A specialty contractor or subcontractor is a separate contractor hired by the prime contractor to perform certain portions of the work. The amount of work that the prime contractor will subcontract varies from project to project.

Some federal and state regulations limit the proportion of a project that may be subcontracted, but this is rarely the case in private work. There are advantages and disadvantages to using specialty contractors.

Trades such as plumbing, electrical, and heating and air-conditioning have a tradition of being performed by specialty contractors, due to their specialized nature and licensing requirements. However, specialty contractors can now be found who are capable of performing every aspect of the construction project.

Contractors today can construct entire projects without having any direct-hire craft personnel. The use of specialty contractors has gained popularity as a means to reduce risk and overhead; however, the contractor gives up a substantial amount of control when subcontracting the entire project.

If specialty contractors are to be used, the contractor must be certain to notify them early in the bidding period so that they have time to prepare a complete, accurate proposal. If rushed, the specialty contractor tends to bid high just for protection against what might have been missed.

The use of specialty contractors can be economical, but estimates still must be done for each portion of work. Even if the estimator intends to subcontract the work, an estimate of the work should be prepared. It is possible that the estimator will not receive proposals for a project before the bid date and will have to use an estimated cost of the work in totaling the proposal.

All subcontractors’ proposals are compared with the estimator’s price; it is important that a subcontractor’s price is neither too high nor too low. If either situation exists, the estimator should call the subcontractor and discuss the proposal with him.

The specialty contractor’s proposal is often phoned, faxed, or e-mailed into the general contractor’s office at the last minute because of the subcontractor’s fear that the contractor will tell other subcontractors the proposal price and encourage lower bids. This practice is commonly referred to as bid peddling or bid shopping and is highly unethical and should be discouraged.

To prevent bid shopping, specialty contractors submit their final price only minutes before the bids close, which leads to confusion and makes it difficult for the estimator to analyze all bids carefully. This confusion is compounded by specialty contractors who submit unsolicited bids. These bids come from specialty contractors who were not contacted or invited to submit a bid, but who find out which contractors are bidding the project and submit a bid.

Since these companies are not prequalified, there is an element of risk associated with accepting one of these bids. On the other hand, not using low bids from unsolicited subcontractors places the contractor at a price disadvantage.

In checking subcontractor proposals, note especially what is included and what is left out. Each subsequent proposal may add or delete items. Often the proposals set up certain conditions, such as use of water, heat, or hoisting facilities. The estimator must compare each proposal and select the one that is the most economical.

All costs must be included somewhere. If the subcontractor does not include an item in the proposal, it must be considered elsewhere. A tricky task for the prime contractor is the comparison of the individual subcontractor’s price quotes.

Throughout the estimating process, the prime contractor should be communicating with the specific subcontractors concerning the fact that they will submit a price quote and what scope of work is to be included within that quote. However, subcontractors will include items that they were not asked to bid and will exclude items that they were asked to bid.

A “bid tabulation” or “bid tab” is used to equalize the scope between subcontractors so that the most advantageous subcontractor’s bid can be included in the prime contractor’s bid.


The compositional specifications for wrought aluminium alloys are now internationally agreed throughout Europe, Australia, Japan and the USA. The system involves a four-digit description of the alloy and is now specified in the UK as BS EN 573, 1995.

Registration of wrought alloys is administered by the Aluminum Association in Washington, DC. International agreement on temper designations has been achieved, and the standards agreed for the European Union, the Euro-Norms, are replacing the former British Standards.

Thus BS EN 515. 1995 specifies in more detail the temper designations to be used for wrought alloys in the UK. At present, there is no Euro-Norm for cast alloys and the old temper designations are still used for cast alloys.

In the following tables the four-digit system is used, wherever possible, for wrought materials.

Alloy designation system for wrought aluminium
The first of the four digits in the designation indicates the alloy group according to the major alloying elements, as follow:

1XXX aluminium of 99.0% minimum purity and higher
2XXX copper
3XXX manganese
4XXX silicon
5XXX magnesium
6XXX magnesium and silicon
7XXX zinc
8XXX other element, incl. lithium
9XXX unused

1XXX Group:
In this group the last two digits indicate the minimum aluminium percentage.
Thus 1099 indicates aluminium with a minimum purity of 99.99%. The second digit indicates modifications in impurity or alloying element limits. 0 signifies unalloyed aluminium and integers 1 to 9 are allocated to specific additions.

2XXX-8XXX Groups:
In these groups the last two digits are simply used to identify the different alloys in the groups and have no special significance. The second digit indicates alloy modifications, zero being allotted to the original alloy.

National variations of existing compositions are indicated by a letter after the numerical designation, allotted in alphabetical sequence, starting with A for the first national variation registered.


For matters relevant to estimating and costs, the best source of information is your historical data. These figures allow for the pricing of the project to match how the company actually performs its construction.

This information takes into account the talent and training of the craft personnel and the management abilities of the field staff personnel. In addition, it integrates the construction companies’ practices and methodologies.

This is why a careful, accurate accounting system combined with accuracy in field reports is so important. If all of the information relating to the job is tracked and analyzed, it will be available for future reference.

Computerized cost accounting systems are very helpful in gathering this information and making it readily available for future reference. See Construction Accounting and Financial Management by Steven J. Peterson for more information on managing construction accounting systems.

