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Glossaryofconstructioncostestimating
FromWikipedia,thefreeencyclopedia

AglossaryoftermsrelatingtoConstructionCostEstimating.

Contents:Top09ABCDEFGHIJKLMNOPQRSTUVWXYZ

A
Allocationofcostsisthetransferofcostsfromonecostitemtooneormoreothercostitems.[1]
Allowanceavalueinanestimatetocoverthecostofknownbutnotyetfullydefinedwork.[2]
Assoldestimatetheestimatewhichmatchestheagreeditemsandpricefortheprojectscope.

B
Basisofestimate(BOE)adocumentwhichdescribesthescopebasis,pricingbasis,methods,qualifications,assumptions,inclusions,
andexclusions.[3]
Billofmaterials(BOM)alistofmaterialsrequiredfortheconstructionofaprojectorpartofaproject,whichmayincludequantities.
Billofquantities(BOQ)adocumentusedintenderingintheconstructionindustryinwhichmaterials,parts,andlabor(andtheir
costs)areitemized.Italso(ideally)detailsthetermsandconditionsoftheconstructionorrepaircontractanditemisesallworktoenable
acontractortopricetheworkforwhichheorsheisbidding.
Bondusuallyreferstoaperformancebond,whichisasuretybondissuedbyaninsurancecompanyorabanktoguaranteesatisfactory
completionofaprojectbyacontractor.Othertypesofguarantees,suchasabidbondoramaterialsbond,aresometimesalsorequired
byaprojectowner.

C
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Chartofaccounts(Codeofaccounts)(COA)acreatedlistoftheaccountsusedbyabusinessentitytodefineeachclassofitemsfor
whichmoneyortheequivalentisspentorreceived.Itisusedtoorganizethefinancesoftheentityandtosegregateexpenditures,
revenue,assetsandliabilitiesinordertogiveinterestedpartiesabetterunderstandingofthefinancialhealthoftheentity.
Citycostindexsee:Locationcostindex.RSMeanspublishesacitycostindextable.[4]
Constructionisaprocessthatconsistsofthecreation,modification,ordemolitionoffacilities,buildings,civilandmonumentalworks,
andinfrastructure.
Constructioncostthetotalcosttoconstructaproject.Thisvalueusuallydoesnotincludethepreplanning,siteorrightofway
acquisition,ordesigncosts,andmaynotincludestartupandcommissioningcosts.Thistotalorsubtotalisusuallyidentifiedassuchin
anestimatereport.AlsoknownasTotalEstimatedContractCost(TECC).[5]
Consumablesaregoodsthat,accordingtothe1913editionofWebster'sDictionary,arecapableofbeingconsumedthatmaybe
destroyed,dissipated,wasted,orspent(alsoknownasconsumablegoods,nondurablegoods,orsoftgoods).Inconstruction,thesemay
includesuchmaterialsasweldrod,fasteners,tape,glue,etc.
ContingencyWhenestimatingthecostforaproject,productorotheritemorinvestment,thereisalwaysuncertaintyastotheprecise
contentofallitemsintheestimate,howworkwillbeperformed,whatworkconditionswillbelikewhentheprojectisexecutedandso
on.Theseuncertaintiesareriskstotheproject.Somerefertotheserisksas"knownunknowns"becausetheestimatorisawareofthem,
andbasedonpastexperience,canevenestimatetheirprobablecosts.Theestimatedcostsoftheknownunknownsisreferredtobycost
estimatorsascostcontingency.
Costthevalueofcurrencyrequiredtoobtainaproductorservice,toexpendlaboranduseequipmentandtools,ortooperatea
business.
Costindex(orfactor)avalueusedtoadjustthecostoffromonetimetoanother.[6]Therearevariouspublishedcostindexes,listedby
year,quarter,ormonth.RSMeanspublishesahistoricalcostindex.[7]
Costingtheprocessofapplyingappropriatecoststothelineitemsafterthetakeoff.RSMeansreferstothisas,"Pricethequantities."[8]
Mayalsobecalledpricing.
Crewagroupofpeople(workers)whoexecuteaconstructionactivity.Thecrewmayalsoincludeconstructionequipmentrequiredto
executethework.
Crewhour(ch)onecrewseffortforonehouroftime.[9]

