PRELIMINARIES

COST COMPONENT

Built up rate for Preliminaries divided into three categories:

1) INITIAL COST : associated with the expense to provide the items

that should be provided at the beginning of the contract period.
2) PROGRESSIVE COST : which are costs that occur continuously
or at certain times during the term of the contract.
3) FINAL COST : the cost to perform a task that occurs at the end of
the contract period.

There are various factors which affected the calculation of price for
Preliminaries items such as :

1) Contract Sum.
2) Size of project.
3) Complexity of project.
4) Location.
5) Site condition.
6) Construction period.
7) Etc

DQS281 MEASUREMENT OF CONSTRUCTION WORKS IV

COST ANALYSIS
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PRELIMINARIES

CONDITIONS OF CONTRACT

A. Document Contract
BIL ITEMS RM

1 Assumptions:
1 set of architects drawing = 20 sheets
1 set of engineers drawing = 70 sheets
Drawing price = RM6.50 / sheet

2 Document Contract (including binding) 1,500.00

3 Drawings

Architects drawing
= 20 sheets @ RM6.50 / sheet @ 2 sets 260.00

Engineers drawing
= 70 sheets @ RM6.50 / sheet @ 2 sets 910.00

4 Add 10% Overhead

Add 5% Profit

TOTAL COST

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COST ANALYSIS
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PRELIMINARIES

B. Statutory Obligations

Connection to main for services such as water reticulation,

sewerage system and etc, the fees stated in provisional sum.

Contract which exceed RM500,000.00, the contractor have to pay

0.125% levy to CIDB. If not, the penalty will apply not more than
RM50, 000.00.

http://cidbportal.aist.com.my/?q=ms/content/services-levy-payment

http://www.cidb.gov.my/v6/?q=en/faq/10

CIDB Levy
BIL ITEMS RM

1 Assumptions:
Contract Sum = RM100,000,000.00

2 Levy
= RM100,000,000.00 @ 0.125% 125,000.00

3 Add 10% Overhead

Add 5% Profit

TOTAL COST

DQS281 MEASUREMENT OF CONSTRUCTION WORKS IV

COST ANALYSIS
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PRELIMINARIES

C. Survey and setting out

BIL ITEMS RM

1 Professional fees for land surveyor

Initial loats the boundary 5,000.00
Gridline survey 15,000.00

2 Survey equipment
Theodolite 10,000.00
Dumpy level 3,000.00

LESS 40% credit value 5,200.00

3 Building in progress (professional fees) 15,000.00

4 Completion of project (professional fees) 5,000.00

5 Add 10% Overhead

Add 5% Profit

TOTAL COST

DQS281 MEASUREMENT OF CONSTRUCTION WORKS IV

COST ANALYSIS
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PRELIMINARIES

D. Insurance of Public Liability

Contractor is liable towards accident and death of public and any

damages of work while doing construction on site because the
negligence from contractor or sub-contractor.
Coverage for insurance of public liability based on risk factors such
as the causes of risk, safety on site, public access, site condition,
type of works and plant used.

BIL ITEMS RM

1 Assumption:
Rate = RM2,000.00/year for each RM100,000.00
limitation of liability (including 25% of insurance
agents' commissions)
Limitation of liability = RM500,000.00
Construction Period = 2 years

2 Premium
RM10,000.00 @ 2 years 20,000.00
6% goods and service tax 600.00
Duty stamp 10.00
20,610.00

3 Add 10% Overhead

Add 5% Profit

TOTAL COST

DQS281 MEASUREMENT OF CONSTRUCTION WORKS IV

COST ANALYSIS
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PRELIMINARIES

E. Workmen Compensation

Cover compensation for the workers which salary exceeds

RM2000.00/month.
However, this item not inserted in the Preliminaries because the
change of standard form of contract PWD 203A.
Contractors can price this item under Overhead.

BIL ITEMS RM

1 Assumption:
Rate = 2% (1-3% depends on type of work)
Estimate total workers salary (exceed
RM2,000.00/month) = 10-25% of contract sum.

