1)What is “best and final offer (BAFO)” and when is it required?

contractors track actual expenditures against estimates, which is important for controlling
BAFO (Best and Final Offer) is a proposal that the client asks for during the last stage of project costs.
tender talks. By this time, contractors have already given their first offers. The client checks 10) What is the final delivery (handover) in construction projects and
these offers and asks questions about price, technical needs, and other details. After this, how is it carried out?
contractors are asked to send their best price and terms again. This helps the client choose Final delivery in construction happens after the guarantee period, which is usually 1-2 years.
the contractor who offers the best balance between price and quality. BAFO makes sure During this time, all problems from the initial handover are fixed. After all work is complete, the
contractors give their best and clearest offers, so the client can make a fair and smart final client officially accepts the project, and the contractor is free from responsibilities. Retention
decision. money is returned after the guarantee period to cover hidden defects.
2)What is the final payment and under what conditions is it paid? 11) What information is required in order to determine the unit price of
The Final Payment (FPC) is issued once the project is fully completed and all contractual
obligations have been fulfilled. After the project’s physical completion,
the work?
1) an initial handover (snagging) process identifies defects or incomplete works, and once they To determine the unit price of the work, you need the following information:
are resolved, 95% of the contract amount may be paid; however, the contractor’s obligations *Cost of Materials: The price of all materials needed for the work.
remain throughout the defect liability period (usually 1–2 years). *Labor Costs: The cost of labor, including wages and other expenses for the workers.
2)the commissioning period, systems are tested to ensure they meet performance standards, *Equipment Costs: The cost of any equipment needed to do the work.
and after all defects are addressed by the end of the defect liability period, *Overhead Costs: Additional costs like transportation, permits, and other expenses related to
3)the final handover is conducted, with the client signing a final acceptance certificate that the work.
releases the contractor from contractual obligations (except those related to government *Profit Margin: The amount of profit the contractor wants to make from the work.
requirements). By adding these costs together, you can calculate the unit price of the work.
4) retention money—deducted during interim payments—is released after this period 12) While quantifying RC structures, which information is required?
(commonly 12–24 months), provided no additional defects arise. Consequently, the final Quantification of Reinforced Concrete (RC) structures requires precise and detailed
payment covers the remaining contract amount once all terms and conditions are satisfied. information, including:
3)What deductions (retention) are available during payments in 1.Project Drawings:
Structural drawings specifying dimensions, layout, and reinforcement details.
construction projects and when they are paid back? *Example: Beam and column dimensions, reinforcement placement, and spacing.
Retention Money: Retention money is a part of the payment that is kept by the client to 2.Material Specifications:
ensure the contractor fixes any defects. Usually, 10% is deducted from each interim payment. Concrete grade (e.g., M20, M25) and reinforcement type (e.g., TMT steel).
This money is held until the defect liability period (DLP) ends, which is typically 12–24 months 3.Quantities:
after the project is finished. During the DLP, the contractor must fix any defects or incomplete Volume of concrete for each element (e.g., cubic meters for slabs or columns).
work at their own cost. If the contractor does not fix the problems on time, the client can use Weight of steel reinforcement (calculated in kilograms or tons).
the retained money to make the repairs. Retention money helps protect the project’s quality 4.Formwork Details:
and ensures the client has financial security. After the DLP ends and all defects are fixed, the Surface area of formwork needed for casting concrete.
contractor gets the retained money back. *Example: Square meters for shuttering panels.
4)What is the advance payment and under what conditions is it paid? 5.Construction Standards:
Advance Payment (APC): Advance payment is money paid to the contractor before the project Adherence to relevant codes and standards (e.g., ACI, Eurocode).
starts. This helps the contractor to prepare, buy materials, and set up the site. It is usually 10% 13)What is the BOQ and how is it prepared?
to 30% of the contract value (sometimes up to 50%). Two main rules apply: 1. Bank The Bill of Quantities (BoQ) is a detailed document that lists all the materials, labor, and
Guarantee: The contractor must give a bank guarantee equal to or more than the advance tasks needed for a construction project. It is prepared by measuring the quantities of each task
payment. This ensures the client can get the money back if the contractor does not complete and matching them with unit prices. BoQ helps to calculate costs accurately and track
the work. 2. Recovery Mechanism: The advance payment is taken back step by step from later expenses in the project. For example, tasks like concrete pouring (measured in cubic meters),
payments, as written in the contract. The contractor must use this money only for the project. wall construction (measured in square meters), steel structures (measured in tons or
5) How to choose the most suitable offer during the tender? kilograms), roofing, plastering, and mechanical, electrical, and plumbing (MEP) works are
1. Price: The price should fit the project budget and be a good value for money. 2. Technical included in the BoQ.
skills: The contractor’s experience and ability to do the work well are important. 3. Past work 14)What is “interim payment” and how is it paid?