D
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Deliverableisatermusedinprojectmanagementtodescribeatangibleorintangibleobjectproducedasaresultoftheprojectthatis
intendedtobedeliveredtoacustomer(eitherinternalorexternal).
Directcostsaredirectlyattributabletothecostobject.Inconstruction,thecostsofmaterials,labor,equipment,etc.,andalldirectly
involvedeffortsorexpensesforthecostobjectaredirectcosts.
Distributablesaclassificationofprojectcostswhicharenotassociatedwithanyspecificdirectaccount.[10]
Durationtheamountofclockorcalendartimewhichisrequiredtoexecuteaworkactivityortask.

E
Efforttheworkdoneinaccomplishingataskorproject.Maybeameasurementofthehoursrequired.
Equipment(1)acategoryofcostfororganizingandsummarizingcosts,(2)constructionequipmentusedtoexecutetheprojectwork,
(3)engineeredequipmentsuchaspumpsortanks.
Escalationisdefinedaschangesinthecostorpriceofspecificgoodsorservicesinagiveneconomyoveraperiod.Inestimates,
escalationisanallowancetoprovidefortheanticipatedescalationofcostsduringconstruction.
Estimationinprojectmanagementistheprocessesofmakingcostestimatesusingtheappropriatetechniques.

F
Facilityaninstallation,contrivance,orotherthingwhichfacilitatessomethingaplacefordoingsomething.Abuilding,plant,road,
reservoir,etc.
FieldSupervision(orfieldnonmanual)supervisorypersonnelandallothernonmanualstaffattheconstructionsite.
Foremantheworkerortradesmanwhoisinchargeofaconstructioncrew.Theforemanmaybeahandsonworkerwhocontributesto
theworkcompletionoranonworkingforeman.Ageneralforemanmaybeinchargeofallorsomecrews.
FringeBenefitslaborcostelementswhichareprovidedtopayforbenefitsreceivedbyworkers,suchashealthinsurance,pension,
training,etc.

G
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General&AdministrativeCosts(G&A)thecostsofoperatingaconstructionbusiness.Thesecostsincludesuchthingsasoffice
space,officestaff,operatingfacilities,etc.Theyarenotassociatedwithanyspecificproject,butmaybeallocatedacrossprojectsina
costestimate.SeealsoOverhead,Indirectcost.
Generalcontractorisresponsibleforthedaytodayoversightofaconstructionsite,managementofvendorsandtrades,and
communicationofinformationtoinvolvedpartiesthroughoutthecourseofabuildingproject.
Generalrequirementscostsforgeneralrequirements(Division1)oftheprojectexecutionwhichareactuallypartofthedeliverable.
Examples:projectmanagement&coordination47,temporaryfacilities&controls,cleaning&wastemanagement,commissioning.[11]

I
Indirectcostsarecoststhatarenotdirectlyaccountabletoacostobject(suchasaparticularproject,facility,functionorproduct).See
also,Overhead,General&AdministrativeCost,Distributable.

