EstimatingProcess

Agenda
Definitionofestimating Whatisestimatinginconstruction? Costvariableinconstruction Typesofestimates Conceptualestimate Detailedestimate AvoidingErrorsinEstimates

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

TYPESOFESTIMATES

TYPESOFESTIMATES
Type Conceptual When? Priortothecommencementof design How? Arepresentativeunitismultiplied byapriceperunittoobtainagross estimate( 10%accuracy)ofthe facilitycost. Bythearchitector architect/engineertoreflect expectedcostsbasedonmore definitivedata. Totaljobcostminusmarkup Shouldachieveapproximately 3%accuracy. Onthebasisofthebidding documents, Includeamarkupforprofit.

Preliminary

40%completionofthetotal design

Engineer

Detaildesignisaccomplished

Bid

Biddingphase

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. CostCapacityformulaisoftheform:
x 0.37

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

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

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 Use 5-10% waste factor
CE321 ConstructionManagement

Slab on grade Columns Beams Slabs Retaining Structures Stairs & Landings

FoundationDetails

CE321 ConstructionManagement

ASTMStandardReinforcingBars
Soft Metric Size
10 13 16 19 22 25 29 32 36 43 57

Nom Diam mm
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

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

71 129 199 284 387 510 645 819 1006 1452 2581

CE321 ConstructionManagement

Bar Size 6 8 10 12 14 16 20 25 28 32 40 50

(kg/m) 0.222 0.395 0.617 0.888 1.21 1.58 2.47 3.85 4.83 6.31 9.86 15.4

Area (mm) 28.3 50.3 78.5 113 154 201 314 491 616 804 1257 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