Is the cost of pipeline installation reasonable?
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This post was last edited by Huajianren on 2011-4-2 at 10:47. Our company has hired a pipeline installation company to carry out the installation work, and there are many aspects of the budget for these installation costs that I don’t understand. I would appreciate it if you could provide some guidance. Thank you! The material loss rate is 5%; I’m not sure if this percentage is correct. Also, items such as valves, oil-gas separators, pressure gauges, and temperature gauges are all included in this category – are they all considered part of the material losses? Administrative expenses account for 12% of the material costs – what does this mean? It needs to be installed, there’s no need to manage it! Other exceptions include basic labor costs, painting costs, profit, shipping fees, taxes, and so on. It’s a bit confusing; I hope my brothers and sisters can give me some guidance. Thank you!
Take a look at the quota for your province – basically, all the costs you mentioned are already included in that quota
A 5% material loss rate is a bit high; our company keeps it at 3.5%, with no loss in the other categories.
Reply to 3#: Are valves, pressure gauges, temperature sensors, and so on all included in the material loss items? Are there any management fees required for the installation of pipes as an exception?
Of course, management costs are necessary; installation is a collective effort, so how can there be no management by the installing company itself? The contents included in the quota are comprehensive, and the vast majority of them are intended for the construction party. As for the materials, since you raised such a question, are they provided by the construction party?
It depends on your company’s management style: is the settlement based on a fixed quota (with detailed specifications), or is it a fixed price with no variations?