Construction cost estimating includes indirect costs like equipment depreciation and office worker wages and direct costs like materials and labour rates. Preconstruction estimates by qualified construction estimators assist owners and contractors in finishing projects profitably.
Understanding building materials, specs, procedures, codes, and market trends is essential for accurate Construction cost estimating. From reviewing a bid package to considering profit and contingencies, we’ll cover skilled estimators’ project cost estimation methods.
Steps of Construction Cost Estimating
Construction cost estimators follow the same basic procedures whether they work for an owner, specialist contractor, or general contractor—estimators design construction cost-estimating projects for competitive or negotiated bidding.
Construction cost estimators use bid documents, which include contract and building details. After that, they perform procedures to account for overhead, labour, materials, and insurance. A construction estimate from an estimator includes profit and contingency markups and all costs.
Examine Bid Bundle:
Security, owner agreements, basic conditions, supplementary conditions, and development specifics are included in the bid package. A trained assessor spends much time learning about the project because bidders must complete the job in the bid bundle. Construction estimators follow a standard bid package review procedure:
- Verify each specification: Estimators gather all the information needed for an appropriate estimate, whether the design business needs the documents sectioned or numbered sequentially.
- Gather project overview: Estimators may swiftly assess project scope, material needs, and quality by scanning specs.
- Analyze structural needs: Estimators review construction plans to identify material and equipment requirements.
- Analyze criteria: Estimators evaluate a structure’s MEP requirements, including underground work, and consider any specific floor plans, highlights, or finishes that may impact the project’s cost. Project workers often have practical experience in particular work areas.
The assessor will review bid records throughout construction cost estimating to ensure their estimate meets all requirements. The assessor uses the documentation to understand and evaluate the task.
Visit the Site:
In some circumstances, a site inspection is required before bidding. However, assessors typically believe that a site visit is better than relying on plans or photos to evaluate the building site. For example,
- Poor drainage, harsh soil conditions, or neighbouring structures might raise project complexity and cost.
- A location with limited accessibility may incur higher costs for transporting materials and equipment.
- Unsuitable utility locations, like water, electricity, etc., may require costly subterranean construction.
- An estimator will visit the site, collect notes and photography, and collaborate with contractors to assess potential impacts on project completion.
Construction Cost Estimating Material:
Estimators count each project item in the construction papers to estimate materials. Material demands usually follow measurement order. For instance:
- Quantity, like doors
- Area (as in flooring or plasterboard)
- Volume (as in concrete)
- Length, like wire
A large building project owner or engineer may develop a bill of quantities to simplify bid levelling. This paper details the tasks and resources required for the project. Even with a BOQ, most contractors survey building cost estimation projects to validate data and find problems.
General contractors frequently leave to build work packages they can finish or subcontract to specialists. Speciality contractors check requirements before contacting vendors and suppliers for material takeoff to ensure an exact count. Estimators list all items needed to finish the job after taking off. Estimators also use takeoff data to determine work package equipment needs.
Assess Labor Needs:
Construction cost estimating helps estimators determine project labour. To summarize, the estimate must identify:
- Required positions for the project.
- Estimated project duration in hours.
How well will the team be informed about the current project and earlier initiatives?
Specialist contractors employ labourers, helpers, and merchants. For general contractors, project-specific managers, and other professionals, there are direct costs because they work on one project. To limit risk, owners and contractors should consider the cost of insurance and bonds, which should be reflected in project estimates. Most building cost estimators require general liability insurance. Businesses may have additional policies, such as construction risk coverage, professional liability insurance, and Island Marine insurance, depending on their size, nature, and role.
Profit and Contingency:
After estimating building costs, the estimator adds contingency and profit margin. The contractor’s Construction cost estimating contract profit could develop the business. In contrast, a contingency is a percentage of the contract for waste and overruns, which are frequent in construction.
Industry-wide contingency numbers vary by construction type, business size, and project risk. Construction businesses sometimes add 5–10% to the contract price for contingencies. The estimator calculated a profit-making sales price that covers labour, materials, overhead, and contingencies. After
