Estimating Process

Agenda

• Definition of estimating
• What is estimating in construction?
• Cost variable in construction
• Types of estimates
• Conceptual estimate
• Detailed estimate
• Avoiding Errors in Estimates
 ESTIMATING CONSTRUCTION COSTS
• The key to a good job and successful cost control
is the development of a good estimate as the
basis for bid submittal.
• Estimating is the process of looking into the
future and trying to predict project costs and
resource requirements.
• To minimize errors, a consistent procedure or set
of steps for preparing an estimate is needed to
minimize errors and achieve reliable results.

TYPES OF ESTIMATES
 TYPES OF ESTIMATES
Type When? How?
A representative unit is multiplied
Prior to the commencement of by a price per unit to obtain a gross
Conceptual
design estimate (± 10% accuracy) of the
facility cost.
By the architect or
40% completion of the total architect/engineer to reflect
Preliminary
design expected costs based on more
definitive data.

• Total job cost minus markup

Engineer Detail design is accomplished • Should achieve approximately
±3% accuracy.

• On the basis of the bidding

documents,
Bidding phase
Bid • Include a markup for profit.

Construction Management, 3/E by Daniel W. Halpin

Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved.
 Construction Management, 3/E by Daniel W. Halpin
Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved.

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, and Desalinization Index DI2005=107, and DI1995=99.
x
C1 ⎛ Q1 ⎞
Cost‐Capacity formula is of the form : = ⎜ ⎟ , where x = cos t − capacity factor (< 1)
C2 ⎜⎝ Q2 ⎟⎠
x
⎛Q ⎞
0.37
⎛ 15 ⎞
C2 = C1 ⎜⎜ 2 ⎟⎟ = 20⎜ ⎟ = 20 • 30.37 = 30 M
⎝ 1⎠
Q ⎝5⎠
C2(now) = 30*107/99 = 32.4M

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
8m high, 2500 m2 for 2.5M, 7 years ago when the cost index was 120. If the
cost index is now 165, what is your cost estimate per cubic meter?

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

 DETAILEDESTIMATE DEVELOPING
STEPS
1.Break the project into cost centers.

2.Estimate the quantities required for cost centers that

represent physical end items (e.g., cubic yards of earth,
lineal feet of pipe, etc.). For physical systems this
pro‐cedure is commonly called quantity takeoff. For those
cost centers that relate to nonphysical items, determine
an appropriate parameter for cost calculation (e.g., the
level of builder's risk insurance required by the contract
or the amounts of the required bonds).

ESTIMATE DEVELOPING STEPS (Cont’d)

3. Price out the quantities determined in step 2 using historical
data, vendor quotations, supplier catalogs, and other pricing
information. Price development for physical work items may
require an analysis of the production rates to be achieved
based on resource analysis. If this analysis is used, the
estimator must:
a. Assume work team composition to include number of
workers (skilled and un‐skilled) and equipment required.
b. On the basis of team composition, estimate an hourly
production rate based on the technology being used.
c. Make an estimate of the efficiency to be achieved on this
job, considering site conditions and other factors.
d. Calculate the effective unit price.
4. Calculate the total price for each cost center.
Typical Estimate
Summary Sheet

QUANTITY TAKEOFF
(SURVEYING)
• The development of the quantities of work to be placed in
appropriate units (e.g., square feet, cubic yards, etc.).
• The procedures employed by the estimator to calculate these
quantities should incorporate steps to minimize errors.
• Five of the most common errors experienced during quantity
takeoff are:

1. Arithmetic: Errors in addition, subtraction, and multiplication

2. Transposition: Mistakes in copying or transferring figures, dimensions,
or quantities
3. Errors of omission: Overlooking items called for or required to
accomplish the work
4. Poor reference: Scaling drawings rather than using the dimensions
indicated
5. Unrealistic waste or loss factor.
 Work Breakdown Structure WBS

Foundation

Excavation Concrete Steel

Project Control 13

Work packages
• A work package is a well‐defined scope of work
that usually terminates in a deliverable product.
• Each package may vary in size but must be a
measurable and controllable unit of work to be
perform.
• It also must be identifiable in a numerical
accounting system in order to permit capture of
both budgeted and actual performance
information.
• A work package is a cost center.
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

CE 321 ‐ Construction Management

Division 3 – Concrete
1. Concrete:
• Plain Concrete
• Reinforced Concrete: Substructure
• Reinforced Concrete: Superstructure
2. Formwork
• Foundations
• Columns
• Beams
• Slabs

3. Reinforcing Steel
CE 321 ‐ Construction Management
 Plain Concrete

• 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 • Slab on grade
• Foundation (Spread, • Columns
Continuous, Raft) • Beams
• Pedestal • Slabs
• Grade Beams • Retaining Structures
• Shear Walls • Stairs & Landings
• Use 5-10% waste factor

CE 321 ‐ Construction Management

Foundation Details

CE 321 ‐ Construction Management

ASTM Standard Reinforcing Bars

Soft Nom Area Weight

Metric Diam mm2 Factors
Size mm kg/m

10 9.5 71 .560
13 12.7 129 .994
16 15.9 199 1.552
19 19.1 284 2.235
22 22.2 387 3.042
25 25.4 510 3.973
29 28.7 645 5.060
32 32.3 819 6.404
36 35.8 1006 7.907
43 43.0 1452 11.384
57 57.3 2581 20.239

CE 321 ‐ Construction Management

Bar Size (kg/m) Area (mm²)

6 0.222 28.3
8 0.395 50.3
10 0.617 78.5
12 0.888 113
14 1.21 154
16 1.58 201
20 2.47 314
25 3.85 491
28 4.83 616
32 6.31 804
40 9.86 1257
50 15.4 1963

CE 321 ‐ Construction Management

 Small Wall Construction

Activity
Material
List
 Unit Price
• If the work is fairly standard, the cost can be calculated
by simply taking dollar per unit cost from company
records and applying this cost with a qualitative
correction factor to the quantity of work to be
performed.
• Unit pricing values are available in many standard
estimating references:
– R. S. Means Company, building Construction Cost Data
– F. R. Walker's The Building Estimator's Reference Book
– The Richardson General Construction Estimating
Standards

Line Item Cost Development

Using R.S. Means
Figure 13.1 (p. 206)
Costs based on a representative unit.
(From Building Construction Cost Data. Copyright Reed
Construction Data, Kingston MA 781‐585‐7880 all rights
reserved.)

Avoiding Errors in Estimates

• The accuracy of an estimate is a measure of
how accurate or correct the numbers in the
estimate are

• The completeness of an estimate is a measure

of whether the bid has all the items needed
for the project without duplicating items
 Avoiding Errors in Estimates
• List Cost Codes

• Spend More Time on Large Costs

• Prepare Detailed Estimates

• Mark Items Counted During the Quantity

Takeoff

Avoiding Errors in Estimates

• Double Check All Takeoffs

• Include Units in Calculations

• Automate with Spreadsheets

• Use Well Tested and Checked Formulas

• Double Check All Calculations

 Avoiding Errors in Estimates
• Perform Calculations in Two Ways

• Drop the Pennies

• Have Someone Review the Estimate

• Review Each Cost Code as a Percentage of the

Total Costs

Avoiding Errors in Estimates

• Check Unit Costs for Each Cost Code

• Compare Costs to another Project

• Allow Plenty of Time

Questions