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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