Consider a construction project for which the contractor's estimate is $3,000,000. For various types of contracts, R = 10%, R1 = 3%, R2 = 1.5%, R3 = 6% and N = 0.6. The contractor is not compensated for change orders under the guaranteed maximum cost contract if the total cost for the change order is within 5% ($150,000) of the original estimate. Determine the contractor's gross profit for each of the seven types of construction contracts for each of the following conditions of U and C:
1. U = 0,
2. U = 0,
3. U = 5% E = $150,000,
4. U = 5% E = $150,000,
5. U = 2% E = $60,000,
6. U = 2% E = $60,000,
C = 0
C = 4% E = $120,000

C = 0

C = 4% E = 120,000
C = 0

C = 4% E = 120,000

Suppose that in Problem 4, the terms of the cost plus variable percentage contract allow an incentive bonus for early completion and a penalty for late completion of the project. Let D be the number of days early, with negative value denoting D days late. The bonus per days early or the penalty per day late will be T dollars. The agreed formula for owner's payment is: P = R(2E - A + C) + A + C + DT(1 + 0.2C/E) The value of T is set at $ 10,000 per day, and the project is completed 20 days ahead schedule. If all other conditions remain unchanged, find the contractor's profit and the owner's actual payment under this contract for the given conditions of U and C.

Answer rating: 100% (QA)

1 Solution E 3000000 R10 R13 R215 R36 N06 The contrac... View the full answer