and references: The client looks at the contractor’s past projects and feedback from other Interim payment is a regular payment made to the contractor based on the progress of the
clients. 4. Balance between price and quality: The chosen contractor should give both good work. This payment is for the tasks completed during the project.
quality and a fair price. Example: In a housing project, Contractor A has the lowest price but *Measurement and Valuation: The progress of the work is usually checked every month or as
little experience, Contractor B is more expensive but experienced, and Contractor C offers a stated in the contract. The completed work is measured, and the payment is calculated based
fair price and good reviews. The client might choose Contractor B because they have good on unit rates or total amounts.
experience and quality. *Certification: The project manager, engineer, or client’s representative reviews and approves
6) What type of payments are available in Construction projects? the payment. They ensure the work is done with good quality and on time. First, handover acts
In construction, it is the total money needed for all steps of a project, like planning, designing, are prepared, and then the Interim Payment Certificate (IPC) is issued. These handover acts
building, and finishing. Keeping costs under control is very important to stay within the budget. do not include the cost and do not mean the work is fully accepted by the client.
Costs in construction are divided into three main groups: *Deductions: A portion of the payment, usually 10%, is withheld as retention money to cover
Measured Works are direct costs for specific jobs. These include materials and workers any future defects. Additionally, part of the advance payment is deducted from each interim
needed for tasks like pouring concrete, building walls, or installing systems like electricity and payment.
plumbing. These are listed in a document called the Bill of Quantities (BoQ), where the amount 15)What does preliminary and overhead costs mean in Construction
and price of each job are written.
Preliminary Costs are for setting up and running the construction site. Examples are building
projects?
fences, providing water and electricity, and paying site managers. These costs make sure the *Preliminary Costs in construction are the costs needed to set up and manage the construction
project runs smoothly. site before and during the project. These include things like setting up fences, providing water
Overhead Costs are indirect costs like salaries of office workers, office rent, and company and electricity, safety measures, environmental controls, management salaries, and getting
insurance. These are shared across different projects and help the company work properly. permits. These costs are usually fixed amounts and help the project run smoothly.
*Overhead Costs are the general costs of running the construction company and helping
7) What are the differences between initial and final delivery different projects. These include office staff salaries, office rent, electricity, insurance,
(handover) in construction projects? equipment repairs, and training. These costs are shared between projects or added to the
In construction projects, there are clear differences between initial and final delivery. Initial contractor’s profit to keep the company working.
delivery happens when the contractor finishes the project and gives it to the client for the first 16) What is the snag list and how is it related to the project completion
check. A process called "snagging" is done to find mistakes or unfinished work, which the
contractor fixes in an agreed time. After that, the initial handover paper is signed, and usually,
and cost?
95% of the contract money is paid. However, the contractor is not fully free of responsibilities A snag list is a document created during the initial handover of a construction project. It lists
because the guarantee period is still ongoing. defects, unfinished work, or areas that need fixing. The contractor must fix these issues within
Final delivery happens after the guarantee period, which usually lasts 12 to 24 months. During an agreed time. Completing the snag list makes sure the project meets the required standards
this time, all problems found in the initial delivery are fixed. Once everything is resolved, the and allows it to move to the final handover.
client officially accepts the project by signing the final handover paper, and the contractor is The snag list is related to the completion of the project because it helps solve the remaining
fully free of contract responsibilities. Retention money kept for fixing hidden problems is also problems. It also affects the cost, as fixing the issues requires extra time and resources, which
returned to the contractor after the guarantee period. are part of the project's costs.

8) What does “measured works” cost mean in Construction projects? 17) What is importance of construction site conditions on project cost?
Measured works cost refers to the direct costs for specific and quantifiable construction Construction site conditions greatly affect the preliminary costs. These costs are needed to set
activities. These costs are for materials and labor needed to complete parts of the project. up and maintain the construction site before and during the project. The conditions on site
They are listed in the Bill of Quantities (BoQ), where quantities are matched with unit prices to decide how much money is spent on preparing the site, temporary utilities, safety measures,
estimate costs. Measured works costs can change based on the work scope, material prices, environmental protection, and project management. If the site conditions are simple and
and labor rates. smooth, the processes will be more efficient, helping to control overall project costs better.
Examples of measured works include:
*Concrete pouring (measured in cubic meters)
*Wall construction (measured in square meters of brickwork)
*Structural steelwork (measured in tons or kilograms)
*Roofing, plastering, and tiling
*Mechanical, electrical, and plumbing (MEP) installations
9) How is the unit price of the work estimated?
The unit price of work is estimated by calculating the cost of materials, labor, and other
inputs needed for each unit of work. This is done using the Bill of Quantities (BoQ), where
quantities are listed and matched with unit prices. The total cost is then calculated by
multiplying the quantity by the unit price.
For example, if the unit price for concrete pouring is $100 per cubic meter and the project
requires \50 cubic meters, the total cost would be \100 \times 50 = 5000$. This helps