Let us assume that a project owner puts out a projected $1,000,000 project for bid to 10 potential general contractors and that each of these 10 submits a bid. However, none of the potential general contractors can perform all the projected construction work. Each general contractor plans to subcontract one-half of the work to specialty contractors. This subcontracted work is to be awarded through 10 separate specialty subcontracts. In other words, the project will be built by a general contractor and 10 specialty contractors. To find the lowest-cost subcontractors, each general contractor solicits, from a separate group of contractors, 3 subcontractor bids for each of the 10 subcontracts.
Using a general guideline that each $100,000 of construction work requires 20 hours of time for quantity takeoff, pricing and other steps necessary to preparing an estimate, and assuming that each person-hour of estimating equates to a $20 cost, calculate the total time and cost of estimating by all contractors involved.
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