Estimation and Costing

ESTIMATION, COSTING AND SPECIFICATION
HASHIM K ABDUL AZEEZ

KMEA
Module 1
• Introduction, Types of estimates, detailed estimate, revised
estimate, supplementary estimate, maintenance estimate,
approximate estimate.
• Explanation of terms- Contingencies, work charged
establishments, provisional sum, lump sum item.
• Introduction to plinth area method, cubic rate method, unit
rate method and bay method.
Estimation, costing and specification

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Tri Angle Design Studio
Introduction
• One of the first questions asked by a client who wants a building
or structure erected is ‘How much will it cost?’
• If the client is wise, the next question will be ‘How accurate is
this figure?’
• The purpose of a pre-tender estimate is to provide an indication
of the probable costs of construction.
• This will be an important factor to consider in the client’s overall
strategy of the decision to build.
• The estimate will also provide the basis for his budgeting and
control of the construction costs.
• During the project’s development and construction phases this
estimate may be reviewed and revised many times.
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Introduction
• Perhaps the single most important criterion of the estimate is its
accuracy.
• An early price estimate which is too high may discourage the
client from proceeding further with the scheme, and so the
potential commission is lost.
• Alternatively, if the estimate is too low, it may result in an
abortive design, dissatisfaction on the part of the client or even
litigation.
• It should be accepted, however, that early price estimates are an
approximation and will therefore include some amount of
uncertainty.

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Introduction
• Since estimating the costs of construction is a probabilistic
activity, preference should be given to offering a range of
estimated sums rather than a single amount.
• Alternatively, if a single sum is desirable then confidence limits
should also be given to provide an indication of its reliability

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Definition of Estimate
• In construction activity, the two fundamental things involved are
Quantity and Quality aspect.
• Quantity aspects is governed by the study and analysis of
drawings which are designed in respect to the design of the
project.
• Quality aspect is governed through specifications for materials
and workmanship. Hence it decides the quantum of work
involved in the construction and it helps in finding out the
quantities of various material required as well as the labour
required.
• These two aspects governs the estimate of work.

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Definition of Estimate
• Estimate is a tool for planning and
controlling the construction activity
of any project with respect to the
quality, time and finance.
• An estimate is a forecast of its
probable cost.

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Purpose of Estimate
• To ascertain the amount of money required by the owner to
complete the proposed work.
• For public construction works, estimates are required in order to
obtain administrative approval, allotment of funds and technical
sanction.
• To ascertain quantities of materials required in order program
their timely procurement.
• To calculate the number of different categories of workers that
are to be employed to complete the work within the scheduled
time of completion.
• To assess the requirements of tools, plants and equipment
required to complete the work according to the program.
• To invite tenders and prepare bills for payment.
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Uses of an Estimate
For proposed project
 To ascertain the probable time for contract
 To control expenditure during execution
 To estimate requirements of any controlled materials like cement
and steel
 To frame tender document and arrange for the contract
 To manage the finance of the project
 To invite tenders and prepare bills for payment.
 To obtain administrative approval and technical sanction for the
project.
 To prepare bills for interim and final payments

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Uses of an Estimate
For proposed project
 To prepare construction schedules and program.
 To justify the investment
 To select most remunerative or economical alternative
 To work out material and labour requirements etc

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Uses of an Estimate
For Existing structures
 To advice the client for the fixation of standard rent
 To furnish justification for claim in the arbitration proceedings
 To prepare tax schedules
 To value the property for sale, government taxes, purchase,
mortgage, fire or other insurance etc.

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TYPES OF ESTIMATE
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Types of Estimate
 Preliminary or approximate or rough estimate
 Quantity estimate or quantity survey
 Detailed estimate
 Revised estimate
 Supplementary estimate
 Annual maintenance or repair estimate

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Types of Estimate
Preliminary or approximate or rough estimate
• Approximate estimate is to find out an approximate cost in a short
time and thus enables the authority concerned to consider the
financial aspect of the scheme.
• It is framed after knowing the rate of similar works and from
practical knowledge in various ways for various types of works.
• Preliminary Estimate is prepared by various ways for different
structures as :
 Buildings
 Per Unit Basis – Per student for schools and hostels, per class
room for schools, per bed for hospitals, per seat for cinema and
theatre halls, per tenement for residential buildings.
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Types of Estimate
 Plinth area basis
 Cubic content basis
 Appx. Quantity method
 Roads and Highways – Per km basis depending upon nature of
road, width and thickness of metalling.
 Irrigation Channels
 Per km basis
 Per hectare basis (Area of land commanded)

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Types of Estimate
 Bridges and Culverts
 Per running meter of span depending upon type of structure, type
and depth of foundation.
 Sewerage and Water Supply Project
 Per head of population served
 Per hectare basis (Area covered)
 Over Head water Tank
 Per liter or per gallon of tank depending upon type of structure
and height of tank.