L
Laboracategoryofcostwhichisincurredtoemploypeople(workers,crafts,trades,etc.)intheexecutionofconstructionwork
activity.
Laborbenefitsareadditionalcosts(suchasholidaypayorhealthinsurance)whichtheemployerpaysdirectlytotheemployeeorintoa
fundonbehalfoftheemployee.
Laborburdenisthecostofpayrolltaxesandinsurances(suchasworkers'compensation)whichtheemployermustpaytoemploy
workers.
Laborrate(sometimesprice)theamountofcurrencyperunitoftimewhichisrequiredtoemploypeople(workers,crafts,trades,etc.)
intheexecutionofconstructionworkactivity.Theratemayrepresentthewagerateonly,ormayincludevariousbenefitsandlabor
burdens.
Lineitemoneelementofcostinanestimatewhichislistedintheestimatespreadsheet.
Locationcostindex(orfactor)theratioofthecostinonelocationtothatinanotherlocation.Thesemayincludeorexcludecurrency
exchangerates.Example:223inBoston/187inAustin=1.19.Thelocationcostfactorisusedtoadjustthecostfromonelocationto
another.ToadjustaknowncostinAustintothatinBoston,multiplytheAustincostby1.19.SeealsoCitycostindex.
Lumpsum"thecompleteinplacecostofasystem,asubsystem,aparticularitem,oranentireproject."[12]
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M
Manhour(mh)onepersons(worker,craftsman,tradesman,etc.)effortforonehouroftime.Note:someattempttomakethisgender
neutralbyrenamingthisasworkhourorjobhourorpersonhour,orsomethingsimilar.
Manhournormsasetofstandardmanhourratesforworktasks,givennormalworkingconditions.
Manhourratetheamountofmanhourswhichareconsumedexecutingoneunitofworkactivity.Manhourrate=manhours
requiredforwork/completedworkquantity.Example:Excavation0.125mh/cy.Themanhourrateisrelatedtotheinverseofthe
productionratetimesthenumberofworkersinthecrewperformingthework.Example:Excavationat80cy/day(8hourday)with2
mancrew=2x8/80=0.2manhours/cy.SeealsoProductionrate.Note:somesourcescallthisProductivity,anunnecessary
confusion.
Markupisthedifferencebetweenthecostofagoodorserviceanditssellingprice.Amarkupisaddedontothetotalcostincurredby
theproducerofagoodorserviceinordertocreateaprofit.
Manuallaborisphysicalworkdonebypeopleinvolvedinconstructiontheproject.Allofthevarioustradeworkersareincludedin
manuallabor,includingforemen.
Means&methodsthemeansandmethodsusedinexecutingthework.

N
Nonmanuallaborworkdonebypeoplewhoarenotclassifiedasmanuallabor.
Nonproductivetimeworktimewhichispaidbutdoesnotcontributetotheproductionofwork.Examples:safetymeeting,travel
time,cleanuptime,washuptime,etc.

