Challenges in pricing preliminaries costs for contractors: An Australian case study

Abstract

The accurate estimation of project costs is pivotal for the ongoing financial success of construction companies. Despite the clear definition of direct costs in tendering information, indirect costs (also known as project overheads and preliminaries) are often overlooked or underestimated. These costs are influenced by various factors, including company resource availability, site and project characteristics, contractual conditions and procurement methods. The pricing of preliminaries is a complex task, and the varying nature of these costs, coupled with the lack of transparency in current pricing practices, can lead to significant discrepancies in tender pricing. The challenge is to identif..