Pricing is rightfully considered the most important area of economic activity at the enterprise. The adequacy of the established prices determines the volume of products sold, the profitability of the production and the financial result of the activity. And as a natural result - the competitiveness of the enterprise.
Introductory information
The technical and economic indicators of the production project (work / services / construction / investment, etc.) reflect such pricing factors as cost dynamics, inflation, market monopolization, labor productivity indicators, demand and supply ratios, as well as a number of others. In order not to beat around the bush, a specific option will be chosen, on the example of which a discussion of this topic will be carried out. This is construction.
What do we have?
Pricing in construction is characterized by individuality. So, the prices of certain types of products are determined on the basis of estimates. At the same time, climatic factors, regional differences, differing economic conditions, and particular types of nomenclature are taken into account. The adopted norms, methods and working conditions have an additional influence. Technical and economic indicators of the construction project are evaluated by the customer and the contractor at the time of conclusion of the contract and its subsequent execution. What does this process look like? First, the customer develops indicative documents. They are necessary in order to conduct a preliminary assessment of the cost of building an object at various stages. It is used to justify the offer at a contractual price by the contractor calculating the value for construction products.
Influence factors
The calculation of the technical and economic indicators of the project should include all the important points. Indeed, on their basis, economic settlement, reporting, and performance evaluations will be carried out. The structure of the document should include the allocation of cost groups indicating the value of their specific gravity. To assess the value using the current index system. Overhead costs, direct costs and profits should be considered. It is also necessary to ensure the achievement of the required parameters. Without them, developing adequate estimates for the construction will not work.
Direct costs
These include the remuneration of workers, the cost of materials, structures and parts, the operating costs of the used construction machines and mechanisms. It is from them that the main item of expenses is formed during the implementation of construction and installation works. Workers' salaries include wages and the provision of support services to support activities.
The next item to be mentioned is materials. By their value they understand the costs of their acquisition, procurement, delivery, unloading and storage. The same applies to parts, semi-finished products, products and structures that are necessary for the implementation of construction and installation works. Their price is the basis of selling price, transportation costs, margins of supply and marketing structures and procurement and storage costs.
And the third component is the cost of operating equipment and construction machines. In this case, there is a specificity. Thus, costs are determined using a unit such as machine hours. This indicator is usually calculated by calculation. What is included in the machine hour? Delivery of the object to the construction site, movement between them, depreciation charges, installation or dismantling, salaries of specialized and maintenance personnel, repairs, energy costs, fuels and lubricants, and a number of other articles. So the first technical and economic indicators of the project are considered.
Overhead
They are provided in order to cover the costs associated with the organization and management of the process of construction of the facility, providing the necessary conditions, maintenance of construction and installation activities. Overhead costs are part of the cost. Conventionally, they can be divided into four components:
- Administrative expenses. This includes the remuneration of engineers and junior staff, clerical, postal and telephone and travel expenses. They also include deductions for social needs, payment of audit and consulting services and all other expenses associated with the conduct of administrative activities.
- Costs for servicing workers directly involved in construction, retraining of personnel, safety and labor protection, ensuring domestic and sanitary conditions, medical and social insurance.
- The costs of preparing and organizing work carried out at construction sites, which include the costs of maintaining guard and fire brigades, maintaining laboratories, developing projects, improving the site and maintaining it in good condition.
- Other overhead expenses, which include property insurance, advertising, bank loan payments and the like.
(Estimated) profit
By this we mean the deductions of funds that will be used to materially stimulate and develop the enterprise. This group of technical and economic indicators of the project is determined as a percentage. It includes equipment modernization, expenses for paying income tax, providing material assistance, developing the social sphere, stimulating workers, partially replenishing working capital, and reconstructing fixed assets.
Specific Indicators of Estimated Profit
The pricing system includes:
- Estimated rationing. This implies a system of technical, economic and organizational methods for determining the necessary temporary, labor and material resources for the implementation of certain construction and installation works.
- Estimated rate. This is a set of working hours of machines and mechanisms, labor of workers, materials, structures and products that are needed for a certain amount of construction and installation work.
- Estimated standard. This is a collection containing the requirements for the implementation of construction works. This is the primary document for developing unit rates.
So the main technical and economic indicators of the project are considered.
Paper preparation
Technical and economic indicators of the project plan for the future construction are contained in the business plan and estimate documentation. It is by the numbers available in them that determine economic efficiency, expected income and expenses, various opportunities and specific aspects, the analyzed return on investment and net profit. The main points that should be considered in the documentation:
- The procedure for the development of approvals, approval of justifications for investments, composition and assessment of their effectiveness; stages of design preparation for the construction of structures.
- The procedure for the creation, development, approval and subsequent approval of project documentation, its composition and content, specific technical and economic indicators, tariff regulation.
- The composition of the rules.
Species variety of documentation
Depending on what technical and economic indicators of the investment project are considered, the following may be distinguished:
- Local estimates. These are primary documents. Compiled for certain types of work and consider the costs of general site work or buildings.
- Local estimate calculation. This document is drawn up in cases where the amount of costs and the amount of work are not fully defined and they need to be clarified on the basis of working documentation.
- Object estimates. Combine the cost of work at the facility. Compiled on the basis of local estimates. Refers to the number of documents on the basis of which they form contract prices.
- Estimated calculations compiled for certain types of costs. Their creation is envisaged in those cases when it is necessary to determine as a whole throughout the construction the maximum funds that are needed in order to reimburse expenses that have not been taken into account by the standards.
- Consolidated estimates. Summarizes the reviewed documents.
How to calculate all this?
In this matter, a number of methods provide substantial assistance. Each of them has its own specifics, which allows us to evaluate the technical and economic indicators of project efficiency and see if it is possible to improve something somewhere.
- Resource method. It allows you to very accurately determine the estimated cost of the necessary construction products for any period of time. Thanks to this method, you can even take into account the additional costs that will be needed during the construction of the object. It can be used at any stage of the preparation of design estimates. But there is also a drawback - a very laborious and voluminous construction documentation.
- Resource Index Method. Actively uses monthly data from pricing centers in construction.
- Base index method. It involves the use of a system of forecast and current indicators in relation to cost in the initial period of time. Its use allows you to limit costs at the level of average regional spending.
- The analogue method. It is used exclusively if there is a data bank in which there is information about previously constructed (designed) objects that are similar to the current one.
