Construction Cost Estimates and Estimating Cost of

Construction Projects
Construction cost estimates is the forecast of cost of construction of a
project. Estimating cost of construction projects is the first step for any
project management. In any construction activity, two basic things are
involved, namely, the quantity aspect and the quality aspect.

The quantity aspect is governed by the study and analysis of drawings

which are prepared with respect to the design of the project. The quantity
aspect covers the quantum of works involved in and estimation of the
materials and labours required for construction. The quality aspect is governed
by the specifications for the materials and workmanship.
These two aspects lead to an estimate for a work or a project. Thus an estimate is a tool
for planning and controlling the construction activities of any project with regard to
quality, quantity, time and costs.

An estimate of a project is a forecast of its probable cost for the due fulfillment of the
project objectives, to the prescribed workmanship covered by specifications for various
items of works and to the stipulated time schedule. For a given project fully described
 by drawings and specifications, estimating involves quantity take off for various items
of work, rate analysis and costing.
Preliminary and Detailed Construction Cost Estimates
In general, construction cost estimates can be broadly divided into two
categories- detailed and approximate or preliminary. Strictly speaking, all
estimates are more or less approximate as the very name implies, and
the actual cost of construction would only be known when a work has
been completed in all respects and all costs allocated.

However, a detailed construction cost estimates are prepared on the basis

of detailed drawings supported by specifications in accordance with
established norms of measurements using unit of costs for the different
items of work arrived at by rate analysis.

Thus, a detailed cost estimate gives a realistic estimate of final cost and is
generally required for obtaining sanction/approval of sponsor of the
project or competent authority in respect of public bodies like govt.
organizations. It is also used in the course of the execution of the work to
control progress and costs.

The detailed Cost Estimates Comprises

1. The direct cost of various items of work;
2. Provision for contingencies;
3. Direct supervision charges
4. Miscellaneous costs such as service charges for water supply connection,
sanitary arrangements and electric supply;
5. Labour hutments and camps, field office, etc.

Preliminary Construction Cost Estimates

An approximate or preliminary estimate, or an abstract estimate as it is
sometimes referred to, is prepared before a detailed estimate is taken in
hands for one of the following reasons:

1. To obtain a rough idea of the cost as part of a preliminary study for

feasibility.
2. To rank competing projects for allocation of funds, cost-wise, as part of
an investment decision exercise.
3. To make advance arrangements for public utility projects.
4. To fix premia for insurance against risks etc.

In such cases, the cost involved in preparing a detailed estimate may not
be justified or the time involved would be substantial or data may not be
available or preparation of a detailed estimate may not be otherwise
justified.

The approximate costs are prepared based on unit costs of major sub-
works established by a survey of costs of similar completed sub-works.
The unit costs are updated using cost indices published by govt. bodies or
reputed bureaus. For instance, the Central Public Works Department have
prescribed cost indices for various cities based on 100 for a particular
base year for buildings. The actual costs are known for a particular year
from records, then the current costs would be determined using the
appropriate indices.

Examples of Preliminary Construction Cost Estimation

Some normal practices employed for preliminary cost estimates are given
below:

Project Cost Estimation based on Unit Costs

Example 1:
Cost of construction of a classroom US $2000

Total number of classroom planned 12

Therefore, Cost of primary school building -$24000/-

Example 2:
Cost of one furnished room in a 3-star hotel- Rs. 3 Lakhs

Total number of rooms 100

Cost of hotel Rs.3 crore

ii) Cost Estimate for Buildings based on Area of Construction

Example:
 Cost of hospital, fully equipped per square feet of floor area- US $100

Total floor area 30000 square feet

Cost of hospital $100 x 30000 = $3000000 = USD 3 Millions

iii) Cost Estimates of Bridges based on Estimated Quantities

Example:

Cost of a 30m railway B.G. girder bridge (2 panels)- steel work

Steel work weight= 602= 120 tonnes

Cost of supply, fabrication and erection per tonne- US $300

Cost of steel work $300 x 120 = $36000.

Construction Quantity takeoff

Different countries follow different procedures for taking out quantities.
The processes generally involved in construction quantity takeoffs are:
Taking-off quantities
Grouping, and
Billing

The takeoff and grouping are carried out on the quantity sheet. The
measurements are recorded item wise and the items are arranged in the
sequence of execution.

A typical quantity sheet will be as under:

Description of Unit of
S.No. Number L B H Quantity Total
item of work measurement

Billing is done in an abstract form known as Bill of Quantities (BOQ) where

costing is done. A typical bill of quantities will be as under:
Description
Measurement
S.No. of item Quantities Rate Amount
unit
work
Units of Measurements of Various Construction Works
The unit of measurement of a particular work of construction activity
depends upon its nature, size and shape. The general principles for
selection of measurement unit of construction works are as follows:

(i) Massive, voluminous, bulky items measured in volumes as cubical

contents.

Example- foundation concrete, brickwork masonry.

(ii) Thin, surface oriented items with large superficial areas measured in
terms of area

Example: tile roofing, mosaic tile flooring.

(iii) Items which are long, narrow and thin, having dimensions in other
perpendicular directions difficult of measurement, measured in linear
units (i.e. per unit length)

Example: hand railing

(iv) Items which are difficult of measurement and which are distinct units,
measured in units (i.e. per number)

Example: supply and fixing wash basin

(v) Items which are heavy and are generally difficult of measurement in
terms of linear dimensions, measured by weight.

Example: Steelwork

General Rules for Measurement of Construction

Works
(i) The description of items should be self-contained and self explanatory
and should include all materials, labour, transport, cost of tools and plant,
formwork, etc.
(ii) The dimensions should be entered in the order of length, breadth, and
depth or height or thickness.

(iii) The measurement for the same item of works under differing
conditions should be entered separately, bringing out clearly the
differences in the descriptions.

(iv) The measurement should be for finished items of work.

(v) The method of measurement should be consistent and should reflect

the special provisions, if any, in the specifications.

(vi) The nomenclature of an item of work should be such as to bring out

any special features involved in the execution of work and establish a link
with the specifications.

Degree of Accuracy
The degree of accuracy of measurements would depend on the unit of
measurement and rate for a particular item.

Rate Analysis of Construction Works

The process of determining the rate of an item is termed as rate analysis.
A rate analysis should take into account:

i) Materials incorporated in the works

ii) Direct labour required for the output

iii) Incidence of costs of tools, plant, machinery, ancillary requirements

such as formwork, etc.

iv) Direct overhead such as contractors site supervision

v) Costs arising out of site conditions

vi) Costs arising out of requirements of specifications (example- curing of

concrete)
vii) Contractors profile and overheads.