essay 2-3 pages Cost & Estimating

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CSMT 441

Introduction to Estimating

Lecture 3

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Estimating defined

• Estimating is the determination of probable

construction costs by analyzing, quantifying and

pricing each element of a given project

• Estimating must be thought of thoroughly since it

is done before construction begins

– A good estimator should be able to visualize the project

and accurately determine its cost

– Usually, competitive bidding is conducted with the

lowest bidder getting awarded the project. Here the

estimator works with working drawings and project

manuals and visualize different phases of a project

– Working drawing and project manual constitute

majority of contract documents, define the scope of

work and must be considered together in estimating 2

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Estimating defined cont.. • Working Drawings

– Contain information about design, location, dimensions

and construction of the project

• Project Manual/Specification

– Written supplement to the drawings and include

information pertaining to materials and workmanship,

and bidding process

• Working drawings and project manual complement each

other, and often overlap in the information they convey

• The bid submitted must be based on the scope of work

provided by the owner

• The estimator should include everything contained in the

drawings and the project manual in the submitted bid 3

Success in estimating

• For best estimating result, the complexity of

the process requires;

– Organization

– Estimator’s best judgment

– Complete specialty contractor’s (or subs) bids

– Accurate quantity takeoffs

– Accurate records of completed projects

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Success in estimating cont..

• Because of the complexity of the drawings and the project

manuals and probably errors in costs, the estimator must

pay full attention and read everything keenly and

recheck all items.

– The project plans and manuals must be checked for

completeness.

– Every item in the estimate must contain as much

information as possible

• Quantities determined in the estimate will be used to

order and purchase the needed materials

– The estimated quantities and their associated projected

costs will become the basis of project controls

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Direct and indirect costs • Estimating costs include direct costs and indirect

costs

• Indirect costs

– Are general conditions or project overhead costs

– Costs required to support the construction efforts

– Example; site office costs

• Direct costs

– Materials, labor, equipment, or subcontracted items that

are permanently and physically integrated into the

building

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Estimates • Types of Estimates

– Conceptual estimate

• The contractor prepares estimate based on project’s

concept

• Here, drawings may not be available or completed

• The contractor makes assumptions in almost every

aspect of project

• The conceptual estimate is used early in the design

process to check if the owner’s wants are in line with

their budget

– It may be used as a starting point for contract

negotiation

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Estimates cont.. • Types of Estimate cont..

– Preliminary estimate

• Prepared during the design process where the

contractor prepares and maintains a cost estimate

based on the current, but incomplete design

• May be used for negotiation with the general

contractor

Note:

• The similarity of conceptual and preliminary

estimate is that in both the design is incomplete

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Estimates cont.. • Types of Estimate cont..

– Detailed Estimate

• Once the design is complete, the estimator can prepare a

detailed estimate for the project

• Detailed estimate includes determination of the quantities

and costs of everything required to complete the project

– Materials, labor, equipment, insurance, bonds, overheads

and profits

• Requires complete set of contract documents / drawings

• Detailed estimate must establish

– The estimated quantities and costs of materials, the time

required for labor and its cost, the equipment required and

its cost, the items for overheads and cost of each and the

percentage of profits desired considering the time to

complete the project and its complexity 9

Estimating opportunities • Estimating skills is required by everyone in construction

– Estimator, carpenter, project designer, drafters, engineers, contractors,

sub-contractors, material suppliers, e.t.c.

• Areas estimating is needed

– Architectural offices

– Engineering offices

– General contractors

– Estimating with quantities provided

– Subcontractors

– Material suppliers

– Project management

– Government

– Professional quantity surveyors

– Freelance estimators

• For businesses (combining both drafting and estimating) 10

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The estimator • Most estimators begin their careers doing quantity

take offs and later on as they develop experience

and judgement become estimators

• In order to be able to do quantity take offs, the

estimator must;

– Have the patience and ability to do careful and neat work

– Be able to read plans and quantify them

– Have keen mathematical knowledge and clear understanding

of geometry, algebra and trigonometry

– Be computer literate and use computer take-off programs

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The estimator cont.. • In order to be an estimator, an individual needs to go a

step further and be able to;

– Visualize the project through its phases of construction just

by looking at the drawings; be able to foresee problems in

equipment placement or material storage and be able to

determine estimated costs

– Have construction experience to have knowledge of job

conditions (e.g., most economical method of construction

and labor productivity), thereby be able to visualize the

project and get the most accurate estimate

– Be able to keep database of cost information of all kinds

(labor, equipment, materials, project overheads) as well as

knowledge of the availability of all the required items

– Communicate your bids amicably to all (e.g.,

superintendents)

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The estimator cont.. • In order to be an estimator, an individual needs to go a step

further and be able to;

– Be computer literate and know the computer assisted estimating

– Meet or beat bid deadlines and still remain calm, even in the rush

of last minute phone calls just before the bids are due…estimators

must keep their calm/cool

– Have good writing and presentation skills; be able to communicate

what your company has to offer and the content of the bid

• People cannot be taught judgment and experience (which

is obtained overtime), but they can be taught;

– Acceptable avenues to preparing winning estimates/bids

– Items to include in the estimate

– Calculations required and how to organize them

– How to identify the errors and avoid them

• The skill enables use of accurate method; judgement

enable proper visualization of the project 13

The estimator cont.. • What skills are required to be a good estimator

– Good understanding of construction methods, labor,

materials and the capacity of skilled labor

– Ability to read blue prints

– Knowledge to determine the needed quantities for a project

– Strong mathematics skills

– Strong communication skills(verbally/orally and written)

– Strong computer skills

– Detail oriented

– Have the confidence to quickly take off quantities and make

decisions under pressure

– Desire to constantly improve

• Estimating requires practice

– It is an art and science and you can only become good at it

by constant practice 14

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The estimator cont.. • What is quantity take off?

– Process of converting dimensions and plans (measurement) into

estimated quantities

– Accomplished through visual thought process and recording the

needed materials, labor and equipment

• Who is the estimator?

– Person with the job title of estimator

– Anyone who orders materials, labor or equipment

– Scheduler

• What is the role of Estimator

– Estimating the needed quantities of materials, labor and equipment

for the job

– Estimating the time needed to complete the job

– Preparing cost estimates

• Tools required of an estimator

– Scale/ruler; calculator and paper; Spreadsheet; Estimating software 15

Quantity Surveying

• Used in Africa, Asia, Canada and Europe (UK)

• The estimated quantities of materials for a project are

determined by professional quantity surveyors or cost

engineers and provided to the interested bidders on the

project

• The contractors will be bidding on the same quantities

and the estimators spend time developing the unit prices

– The winning bidder will be selected from the bids submitted

• As the project is built, the actual number is checked against

the original number the estimator was made and

adjustment is made accordingly

• Approach to estimating method by quantity surveyor (QS)

– keeping general conditions low

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