Evaluation of price distribution of building elements in the Bills of Quantities of Locally Owned Construction Firms in South West Nigeria

Abstract

It is important to diagnose locally owned construction firms (LOCOFs) cash flow and hence their financial health through assessment of percentage cost allocation to various work items in the bills of quantities of new building projects. To this end, this paper analysed locally owned construction firms' priced bill of quantities (BOQ) of awarded building projects in order to demonstrate the appropriateness of their cash flow management plan and techniques. This is with an aim of improving the performance of local firms. Sixty BOQ of new building projects awarded to various LOCOFs in year 2007 to 2015 were assessed. Cost allocated to major early and finishing building element work stages were identified, analysed and relevant inferences bothering on firms’ financial plan and cash flow management techniques were discussed. The result showed that average percentage cost allocations for building preliminaries, substructure, frame structure, roof and finishes arranged in descending order had the highest cost allocation to building substructure (20.35%), finishes (12.98%), frame structure (12.31%), roof (12.08%) and preliminaries (2.85%). Also, 24 of the 60 BOQ had more than 50% of the contract sum allocated to building projects elements’ early stages of work. This cash receipt and payment early advantage can be well utilised by applying a well thought out cash flow management plan and technique that will boost LOCOFs’ working capital.