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Construction item pricing: For more profit and less risk

David Cattell, Bond University

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Cattell, D. (2011). Construction item pricing: For more profit and less risk. Cape Town, South Africa: UCT Press.

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© Copyright David Cattell, 2011

Abstract

The pricing of the constituent component items of a project has a substantial infl uence on the profi tability of a project for a building contractor. Despite this, there has been relatively little research done on this subject since ‘unbalanced bidding’ (the manipulation of component item prices) was identifi ed as a viable strategy 50 years ago. The science now confi rms that there are considerable benefi ts for building and engineering contractors if they adopt a well-disciplined and well-informed approach to the pricing of their work. This book outlines a new approach, called CUP Theory (Construction Unit Pricing Theory), which is intended to lay a new foundation for a scientifi cally based approach to item pricing. It shows that contractors could increase their profi t by as much as 150% without much change to their risk. The author has included a CD containing the program by which pricing can be calculated, and has presented it so that it can be further worked on by those researching the field.

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