions; they generally should not be lower than 85% of the market prices during the same period ； Taking into account the fact that maintenance costs are incurred only when construction machinery is idle, and that machinery subject to accelerated depreciation can still be used within a specified period, the cost of construction machinery should generally be no less than 70% of the average social cost. If the bidder uses leased machinery, a lease agreement must be provided. Enterprise management costs are related to the level of management within a company, but given that the costs associated with on-site management cannot be significantly reduced, these costs generally remain at least 70% of the average social cost. Profit margins and risk-related expenses vary greatly from one company to another; if a company operates with minimal profits or wishes to establish a long-term partnership with a particular client, it is acceptable for such a company to aim for zero profit. 　　Second, a review of the rationality of measure costs and other project-related expenses. 　　The costs related to civilized construction, safe construction, and temporary facilities within the measure fees shall not be lower than the statutory minimum standards, and no arbitrary discounts shall be applied. The quotes for the items in the measure costs that are related to the construction plan or construction organization design should be consistent with such plan or design. The reserve funds and the costs associated with the procurement of materials by the tenderer itself shall be quoted at the amounts specified in the tender documents. If the aforementioned fees are not calculated as required, they should be considered an unreasonable quote. 　　Third, a review of the rationality of fees and taxes. 　　Fees and taxes must be calculated strictly in accordance with the regulations; no discounts are allowed, otherwise it will be considered an unreasonable quote. 　　After evaluating the rationality of the above three aspects, a bid evaluation report with quantitative indicators is prepared, which serves as an important basis for determining the winning bidder. The bid evaluation report shall be submitted to the project owner and the construction administration department for record-keeping, serving as an important basis for post-bid supervision.

The evaluation of bids for lump-sum quotations can adopt the comprehensive evaluation method, the lowest evaluated bid method, or other evaluation methods permitted by laws and regulations. It should be noted that the use of the evaluated lowest bid price method means that among those bidders whose bids meet the substantive requirements specified in the tender documents, the bidder with the lowest bid price shall be selected, except for those whose bid price is lower than their cost of production

1. Determine the valid bid price. 2. Calculate the benchmark price for bid evaluation. 3. Calculate the quote score.

Reply 1# ms3210 Not sure

The evaluation of quotes includes three types of assessment: technical evaluation, commercial evaluation, and comprehensive evaluation. (1) Technical review: 1) The technical review of the quotation is carried out by the professionals in charge of the relevant fields, and is approved by the project design manager. 2) The basis for the technical evaluation is all the technical documentation related to the inquiry included in the purchase order, along with the vendor’s technical quotes; based on these, a decision is made regarding whether the vendor’s quotes are acceptable, unacceptable, or acceptable after partial modifications. 3) Conduct a horizontal comparison among various manufacturers on the basis of satisfactory evaluations, and determine a recommended order. (2) Business review: 1) The business review is carried out by the procurement engineer, with approval from the procurement manager. 2) No further commercial evaluation will be conducted for manufacturers that fail the technical evaluation. 3) The basis for the business evaluation is the inquiry business documents and the vendor’s commercial quotation; the focus is on assessing whether the vendor’s price structure is reasonable and competitive. 4) Delivery time, payment and payment terms, quality assurance, financial condition, reputation for contract fulfillment, etc. 5) Conduct a horizontal comparison of the commercial quotes from various manufacturers and rank them for recommendation. (3) Comprehensive evaluation: 1) The procurement manager conducts a comprehensive evaluation based on the technical evaluation and commercial evaluation. 2) The comprehensive evaluation takes into account both technical aspects and business factors, conducting a thorough assessment based on quality, schedule, cost, the supplier’s reputation in fulfilling contracts, performance with similar products, and transportation conditions, etc., to determine a ranking of recommendations, which are then approved by the project manager. 3) For important equipment with high prices and long production cycles, or materials in large quantities, approval from the company’s management is also required (if stipulated by the company). 4) If the quote exceeds the approved budget, approval procedures must be carried out step by step, starting with the cost control engineer. 5) Final control is carried out in accordance with the approved revised budget.