What are Preliminaries?
Preliminaries are items which cannot be directly attributed to any component, element or work section but are required to carry out the works specific to the project. They are usually provided in the beginning of any BOQ to make allowance for those costs which are necessary for the running of the project but are not specifically related to any one item or operation.
How are they classified?
As per the NRM 2, Prelims are classified into Main contract preliminaries and Work package contract preliminaries.
Main contract preliminaries include the main contractor’s costs associated with management and staff, site establishment, temporary services, security, safety and
environmental protection, control and protection, common user mechanical plant, common user temporary works, the maintenance of site records, completion and post-completion requirements, cleaning, fees and charges, sites services and insurances, bonds, guarantees and warranties. They exclude costs associated with subcontractors’ or work package contractors’ preliminaries.
Work package contract preliminaries are preliminaries that relate specifically to the work that is to be carried out by a work package contractor.
What does it contain?
Preliminaries contain 2 sections viz. Information & Requirements and Pricing Schedule.
The first section provides information which will help the Tenderer/Contractor in pricing the Preliminaries. It includes project particulars, drawings referred for quantity takeoff, describes the site and any existing buildings and services, any known constraints which may impact the construction methodology, the form of contract, any special methods of measurement, employer’s specific requirements etc.
The second section is for the Tenderer/Contractor to price for their cost items and for the employer’s specific requirements based on the information provided in the first section.
How are the items categorized for payment?
The priced items in the second section are normally divided into three categories, viz. initial, recurring and final costs. The percentage of initial and final costs are fixed and payable during the commencement and completion of the project. The recurring costs are distributed evenly across the entire construction period.
What is the difference between Preliminaries and Overheads?
They are more or less the same. However, Preliminaries are specific to the project whereas Overheads are more general in nature.
A simple flowchart to categorize an item into Work section cost, Prelims and Overheads is given below.