2 Premium
3% (RM10,000,000.00 x 10%) 30,000.00
6% goods and service tax 600.00
Duty stamp 10.00
30,610.00
3 Add 10% Overhead
Add 5% Profit

TOTAL COST

DQS281 MEASUREMENT OF CONSTRUCTION WORKS IV

COST ANALYSIS
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PRELIMINARIES

F. Employees Social Security Act 1969

Cover compensation for the workers which salary NOT exceeds

RM2000.00/month.
The contractors need to be registered under PERKESO
(Pertubuhan Keselamatan Sosial) and paid the monthly
contributions.
There are two (2) types of Social Security Protection Scheme
which are :
o Employment Injury Scheme & Invalidity Scheme
Contribution = Workers (0.50%) and Employer (1.75%)
o Employment Injury Scheme ONLY (for the worker which
exceed 55 years old and workers which not contribute to
both scheme before 50 years old).
Contribution = Employer (1.75%)

BIL ITEMS RM

1 Assumption:
Numbers of skilled workers = 30 people
Numbers of unskilled workers = 45 people
Average salary of skilled workers = RM80.00/day
Average salary of unskilled workers = RM45.00/day
Working days = 26 days/month
Employers contribution = 1.75%

2 Estimated monthly income

Skilled workers
= 30 people @ RM80.00/day @ 26 days/month 62,400.00
Unskilled workers
= 45 people @ RM45.00/day @ 26 days/month 52,650.00
115,050.00

3 Estimated income per 1 year

RM115,050.00 @ 24 months 2,761,200.00

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COST ANALYSIS
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PRELIMINARIES

4 Contribution of contractor per 1 year

= 1.75% @ 2,761,200.00 48,321.00

5 Add 10% Overhead

Add 5% Profit

TOTAL COST

Rate of contributions available at

http://www.perkeso.gov.my/en/social-security-protection/employer-employee-eligibilty/rate-
of-contributions.html

DQS281 MEASUREMENT OF CONSTRUCTION WORKS IV

COST ANALYSIS
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PRELIMINARIES

G. Foreign Workers Insurance

Foreign Worker Insurance Guarantee is a guarantee required by

Immigration Department under Regulation 21 of the Immigration
Regulations from Employers as a security deposit for the
employment of foreign workmen in various sectors.
In the event that any of the foreign workman (men) is/are to be
repatriated to their home country, this insurance serves as a
guarantee to the Director General of Immigration Department up to
the maximum aggregate sum of the guarantee value.
Sources : https://www.msig.com.my/business-insurance/products/foreign-worker-insurance-scheme/

BIL ITEMS RM

1 Assumption:
Number of foreign workers = 20 people
Construction period = 2 years

2 Premium (depends on the insurance institution)

RM72.00 @ 20 people @ 2 years 2,880.00
6% goods and service tax 172.80
Duty stamp 10.00
3,062.80
3 Add 10% Overhead
Add 5% Profit

TOTAL COST

DQS281 MEASUREMENT OF CONSTRUCTION WORKS IV

COST ANALYSIS
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PRELIMINARIES

H. Insurance of Works

Contractors have to insured the loss and damage on works

because of fir, lightning, explosion, etc. before start the works.
Premium will be calculated as per :
o Rate @ Amount Insured.
The rate will depends on :
o Type the use of the building
o Type of construction
o Class of city

BIL ITEMS RM

1 Assumption:
Rate = 0.25% (0.10-0.50% depends on 3 criteria
above)

2 Premium
0.25% @ RM10,000,000.00 25,000.00
6% goods and service tax 600.00
Duty stamp 10.00
25,610.00
3 Add 10% Overhead
Add 5% Profit

TOTAL COST

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COST ANALYSIS
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PRELIMINARIES

J. Contractors All Risks (CAR)

Contractors are permitted to take CAR in order to cover the

insurance for Public Liability and Works.
Premium will be calculated as per :
o Rate @ Amount Insured.
The rate will depends on the type of construction example :
o Residential = 0.20%
o Road = 0.30%
*depends on the insurance institution

BIL ITEMS RM

1 Assumption:
Professional fees = 10% of the contract sum
Rate = 0.20%

2 Amount Insured
Contract Sum 10,000,000.00
Cleaning debris 50,000.00
Professional fees 1,000,000.00
11,050,000.00
3 Premium
0.20% @ RM11,050,000.00 22,100.00
6% goods and service tax 1,326.00
Duty stamp 10.00
23,436.00
4 Add 10% Overhead
Add 5% Profit

TOTAL COST

DQS281 MEASUREMENT OF CONSTRUCTION WORKS IV

COST ANALYSIS
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