EstimatingProcess

Agenda
Definitionofestimating
Whatisestimatinginconstruction?
Costvariableinconstruction
Typesofestimates
Conceptualestimate
Detailedestimate
AvoidingErrorsinEstimates

ESTIMATINGCONSTRUCTIONCOSTS
Thekeytoagoodjobandsuccessfulcostcontrol
isthedevelopmentofagoodestimateasthe
basisforbidsubmittal.
Estimatingistheprocessoflookingintothe
futureandtryingtopredictprojectcostsand
resourcerequirements.
Tominimizeerrors,aconsistentprocedureorset
ofstepsforpreparinganestimateisneededto
minimizeerrorsandachievereliableresults.

TYPESOFESTIMATES

TYPESOFESTIMATES
Type

When?

How?

Conceptual

Priortothecommencementof
design

Arepresentativeunitismultiplied
byapriceperunittoobtainagross
estimate( 10%accuracy)ofthe
facilitycost.

Preliminary

40%completionofthetotal
design

Bythearchitector
architect/engineertoreflect
expectedcostsbasedonmore
definitivedata.

Engineer

Detaildesignisaccomplished

Totaljobcostminusmarkup
Shouldachieveapproximately
3%accuracy.

Bid

Biddingphase

Onthebasisofthebidding
documents,
Includeamarkupforprofit.

ConstructionManagement,3/EbyDanielW.Halpin
Copyright 2006byJohnWiley&Sons,Inc.Allrightsreserved.

ConstructionManagement,3/EbyDanielW.Halpin
Copyright 2006byJohnWiley&Sons,Inc.Allrightsreserved.

Example 1: A 5M GPD desalinization plant was constructed in 1995 at a cost of 20M.

What would be the cost of 15M GPD in 2005, if the cost capacity factor is
0.37,andDesalinizationIndexDI2005=107,andDI1995=99.
x

CostCapacityformulaisoftheform:
x

C1 Q1
= , where x = cos t capacity factor (< 1)
C2 Q2

Q
15
C2 = C1 2 = 20 = 20 30.37 = 30 M
Q
5
1
C2(now)=30*107/99=32.4M
0.37

Example 2: You are required to submit an estimate for 6m high, 3000 m2 warehouse
construction. You looked up your cost file and found that you had built an
8mhigh,2500m2 for2.5M,7yearsagowhenthecostindexwas120.Ifthe
costindexisnow165,whatisyourcostestimatepercubicmeter?
Cost/m3(7)=2,500,000/(8*2,500)=125
Cost/m3(Now)=125*165/120=171.88
Estimate=171.88*6*3000=3,093,840

DETAILEDESTIMATEDEVELOPING
STEPS
1.Breaktheprojectintocostcenters.
2.Estimatethequantitiesrequiredforcostcentersthat
representphysicalenditems(e.g.,cubicyardsofearth,
linealfeetofpipe,etc.).Forphysicalsystemsthis
procedureiscommonlycalledquantitytakeoff.Forthose
costcentersthatrelatetononphysicalitems,determine
anappropriateparameterforcostcalculation(e.g.,the
levelofbuilder'sriskinsurancerequiredbythecontract
ortheamountsoftherequiredbonds).

ESTIMATEDEVELOPINGSTEPS(Contd)
3. Priceoutthequantitiesdeterminedinstep2usinghistorical
data,vendorquotations,suppliercatalogs,andotherpricing
information.Pricedevelopmentforphysicalworkitemsmay
requireananalysisoftheproductionratestobeachieved
basedonresourceanalysis.Ifthisanalysisisused,the
estimatormust:
a. Assumeworkteamcompositiontoincludenumberof
workers(skilledandunskilled)andequipmentrequired.
b. Onthebasisofteamcomposition,estimateanhourly
productionratebasedonthetechnologybeingused.
c. Makeanestimateoftheefficiencytobeachievedonthis
job,consideringsiteconditionsandotherfactors.
d. Calculatetheeffectiveunitprice.
4. Calculatethetotalpriceforeachcostcenter.

TypicalEstimate
SummarySheet

QUANTITYTAKEOFF
(SURVEYING)
Thedevelopmentofthequantitiesofworktobeplacedin
appropriateunits(e.g.,squarefeet,cubicyards,etc.).
Theproceduresemployedbytheestimatortocalculatethese
quantitiesshouldincorporatestepstominimizeerrors.
Fiveofthemostcommonerrorsexperiencedduringquantity
takeoffare:
1. Arithmetic:Errorsinaddition,subtraction,andmultiplication
2. Transposition:Mistakesincopyingortransferringfigures,dimensions,
orquantities
3. Errorsofomission:Overlookingitemscalledfororrequiredto
accomplishthework
4. Poorreference:Scalingdrawingsratherthanusingthedimensions
indicated
5. Unrealisticwasteorlossfactor.

