Dokumentation og international benchmarking af bygge - Danmarks ...

Figure 1.Conceptual frame: Construction costs, output prices and selling prices in the ConstructionsectorContractor Client Final ownerMaterialsLabourEquipmentTransportEnergyAConstructioncosts( input prices)ProductivityBOutputprices(producerprices)OtherProfit marginsArchitect’sfeeSiteClient costsCVATSelling priceOthercostsProfit margins(Costs tofinal client)Note: Productivity influences the contractor’s output price. Productivity is however not an actual costelement. This difference is reflected in figure 1 by using a dotted line to draw up the productivity box.To what extent are the three methods in coherence with the defined priceconcept?Component cost methodIn the component cost method all the construction costs are covered inthe form of pricing the selected and well-defined construction componentsdelivered from subcontractors to the contractor. Conceptually theprices collected for these components are the prices that the subcontractorhas agreed with the contractor. In that way the agreed prices cover thesubcontractors direct cost for materials, wages etc. as well as the subcontractorsprofits. The way productivity changes are reflected in the price isa result of an internal company policy. Increased productivity could leadto lower expenditures and increase the profit margins or the companycould decide to reduce the offered prices to improve the competitiveness.This depends on the market situation. However, since we are dealing withmarket prices, productivity is taken into account.However, the defined price concept of an output price index is not entirelymet by the component cost method, since it does not include the profitmargin and productivity in the contractors final construction work.Hence, the overall profit cannot be measured.100