O
Openshopisaplaceofemploymentatwhichoneisnotrequiredtojoinorfinanciallysupportaunion(closedshop)asaconditionof
hiringorcontinuedemployment.Openshopisalsoknownasameritshop.
OverheadInbusiness,overheadoroverheadexpensereferstoanongoingexpenseofoperatingabusinessitisalsoknownasan
"operatingexpense."SeealsoGeneral&AdministrativeCost,IndirectCost.
Overtimeistheamountoftimesomeoneworksbeyondnormalworkinghours.
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P
Perdiemadailyallowanceforexpenses,aspecificamountofmoneythatanorganizationgivesanindividualperdaytocoverliving
andtravelingexpenses(allowance)inconnectionwithworkdoneawayfromhomeorontour.(Latinfor"perday"or"foreachday")
Plugnumberavalueinsertedinanestimateasaplaceholderandanapproximationofthecostforascopeelementwhichhasnotbeen
detailedyet.SeealsoAllowance.
Premiumpaytheextraportionofwagespaidwhenaworkerworksovertime.Example:Wagerateis10.00/hour,overtimeispaidat
timeandahalf,or15.00/hour,thepremiumpayis5.00/hour.
Priceisthequantityofpaymentorcompensationgivenbyonepartytoanotherinreturnforgoodsorservices.
Pricingisthefunctionofdeterminingtheamountofmoneyaskedinconsiderationforundertakingtheproject.Dependingonthemarket
andprofitconsiderations,etc.,thepricemaybemoreorlessthanthecost.[13]
Productionratethequantityofworkwhichiscompletedinoneunitoftime.[14]Productionrate=completedworkquantity/duration.
Example:Excavation80cy/day=10cy/hour(inan8hourday).RSMeansliststhisasDailyOutput.[15]SeealsoManhourrate.Note:
somesourcesusethetermproductivityfortheproductionrateormanhourrate,anunnecessaryconfusion.
Productivityisthetermwhichrelatesoneratetoanotherrate,giventwodifferingsetsofconditionsforthesamework.Aproduction
rategreaterthanthereferenceproductionrateindicatesahigherproductivity.Aproductionratelessthanthereferenceproductionrate
indicatesalowerproductivity.Amanhourrategreaterthanthereferencemanhourrateindicatesalowerproductivity.Amanhourrate
lessthanthereferencemanhourrateindicatesahigherproductivity.(Theeconomicconceptofproductivityisanaveragemeasureof
theefficiencyofproduction.Productivityisaratioofproductionoutputtowhatisrequiredtoproduceit(inputs).)
Productivityfactortheratioofaselectedproductionratetoareferenceproductionrate.Example:selectedrate=102,referencerate
=80,productivityfactor=102/80=1.28.Alternativelytheratioofareferencemanhourratetoaselectedmanhourrate.Example:
selectedrate=0.104,referencerate=0.125,productivityfactor=0.125/0.104=1.20.Aproductivityfactorisoftenusedtoadjustaset
ofstandardornormal(norm)productionormanhourratestoasetofratesforaspecificproject,location,orsetofworkingconditions
(seeLaborProductivityFactor).[16]Example:Specifictypeofexcavationstandard=150cy/day.Forspecificproject,location,or
conditionstheproductivityfactoris0.80.Theresultingproductionrateforthatis150x0.8=120cy/day.Theactualproductivityfactor
foraprojectorsubsetofproductionrates(ormanhourrates)istheratiooftheactualproductionratetotheestimatedproductionrate.
Profitinaccounting,isthedifferencebetweenrevenueandcost.Inestimates,itisanallowancetoprovideforanticipatedprofitupon
completionoftheproject.
Profitmarginreferstoameasureofprofitability.Itiscalculatedbyfindingthenetprofitasapercentageoftherevenue.
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ProjectAtemporaryendeavorundertakentocreateauniqueproduct,service,orresult.[17]

Q
Qualitycanmeanahighdegreeofexcellence(aqualityproduct)oradegreeofexcellenceorthelackofit(workofaverage
quality).
Quantifysee:Takeoff
Quantityisapropertythatcanexistasamagnitudeormultitude.Forexample1200mmor10each.
Quantitysurveyor(QS)isaprofessionalworkingwithintheconstructionindustryconcernedwithbuildingcosts,intheU.K.andsome
otherareas.AQSemploysstandardmethodsofmeasurementtodevelopabillofquantities.

R
Resourcesarewhatisrequiredtocarryoutaproject'stasks.Theycanbepeople,equipment,facilities,materials,tools,supplies,or
anythingelsecapableofdefinitionrequiredforthecompletionofaprojectactivity.

S
Scheduleofvaluesisadetailedstatementfurnishedbyaconstructioncontractor,builderorothersoutliningtheportionsofthecontract
sum.Itallocatesvaluesforthevariouspartsoftheworkandisalsousedasthebasisforsubmittingandreviewingprogresspayments.
Scopeofaprojectinprojectmanagementisthesumtotalofallofitsproductsandtheirrequirementsorfeatures.
Specificationanexplicitsetofrequirementstobesatisfiedbyamaterial,product,orservice.
Subcontractorisanindividualorinmanycasesabusinessthatsignsacontracttoperformpartoralloftheobligationsofanother's
contract.
SupplierAdistributororothercompanywhichsuppliesmaterials,parts,equipment,etc.

T
Takeofftheprocessofreviewingandunderstandingthedesignpackageandusingtheprojectscopedrawingsanddocumentsto
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itemizethescopeintolineitemswithmeasuredquantities.RSMeansreferstothisas,"Scopeouttheproject,"and,"Quantify."[18]
Taskadistinctpieceofworkperformed.
Toolanyphysicalitemthatcanbeusedtoachieveagoal,especiallyiftheitemisnotconsumedintheprocess.

