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VIEWING PRICING STRUCTURE <br />During the development of the GMP, Kokosing develops a "bid book", structured according to the <br />order of the specifications. The estimate will show all bare costs (labor, materials, equipment, vendor <br />quotes) as well as the provider fee (overhead and profit). When we competitively bid subcontracted <br />work, all received bids will be processed and can be submitted to The City of South Bend for a selection. <br />Under the GSC rules, the owner has the flexibility to select the best response, not necessarily the <br />lowest. Once the vendor is selected, the bid is incorporated into the bid book. <br />Once the GMP is set, the cost elements are tracked using our ViewPoint Software. ViewPoint has <br />many different reports available to the project team such as job cost detail and job cost analysis. <br />In the early phases, we will work with you to determine the level of detail and format that you prefer. <br />VIEWING SAVINGS <br />Value engineering and constructability savings identified after the contract is executed will move <br />an agreed cost from the work budget to a separate line item, often a contingency. Where work is <br />eliminated, the savings are generally immediately available for reallocation. <br />Savings from performing better than the project estimate remains in the project budget until a level <br />of mutual comfort is achieved that the savings are real. The GMP contract is on the overall value <br />of the work, not the individual line items. Consequently, we retain control of our budget until we are <br />confident the balance will meet or do better than performance goals. <br />Monthly reports will show the balance of the released savings, as funds flow into and out of work <br />line items. Released savings can be used to add scope during the project. Internal documentation <br />denotes the scope, schedule and cost of the new work without the need for external change orders. <br />If the new work extends the duration of the project beyond the contract date, a change order may be <br />required. At final completion, a change order is issued that returns all remaining funds to The City of <br />South Bend. <br />The use of contingency and tracking of post-GMP cost reductions can be tracked in our cost/ <br />expenditure logs. With the final agreement on the potential changes, including cost/value and written <br />authorization, the items are then acted upon accordingly, moving funding to or out of the different <br />funding lines. <br />VIEWING CONTINGENCY <br />Construction contingency line items are created within the estimate/GMP as a management tool. <br />Contingency is not built into individual work/cost items but reflects the risk across all areas of work. <br />Some owners find it advantageous to create additional contingency pools or allowances to address <br />either specific areas of risk, such as dewatering an excavation, or work areas not well defined at the <br />GMP. Depending on the intended use, contingencies or allowances can be owner controlled, requiring <br />a more formal process utilizing the funds to perform work. <br />Kokosing utilizes a simple log to identify, assign and track the use of contingency, as shown in the <br />example in Table 6-2. The contingency log is part of every monthly report with the use of contingency <br />discussed and agreed to at monthly meetings. Once the use of contingency is final, it is incorporated <br />into Viewpoint and reflected in the project reports. <br />SOUTH BEND, INDIANA GSC 48 <br />