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Types of Estimate
Quantity estimate or Quantity survey
• A complete estimate or list of quantities for all items of work
required to complete the concerned project.
• In this type of estimate only bills of quantities are prepared for all
necessary items and when they are priced, gives the complete
estimate of the project.

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Types of Estimate
Detailed estimate
• Includes the detailed particulars, rates and costs of all the items
involved for satisfactory completion of a project.
• The best and most accurate estimate
• They are mainly prepared for
i. Execution process and
ii. Obtaining technical sanction

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Types of Estimate
Detailed estimate
• The preparation of detailed estimate consists of working out
quantities of various items of work and then determine the cost
each item.
• This prepared in two stages:
 Quantity Estimate and Rate Analysis
 Abstract of Estimated cost

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Types of Estimate
Detailed estimate - Quantity Estimate
• The complete work is divided into various items of work, such as
 Earthwork Excavation
 RCC Work
 Block Work
 Plastering etc.,
• The details of measurements are taken from drawings and entered
in respective columns of prescribed pro forma.
• The quantities are calculated by multiplying the values that are in
numbers columns to Depth columns

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Types of Estimate
Detailed estimate - Quantity Estimate

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Types of Estimate
Detailed estimate - Abstract of estimated cost

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Types of Estimate
Detailed estimate
• It comprises of
a. Report
b. Specifications
c. Detailed drawings showing plans, different sections, key or
index plan etc.
d. Design data and calculations
e. Basis of rates adopted in the estimate.

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Types of Estimate
Revised estimate
• A detailed estimate for the revised quantities
• It is accompanied with a comparative statement abstract from
showing the probable variations for the quantity, rate and amount
of each item of work of the project as compared with the original
estimate side by side stating the reasons of variations.

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Types of Estimate
Supplementary estimate
• Some times some changes or additional works due to material
deviation of a structural nature from the originally approved
design may be thought necessary when the work is in progress.
• For all such items, a detailed estimate is prepared, which is known
as a supplementary estimate.

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Types of Estimate
Annual maintenance or repair estimate
• After completion of a work it is necessary to maintain the proper
functioning.
• An estimate is prepared for the items which require renewal,
replacement, repairs etc. in the form of a detailed estimate.

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TERMINOLOGY IN ESTIMATE

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Terminology in Estimate
Lump Sum
• While preparing an estimate, it is not possible to workout in detail
incase of petty items. Items other than civil engineering such
items are called Lump sum items or simply L.S. items.
• The following are some of L.S. items in the estimate:
1. Water supply and sanitary arrangements.
2. Electrical installations like meter, motor, etc.,
3. Architectural features.
4. Contingencies and unforeseen items.
• In general, certain percentage on the cost of estimation is allotted
for the above L.S. items.
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Contingencies
• Indicates incidental expenses of miscellaneous character which
cannot be classified under any distinct item. (3% to 5% of the
estimated cost is provided to allow for contingencies)
Work-charged Establishment
• During the construction of a project considerable number of
skilled supervisors, work assistance, watch men etc., are employed
on temporary basis.
• The salaries of these persons are drawn from the L.S. amount
allotted towards the work charged establishment.
• That is, establishment which is charged directly to work. An L.S.
amount of 1.5 to 2% of the estimated cost is provided towards the
work charged establishment.
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Tools and Plants
• Normally contractor has to arrange tools and plants. (1% to 1.5%
of estimated cost is provided)
Centage charges or Departmental charges
• Also known as Supervision charges for works. To meet the
expenses of establishment, designing, planning, supervision etc.
(10% to 15% of the estimated cost). When engineering
department takes up work of other department.
Sub-Head items of work
• Works like earthwork, concrete work, brick work etc. Under each
sub head there are different items of work.

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Sub-Work
• Large project may consist of small buildings. Detailed estimate of
each sub-work is prepared separately.
Schedule of Rates
• It is a list of rate of various items of works maintained by
engineering department under the name “Schedule of Rates
Book”. “Road Metal Rate Book” is also maintained by PWD.
Administrative Sanction/ Approval
• It is the formal acceptance by the department concerned of the
proposal. After the approval, design, estimates etc. are prepared
and thereafter execution of work.

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APPROXIMATE ESTIMATE

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Approximate Estimate
• Approximate estimate is worked out for
 Preliminary studies – it helps in earlier decision making. It gives
fairly good idea of the project and also saves a good deal of labour
and time required for preparing detailed estimate.
 Investment – it helps in the feasibility study. The probable net
return after the completion of a commercial project can be
worked out and with approximate estimate , justification on
investment can be made.
 Financial aspect – it gives fairly good idea regarding the
approximate cost of construction and suitable arrangements can
be made prior to the commencement of construction work.
 Tax schedules
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Insurance Estimation, costing and specification
33
• Approximate estimate is worked out for
 Tax schedules – For public utility projects, it can be used for
working out of tax schedules.
 Insurance – it is used for fixing up the value of the project for the
insurance requirements.