U
UnitCostthecostforonemeasuredunitofcompletedworkactivity.

V
VirtualDesignandConstruction(VDC)istheuseofintegratedmultidisciplinaryperformancemodelsofdesignconstruction
projects,includingtheProduct(i.e.,facilities),WorkProcessesandOrganizationofthedesignconstructionoperationteaminorderto
supportexplicitandpublicbusinessobjectives.InVDC(BIMisonemethod)themodelingconsistsoftheusualthreedimensions,plus
thetimedimensionandthecostdimension.

W
Work(1)istheamountofeffortappliedtoproduceadeliverableortoaccomplishatask,(2)iseverythingrequiredorsuppliedto
completeaconstructionproject.
Workbreakdownstructure(WBS)adeliverableorienteddecompositionofaprojectintosmallercomponents.Itdefinesandgroups
aproject'sdiscreteworkelementsinawaythathelpsorganizeanddefinethetotalworkscopeoftheproject.
Workerapersonengagedintheaccomplishmentofwork.Incostestimating,thehandsonworkerscontributetotheproductionand
arecountedincalculationsoftheproductionrate.Otherworkerssuperviseorsupportthehandsonworkinsomeway.
WagerateTheagreedmonetarycompensationperhourforapersontoaccomplishwork.Thisisthepayprovidedtotheworker,
excludinganyfringebenefitsorotherlaborburdens.Laborunionstypicallyhavenegotiatedagreementswhichdefinethewageratesfor
workers,aswellastheratesforfringebenefits.

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References
1. 10s90CostEngineeringTerminology.AACEInternational.2010.p.5.
2. 10s90CostEngineeringTerminology.AACEInternational.2010.p.5.
3. StandardEstimatingPracticeSixthEditionAmericalSocietyofProfessionalEstimators.BNIBuildingNews.2004.pp.121134.ISBN155701481
7.
4. Waier,Philip(2013).BuildingConstructionCostData(71stannualed.).RSMeans.p.730.ISBN9781936335565.
5. StandardEstimatingPracticeSixthEditionAmericalSocietyofProfessionalEstimators.BNIBuildingNews.2004.p.23.ISBN1557014817.
6. Jelen&Black(1983).CostandOptimizationEngineeringSecondEdition.McGrawHillBookCompany.p.334.ISBN0070323313.
7. Waier,Philip(2013).BuildingConstructionCostData(71stannualed.).RSMeans.p.729.ISBN9781936335565.
8. PhilipR.Waier,PE,etal(2012).BuildingConstructionCostData(70thannualed.).RSMeans.p.vii.ISBN9781936335299.
9. 10s90CostEngineeringTerminology.AACEInternational.2010.p.27.
10. 10s90CostEngineeringTerminology.AACEInternational.2010.p.36.
11. MasterFormat2010UpdateMasterListofNumbersandTitlesfortheConstructionIndustry.TheconstructionSpecificationsInstitute,Construction
SpecificationsCanada.2010.pp.4361.ISBN9780984535705.
12. 10s90CostEngineeringTerminology.AACEInternational.2010.p.59.
13. 10s90CostEngineeringTerminology.AACEInternational.2010.p.75.
14. 10s90CostEngineeringTerminology.AACEInternational.2010.p.76.
15. Waier,Philip(2013).BuildingConstructionCostData(71stannualed.).RSMeans.p.5.ISBN9781936335565.
16. 10s90CostEngineeringTerminology.AACEInternational.2010.p.53.
17. ProjectManagementInstitute(2004).AGuidetotheProjectManagementBodyofKnowledge:PMBOKGuide(3rded.).NewtownSquare,
Pennsylvania:ProjectManagementInstitute.p.5.
18. PhilipR.Waier,PE,etal(2012).BuildingConstructionCostData(70thannualed.).RSMeans.p.vii.ISBN9781936335299.

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