There are several “guides to construction cost” manuals available; however, a word of extreme caution is offered regarding the use of these manuals. They are only guides; the figures should rarely be used to prepare an actual estimate.

The manuals may be used as a guide in checking current prices and should enable the estimator to follow a more uniform system and save valuable time. The actual pricing in the manuals is most appropriately used in helping architects check approximate current prices and facilitate their preliminary estimate.

In addition to these printed guides, many of these companies provide electronic databases that can be utilized by estimating software packages. However, the same caution needs to be observed as with the printed version.

These databases represent an average of the methodologies of a few contractors. There is no simple way to convert this generalized information to match the specifics of the construction companies’ methodologies.


Basically, the two bidding procedures by which the contractor gets to build a project for owners are as follows:

1. Competitive bidding
2. Negotiated bidding

Competitive bidding involves each contractor submitting a lump-sum bid or a proposal in competition with other contractors to build the project. The project may be awarded based on the price or best value.

When the project is awarded based on the price, the lowest lump-sum bidder is awarded the contract to build the project as long as the bid form and proper procedures have been followed and this bidder is able to attain the required bonds and insurance.

When the project is awarded based upon the best value, the proposals from the contractors are rated based on specified criteria with each criterion given a certain percentage of the possible points. The criteria may include review of the capabilities of the assigned project team, the company’s capabilities and its approach to the project (including schedule), proposed innovation, method of mitigating risk, and price.

The price is often withheld from the reviewers until the other criteria have been evaluated to prevent the price from affecting the ratings of the other criteria. Most commonly, the bids must be delivered to the person or place specified by a time stated in the instruction to bidders.

The basic underlying difference between negotiated work and competitive bidding is that the parties arrive at a mutually agreed upon price, terms and conditions, and contractual relationship. This arrangement often entails negotiations back and forth on virtually all aspects of the project, such as materials used, sizes, finishes, and other items that affect the price of the project.

Owners may negotiate with as many contractors as they wish. This type of bidding is often used when owners know which contractor they would like to build the project, in which case competitive bidding would waste time.

The biggest disadvantage of this arrangement is that the contractor may not feel the need to work quite as hard to get the lowest possible prices as when a competitive bidding process is used.


The first step in understanding earthquake risk is to dissect the earthquake risk or loss process into its constituent steps. Earthquake risk begins with the occurrence of the earthquake, which results in a number of earthquake hazards.

The most fundamental of these hazards is faulting, that is, the surface expression of the differential movement of blocks of the Earth’s crust. Faulting can be a simple “mole-track” lateral movement, or a major vertical scarp, or may not even be visible.

In most cases, faulting is typically a long narrow feature, and therefore affects a relatively small fraction of the total affected structures and persons. Affecting a much greater number of structures and persons is shaking, which is typically the primary hazard due to earthquakes.

Depending on the earthquake, liquefaction, other forms of ground failure, tsunamis, or other types of hazards may be significant agents of damage. For various reasons, many buildings, portions of the infrastructure, and other structures cannot fully resist these hazards, and sustain some degree of damage.

Primary damage can vary from minor cracking to total collapse. Some building types are more vulnerable than others, but even when a building sustains no structural damage, the contents of the building may be severely damaged.

For certain occupancies, such as hospitals or emergency services dispatch centers, this damage to contents (laboratories, specialized machinery, communication equipment, etc.) can be very important. Additionally, these various kinds of primary damage can lead to other secondary forms of hazard and damage, such as releases of hazardous materials, major fires, or flooding.

Damage results in loss.
Primary loss can take many forms — life loss or injury is the primary concern, but financial loss and loss of function are also of major concern. The likelihood of sustaining a loss is termed risk . Primary losses lead to secondary forms of loss, such as loss of revenues resulting from business interruption and loss of market share and/or reputation.


In Canada, parts of Europe, and on most road construction projects in the United States, the estimated quantities of materials required on the project are determined by a professional quantity surveyor or engineer and provided to the interested bidders on the project.

This is often referred to as a unit price bid. In this method of bidding, the contractors are all bidding based on the same quantities, and the estimator spends time developing the unit prices. For example, the bid may be $47.32 per cubic yard (cy) of concrete.

Because all of the contractors are bidding on the same quantities, they will work on keeping the cost of purchasing and installing the materials as low as possible.

As the project is built, the actual number of units required is checked against the original number of units on which the estimates were made. For example, the original quantity survey called for 715 linear feet (lf) of concrete curbing.

If 722 lf were actually installed, then the contractor would be paid for the additional 7 lf. If 706 lf were used, then the owner would pay only for the 706 lf installed and not the 715 lf in the original quantity survey.

This type of adjustment is quite common. When errors do occur and there is a large difference between the original quantity survey and the actual number of units, an adjustment to the unit price is made. Small adjustments are usually made at the same unit rate as the contractor bid.

Large errors may require that the unit price be renegotiated. If the contractor is aware of potential discrepancies between the estimated quantities and those that will be required, the contractor may price his or her bid to take advantage of this situation.

With a belief that the estimated quantities are low, the contractor may reduce his or her unit price to be the low bidder. If the assumption is true, the contractor has the potential to make the same profit by distributing the project overhead over a greater number of units.