Email from project manager to financial officer: Did all three bids

Question

Email from project manager to financial officer
August 3, 9:43 a.m.

Did all three bids arrive on time last night? We need to minimize delays on construction, so if the contractors have submitted their estimates and our research team has compiled reports on the contractors’ histories, we should make a decision on which firm to hire by the end of the day.Email from financial officer in response to the project manager’s August 3, 9:43 a.m. email
August 3, 10:12 a.m.

Appaloosa Construction sent us a bid of $1.35 million. Its bid is the highest of the three, but its track record is spotless; none of the past 10 major projects it has worked on has gone over budget by more than 4 percent. Breton Construction did manage to underbid them—its representative claims that it can do the project for $1.25 million. However, in the past two years, Breton oversaw two different projects that went over budget by a full 25 percent. If our project were to exceed Breton’s estimate by a comparable percentage, we would run out of funds before completion. Finally, Campolina Construction presented a $1.1 million plan, and its track record is as good as Appaloosa’s. Unfortunately, although Appaloosa and Breton can both start tomorrow, Campolina would be unable to begin work until August 25, so we cannot accept Campolina’s low bid.Email from project manager in response to the financial officer’s August 3, 10:12 a.m. email
August 3, 10:38 a.m.

Even though Breton’s work could potentially cost less than either of the other two, that savings does not justify the risk of being unable to complete the project. But as far as Campolina is concerned, you’re not considering the actual cost of a delay. It’s true that we are losing money at a constant rate each day we don’t start building. But even after factoring in the losses of waiting until August 25, the estimated cost of working with Campolina still ends up $50,000 below Appaloosa’s bid.

JoeAa · Answer

I didn't find 'The project manager and the financial officer disagree about the best choice of contractors for completing the project.' Yes in the question. Would you please help explain? 
I don't think any decision has been made so how would there be any disagreement or not?

Sajjad1994 · Answer

Please read carefully; the second and third tabs both contain the disagreement between the two.

Thank you

JoeAa · Answer

I think tab two showed the standpoint of the financial officer and tab three showed the PM disagreed. But then there's no extra reference telling the FO disagreed with what the PM is telling?

ChayanikaM · Answer

Can Someone explain the second question?

chetan2u · Answer

Campolina Construction presented a $1.1 million plan, which is 0.25 less than Appaloosa's bid.

But, due to delay of almost 22 days, the cost of C's cost becomes onle 0.05 less. Thus 22 days delay cost around 0.20 million
or 200,000/22 or 10,000 nearly

ShubhamKumar2967 · Answer

In the second tab, since the company is still saving 50K by going forward with CC instead of AC. The estimated cost of delay comes out as 350 K. 
i.e. Difference b/w AC and CC = 0.4 Millions, company saved 50K even with a delay of 22 days, this means that the daily loss is about 0.35 Millions. 
Please tell me where did I go wrong.

Charlotte825 · Answer

Your way is right just the estimated cost of delay is worng, making all the other steps dependent on this mistake: The difference between CC and AC (estimated cost) are 1.35M-1.1M = 250 K 250K-50K(savings)= 200K 200K/22 = around 10 000 a bit less hope that helps!

xyz12345678 · Answer

but the tab doesnt give a definitive choice by either of them

Yes	No
		In making their decision, the project manager and the financial officer considered how much time the contractors would spend on construction.
		The project manager and the financial officer disagree about the best choice of contractors for completing the project.
		The project manager is willing to wait a few days before deciding on Campolina’s bid.

	$2,500
	$10,000
	$20,000
	$55,000
	$65,000

Email from project manager to financial officer: Did all three bids

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Email from project manager to financial officer: Did all three bids

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