13

TIPS FOR ACCURATE

CONSTRUCTION
PROJECT ESTIMATES
Getting an accurate project estimate can be one of the toughest
challenges in the construction process. Estimate too high and the
opportunity may go to someone else. Get the estimate too low,
secure a contract, and you’ll wish it went to someone else!
These 13 tips should be your go-to reference to help you get
the accurate estimates you need.

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Make Sure You Are Detailed and

Precise in the Take-Off Process
You can’t estimate or make decisions
on what you don’t know.

Beware Unit Cost

Estimating Guides
2
Estimating based on unit cost or order of
magnitude per square foot is a bad
choice for accurate estimating due to the
many variables specific to your project.

Use a Master Checklist

Use a master checklist to make sure you don’t
forget necessary steps and items like permits,
temporary utilities, dumping fees, landscaping,
hardscaping, etc.

The folks at www.buildingadvisor.com

have a free worksheet that includes formulas
to help you in your estimating process.
Or, consider using professional construction
bid software that puts all the information
in one place and allows you to track
costs as you go. Such softwares also make it
possible to share and gather information in the
cloud on all of your mobile devices like tablets
and even cell phones.

Provide Extreme Detail

Where You Have Expertise,
and, More Importantly,
Where You Don’t
Apply the same level of detail in task isolation,
labor, and material needs on those areas where
you don’t have expertise. Don’t hesitate to call
specific subcontractors or consultants to help
out on areas that require another set of eyes.

Determine an Accurate Hourly

Rate for Specialty Labor
Specialty labor, or craftsmen, must include normal wages and
benefits, but must also factor in insurance and federal and state
payroll costs. Be sure to take all of this into account when
establishing their hourly rate.

Define the Project Risks

and Factor in Their Costs
Start by looking at your previous projects
and what unknowns occurred during
preconstruction and estimating that became
margin killers during the project.

Use this knowledge as a guide when creating

estimates for future projects. This is an area where
cost estimating software can help you immensely.

Understand Products,
Materials Pricing, and
Fluctuations
You know prices change, so pay close
attention to factors that can affect pricing
when estimating costs. Everything from
natural disasters and politics to custom
orders and delivery challenges
can alter final prices.

View Your Project

by Cost Centers
What portions of your project are
contributing the highest percentage
of overall project costs? Spend your
time in these areas, ensuring precise
definition of the scope, tasks, labor
and materials needs.

Account for Project

Support and
Operations Costs
Whether you’re an owner or a general
contractor, there are costs related to your
project that fall outside of direct labor and
material costs. Examples can include land
entitlement and acquisition costs, legal
services, state and federal zoning issues,
job site offices, shipping, and storage.

10

Accurately Determine
Equipment Needs
Make sure you have the equipment capacity
that is matched to your project. Also make
sure equipment that is interfacing with other
equipment is the correct size, offers the
appropriate capabilities, and is not redundant.
And, don’t rule out renting equipment and
small tools. It may be more cost effective to do
so than the maintenance on your own
equipment. Just don't forget to confirm with
your subcontractors on whether their estimate
includes rental equipment and small tools, or if
they are planning to use their own.

11

Check Your Subcontractor Quotes

Go through the same steps in evaluating potential subcontractors’ quotes as

you do evaluating your own quotes. Always compare more than one
subcontractor for each specific scope of work on a labor and material basis.
And, never accept a cost-plus bid. Find a subcontractor who will provide you a
firm estimate based on project scope. Take the additional time to review a
subcontractor’s qualifications and assumptions to ensure there are no hidden
costs that could potentially erode your margin.

12

Only Bid on Jobs with the

Highest Chance of Success
How can you know what jobs have the highest chances of success?
If you aren’t already, start keeping track now of your project
estimates, the outcomes, and the contacts you made for each
opportunity. Negotiating directly with the owner is always a good
bet. When given the chance to negotiate a project opportunity, your
chances of either overestimating or underestimating go way down.
And, never underestimate the power of an existing relationship!

13

Check with Your Material

Supplier for Insight
Having the right materials for the right job
is critical to both your and your supplier’s
success. Reach out to your material supplier
for insight. They know their products best
and can often give a detailed perspective into
what materials would be good for your
project, which ones perform well together,
and what is best within your budget.

And, try thinking about specific product

selection early during the design phase.
Material suppliers can provide some early
advanced cost savings which reduce time
and money on constructability issues that
could help on bid day.