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Please use this identifier to cite or link to this item: http://hdl.handle.net/123456789/5122

Title: An integrated approach to mark-up determination for large building contractors in Ghana
Authors: Badu, E.
Amoah, P.
Keywords: Mark-up
Bidding
Pricing practices
Ghana
Issue Date: 2004
Publisher: Journal of Science and Technology
Citation: Journal of Science and Technology, Vol. 24 No. 1, 2004 pp 93-105
Abstract: Most clients in Ghana use the competitive bidding system to select a suitable contractor to execute a building project The bid price, submitted by contractors, comprises an estimate of the direct cost, indirect cost and a mark-up. The mark-up is a percentage of the estimated total cost, which a contractor adds to the estimated direct and indirect costs to account for head office overhead costs, profit and contingencies. The size of the mark-up for a contractor varies from one bid to another, depending on a multiplicity of internal and external factors that are encountered in each mark-up decision. The very existence of a construction firm depends on its ability to assign an appropriate mark-up, which will enable the company to get enough jobs and significant profits. Therefore, it is a must that each contractor develops an integrated approach for determining this mark-up, which allows the company to achieve its objectives under different bidding situations. This paper first identifies the most important factors affecting the determination of the mark-up and further highlights the use of the selected factors to establish a fair and reasonable mark-up that satisfies the required rate of return of the contractor from the particular (or at least the general risk-class of) project at hand The approach developed will provide an analytical tool for establishing optimum mark-up for construction projects in Ghana.
Description: Article published in the Journal of Science and Technology, Vol. 24 No. 1, 2004 pp 93-105
URI: http://hdl.handle.net/123456789/5122
ISSN: 08550395
Appears in Collections:Journal of Science and Technology 2000-

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