Exercise 1 — Billing Rates

SCENARIO: You are an estimator working for Hexco Civil, and your company has started work on the excavation and grading portion of a project for Health Choice hospital campus.

During this phase, the crew runs into underground storage tanks that have contaminated the soil.

Robert, the Health Choice engineer, requests “rather than detail out an estimate, we’ll just do a time and materials agreement for this portion.”

You agree on a 20% markup on your going rates for labor and equipment.

In the Training Job:

1. Make a copy of the Training Job.

2. In the new job, apply billing rates to the resources employed on the subordinates of the “Removal of Underground Storage Tanks” and “Disposal of Contaminated Soil” cost items.

3. In the PBS, select the Charge Rate and Billing rate Saved View to compare your rates.

4. In Job Properties > Pricing, change the setting to Calculate Balanced Pay Item Prices using Billing Amount.

5. In the Pay Item & Proposal Register, note that your Target Price is now based on billing rates.

6. Decide if you want to spread any addition overhead or profit to your “Removal of Underground Storage Tanks” and “Disposal of Contaminated Soil” pay items (or just leave them with their current billing rates.

Congratulations, you have completed this exercise!