In the Cost Breakdown Structure, we generated the direct and indirect costs, and in the Price Breakdown Structure, we added profit to come up with a target price for the bid. But we still need to decide how to spread the target price over the pay items to obtain the final pricing of the bid. To obtain the final pricing of your bid, let's review the Pay Item and Proposal Register. The Proposal Recap contains the target price you defined in the PBS and compares it to the current price of your pay items.
You can price out your pay items either by entering the unit price, the total price, or percent margin manually, or by using auto price from the Auto Price section of the Actions tab. Select the Mobilization pay item, and at the top right of your register, you have an Item Recap that tells you what the direct cost, overhead and profit would be for the Mobilization pay item, if it was balanced. Let's enter our current pricing manually. Click in the Total Price Current field for Mobilization and enter a total price.
Then press Tab. Note that your current unit price now reflects the change, and note that the Item Recap now compares your price breakdown for the item, if it was balanced to the pricing you entered. On the Clearing and Grubbing pay item, enter a percentage in the Percent Margin column, select the Unclassified Excavation pay item and in the Unit Price (Current) field, type a unit price. Then select the Concrete Hot Mix pay item, and type a percentage in the Percent Margin field.
On the Proposal Recap, note that you would need to continue adding pricing to your pay items for your current bid price to meet your target price. Perhaps you want to get a headstart and have InEight Estimate spread your target price proportionately over your pay items for you. On the Actions tab in the Auto Price section, ensure that Overwrite Locked Pay Items is unchecked, and then select Balanced Bid > Hit Target Total. Note that your current price now equals your target price and you have zero variance.
Also, note that your bid includes over-running and under-running cost items. The Unbalanced Bid auto price feature can automatically distribute profit to account for your over- and under-run items, by taking the profit from your under-run items and putting it on to your over-run items. Note that on your under-runing items recap, only the direct cost was distributed to this item. Its overhead and profit was redistributed to your over-running items.
Should your measurements be correct, you'll earn the additional profit on your over-running quantities since it's a unit price contract and you're paid by the unit. As you finalize your unit prices, you can lock your pay items. Often as the bid is being finalized, you'll continue adjusting certain pay items, and making additions in your bid. Should this generate additional cost or profit to spread, you can once again use the Auto Price feature to balance your bid, but it won't spread to your locked pay items unless you select the Overwrite Locked Pay Items option.
Like suspending cost items in the CBS Register, you can suspend pay items in the Pay Item and Proposal Register. Suspending a pay item causes it to no longer contribute quantities in pricing to the estimate. This is helpful when considering alternate items on your bid. If your client decided to not require a pay item, you can suspend it.
Right-click on the appropriate pay item, and then select Toggle Suspended, or you can utilize the Actions tab > Toggle Suspended feature.
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