Question: Your construction management firm is preparing a proposal for a new medical office building for a local health care provider under a negotiated project delivery
Your construction management firm is preparing a proposal for a new medical office building for a local health care provider under a negotiated project delivery model. While the complete project documents have not been developed, your company was able to estimate total trade costs based upon the space program provided by the design team and historical cost data available. They are as follows:
| Scope | Trade Cost |
| Site Work | $ 150,000 |
| Concrete | $ 200,000 |
| Masonry | $ 150,000 |
| Steel | $ 200,000 |
| Carpentry | $ 125,000 |
| Roofing | $ 85,000 |
| Doors and Glass | $ 160,000 |
| Finishes | $ 225,000 |
| Specialties | $ 95,000 |
| Fire Protection | $ 110,000 |
| Plumbing | $ 170,000 |
| Mechanical | $ 290,000 |
| Electrical | $ 250,000 |
The owner is expecting the markup structure for the project to be based on the following sliding fee scale:
| Project Trades Costs | General Conditions | Liability Insurance | OH&P |
| Up to $500,000 | 15% | 0.5% | 15% |
| $500,001-$2,000,000 | 10% | 0.5% | 10% |
| $2,000,001-$5,000,000 | 5% | 0.5% | 5% |
Given the information provided above, what should the TOTAL markup percentage be on the trade costs and what should the TOTAL proposed price be for the project?
- A. 20.5%, $2,663,050
- B. 30.5%, $2,884,050
- C. 30%, $2,225,050
- D. 10.5%, $2,442,050
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