WorkBreakdownStructureWBS
Foundation

Excavation

Concrete

Steel

ProjectControl

13

Workpackages
Aworkpackage isawelldefinedscopeofwork
thatusuallyterminatesinadeliverableproduct.
Eachpackagemayvaryinsizebutmustbea
measurableandcontrollableunitofworktobe
perform.
Italsomustbeidentifiableinanumerical
accountingsysteminordertopermitcaptureof
bothbudgetedandactualperformance
information.
Aworkpackageisacostcenter.

CSI MasterFormat 95 Titles for Divisions 1-16

1. GENERAL REQUIREMENTS
2. SITE CONSTRUCTION
3. CONCRETE
4. MASONRY
5. METALS
6. WOOD AND PLASTICS
7. THERMAL AND MOISTURE PROTECTION
8. DOORS AND WINDOWS
9. FINISHES
10. SPECIALTIES
11. EQUIPMENT
12. FURNISHINGS
13. SPECIAL CONSTRUCTION
14. CONVEYING SYSTEMS
15. MECHANICAL
16. ELECTRICAL

CE321 ConstructionManagement

Division3 Concrete
1. Concrete:
Plain Concrete
Reinforced Concrete: Substructure
Reinforced Concrete: Superstructure

2. Formwork

Foundations
Columns
Beams
Slabs

3. Reinforcing Steel
CE321 ConstructionManagement

PlainConcrete
Concrete is classified by type, strength, and location
Concrete volume is measured from detailed drawings
in cubic meters, rounded to the nearest 0.5 meter
Concrete Mat
Foundation (Spread,
Continuous, Raft)
Pedestal
Grade Beams
Shear Walls

Slab on grade
Columns
Beams
Slabs
Retaining Structures
Stairs & Landings

Use 5-10% waste factor

CE321 ConstructionManagement

FoundationDetails

CE321 ConstructionManagement

ASTMStandardReinforcingBars
Soft
Metric
Size

Nom
Diam
mm

10
13
16
19
22
25
29
32
36
43
57

9.5
12.7
15.9
19.1
22.2
25.4
28.7
32.3
35.8
43.0
57.3

Area
mm2

Weight
Factors
kg/m

71
129
199
284
387
510
645
819
1006
1452
2581

.560
.994
1.552
2.235
3.042
3.973
5.060
6.404
7.907
11.384
20.239

CE321 ConstructionManagement

Bar Size

(kg/m)

Area (mm)

0.222

28.3

0.395

50.3

10

0.617

78.5

12

0.888

113

14

1.21

154

16

1.58

201

20

2.47

314

25

3.85

491

28

4.83

616

32

6.31

804

40

9.86

1257

50

15.4

1963

CE321 ConstructionManagement

SmallWallConstruction

Activity
Material
List

UnitPrice
Iftheworkisfairlystandard,thecostcanbecalculated
bysimplytakingdollarperunitcostfromcompany
recordsandapplyingthiscostwithaqualitative
correctionfactortothequantityofworktobe
performed.

Unitpricingvaluesareavailableinmanystandard
estimatingreferences:
R.S.MeansCompany,buildingConstructionCostData
F.R.Walker'sTheBuildingEstimator'sReferenceBook
TheRichardsonGeneralConstructionEstimating
Standards

LineItemCostDevelopment
UsingR.S.Means

Figure13.1(p.206)
Costsbasedonarepresentativeunit.
(FromBuildingConstructionCostData.CopyrightReed
ConstructionData,KingstonMA7815857880allrights
reserved.)

AvoidingErrorsinEstimates
Theaccuracyofanestimateisameasureof
howaccurateorcorrectthenumbersinthe
estimateare
Thecompletenessofanestimateisameasure
ofwhetherthebidhasalltheitemsneeded
fortheprojectwithoutduplicatingitems

AvoidingErrorsinEstimates
ListCostCodes
SpendMoreTimeonLargeCosts
PrepareDetailedEstimates
MarkItemsCountedDuringtheQuantity
Takeoff

AvoidingErrorsinEstimates
DoubleCheckAllTakeoffs
IncludeUnitsinCalculations
AutomatewithSpreadsheets
UseWellTestedandCheckedFormulas
DoubleCheckAllCalculations

AvoidingErrorsinEstimates
PerformCalculationsinTwoWays
DropthePennies
HaveSomeoneReviewtheEstimate
ReviewEachCostCodeasaPercentageofthe
TotalCosts

AvoidingErrorsinEstimates
CheckUnitCostsforEachCostCode
CompareCoststoanotherProject
AllowPlentyofTime

Questions