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General Principles
• The general principle of working out Approximate estimate is that
multiplying the number of items or units in the proposed structure
by the known cost of a similar item or unit in a similar existing
structure.
• It involves two operations.
 Fix up the unit and count the number of such units in the
proposed work.
 Fix up the unit cost by studying the actual cost of similar existing
structure constructed in near past.

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 Plinth area method
 Cubic rate method
 Unit rate method
 Bay method

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Plinth area method
• In Plinth area method or Square meter method, area of each floor in
the proposed building is worked out in square meters.
(Approximate cost of = (Total area of x (Cost per square meter
proposed building) all the floors) of a similar existing building)
• For computing plinth area the measurements are taken out to out of
walls and no deductions are made for each items such as stairways
and other ducts unless their areas are more than 2 m2
• Factors affecting the accuracy of plinth area method
 Change of price level.
 Ceiling height.
 Type of construction – Framed or Load bearing, Finishes.
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Plinth area method
 Shape of building – Rectangular or square or other shapes.
 Spacing of columns.
 Large openings.
 Location of buildings
 Nature of soil
 Number of floors
 Use of buildings
 Situation of buildings – buildings with frontage on main or narrow
road

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Plinth area method- Problems
Example : Prepare an approximate estimate of building project with
total plinth area of all building is 800 sqm. and from following data.
i) Plinth area rate Rs. 4500 per sqm
ii) Cost of water supply @7½%of cost of building.
iii) Cost of Sanitary andElectrical installations each @ 15% of cost of
building.
iv) Cost of architectural features @1% of building cost.
v) Cost of roads and lawns @5% of building cost.
vi) Cost of P.S. and contingencies @4% of building cost.
Determine the total cost of building project.

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Solution
Data given:
Plinth area = 800m2.
Plinth area rate = Rs. 4500 per Sqm.
∴ Cost of building = 800 x 4500 = Rs. 36,00,000
Add the cost of the water supply charges @7½% =
(36,00,000 x 7.5)/100 = Rs. 2,70000
Add the Cost of Sanitary and electrical installation @ 15% =
36,00,000 x 15/100 = 5,40,000
Add the cost of architectural features @1% =
36,00,000 x 1/100 = 36,000
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Solution
Add the cost of Roads Lawns @ 5%=
36,00,000 x 5/100 = 1,80,000
Add the Cost of contingencies @ 4%
36,00,000 x 4/100 = 1,44,000
Total Rs. 47,70,000
Assume Add supervision charges 8% on overall cost
47,70,000 x 8/100 = 3,81,600
Grand Total Rs. 51,51,600

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Cubic – metre method
• The cost per cubic meter is used .
(Approximate cost of = (Total cubical x (Cost per cubic meter
proposed building) contents) of a similar existing building)
• The measurements are taken as in the plinth area method and then
it is multiplied by height of floor.
• All the factors affecting the plinth area method, except the height of
the building affects this method.

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Service Unit or Unit rate method
• Service unit indicates the most important unit in a structure.
• For a school it will be classroom, for hospital it will be bed , water
tank it will be a litre, in cinema hall it will be seat
(Approximate cost of = (No. of service units x (Cost per service unit
proposed building) in a structure) of a similar existing building)
• The estimates may vary considerably according to the types of
construction and standards of finish
• The proposed structure should ressemble the existing structure
practically in all aspects .
• The change of price level of different items of construction should
be taken into account.
• It take least time to work out the estimate.
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Typical bay method
• Useful in case of buildings which has several similar bays.
• A bay is a space from center to center of two successive columns.
(Approximate cost of = (No. of bays ) x (Cost of one bay)
proposed building) in the proposed building)
• Necessary correction should be made or the end bay due to end
walls and also in other bays, if there is any difference in framing.
• Useful for factories and such similar structures.
• More time required but reliable than other methods.

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Assignment- Theory
• Write short notes on by referring any std. book on Estimation.
( Mention the book referred)
 Detailed estimate
 Revised estimate
 Supplementary estimate
 Maintenance estimate
 Approximate estimate.
 Contingencies
 Work charged establishments
 Provisional sum
 Lump sum item.
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Assignment- Theory
• Write short notes on by referring any std. book on Estimation.
(Mention the book referred). Write advantageous and
disadvantageous of these methods.
 Plinth area method.
 Cubic rate method .
 Unit rate method
 Bay method.

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ESTIMATION, COSTING AND SPECIFICATION

HASHIM K ABDUL AZEEZ

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Grand Total Rs. 51,51,600

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

Estimation, costing and specification

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