Construction Cost Estimating – Everything You Need to Know?

Construction cost estimating is very important to get an idea of the amount of money needed for the development of a project. It is the duty of cost estimator that they have to outline the entire cost estimation to tell the owner about the cost of the overall project. With the cost, the homeowners can easily know about the scope of the project and other important details. Furthermore, construction contractors will outline the construction bid. According to the US Department of Labor Bureau Labor Statistics, there are a total of 198,000 estimators working in the United States.

In the following blog, we will be discussing important information about the cost estimating process. Let’s get started:

Professional Behavior Cost Estimator Should Process

The important behavior that professional cost estimator should process are as follows:

Integrity: It is important for the estimators to use standards of confidentiality during the process.

Ethics: The behavior of the cost estimator should be good. He should have patience and should behave well with the client. He should show high technical and professional discipline.

Attitude: The attitude of the estimators during the cost estimation should be professional and he should provide the work on time.

Judgment: Estimator will obtain this skill with the help of proper training and years of experience. Sound judgment and common sense should be used when doing the decision.

Attention to Detail: The estimator should spend a good amount of time going through the details of the project to end up with the right residential or commercial estimate.

Common Practice Traits of Estimator

Some of the common traits that a professional estimator should possess are as follows:

Awareness: The estimator should be properly aware of the project scope. He should know what level of effort and resources are required to complete the project. He should have knowledge of all the aspects and every detail of the project. An estimator should do the following things:

  • Keep track of the time allotted for the project.
  • Analyze the special or general condition of the contract and what effect this requirement will have on the indirect costs.
  • Do consider the alternate method of construction for the projects.
  • We should review all the drawings, division specifications, project construction ability, and all other relevant details.
  • Inform and communicate with other team members about the problems during the project on time.

Uniformity: The professional construction estimator should follow the proper process to complete all the procedures and requirements of the project.

Consistency: This is important in every work. The same is the case with the cost estimator. He should be consistent in his work to maintain its reputation.

Documentation: Proper documentation is the key to success. All the documents should be arranged well to be used at the right time and delivered to the concerned person.

Accuracy: The method used for the quantity survey should be arranged well so that there should be proof of accuracy for any portion of the survey.

Labor Hours: The estimator should have detailed information about the labor hours needed to complete the work.

Evaluation: When the bid is involved in the estimation process, then it is best to properly check the bids along with the responsiveness of the project.

Final Summary: Estimator should also provide the proper method of listing and evaluating the indirect costs.

Different Levels of Estimate

Now, we are going to discuss the different levels of estimate during the cost estimation process:

Magnitude of Order (Level 1): This is important to make the budget and feasibility calculation easy.

Conceptual/Schematic Design (Level 2): This is done to give a more comprehensive cost estimate as compared to the budget and feasibility analysis done above.

Design Development (Level 3): Estimation prepared at this level are utilized to verify the budget in term of scope and design is finalized along with the selection of materials.

Documents of Construction (Level 4): At this, the confirmed funds are allocated to again verify the construction cost after the completion of the design.

Bid Phase (Level 5): The primary reason behind this level estimate is to develop a probable cost needed for the preparation and submission of the contract with an owner.

Elements of Cost Estimate

The important element of cost estimates are as follows:

Quantity Takeoff: Successful estimates rely on the reliable amount of quantity takeoff for the materials needed in the project.

Labour Hours: The number of labor hours can be calculated by the crew analysis or applied on a unit man-hour basis.

Labor Rates: This rate is the cost per hour for the craftsmen on a project. For the determination of any craft rate be it union or open shop. The estimator will start the calculation with basic wages and fringe benefits as per the national or local rules.

Prices of Material: The price of material fluctuates on a daily basis. There is no fixed price so it should be calculated accordingly.

Subcontractors Quote: This will include the general estimate, material equipment, labor, profit, and indirect costs.

Equipment Costs: The rate of equipment will be dependent on the project coordination for analyzing the correct size and capacity of the equipment.

Indirect Costs: This will include the cost of materials, equipment, and labor for the entire project.

For the owner it will be land cost, permits, fees, legal fees, and administration costs.

For the subcontractor and contractors, the indirect cost will be on-site job office, temporary construction, temporary heating and cooling, equipment, small tool, consumables, and temporary construction.

Profit Amount: This will include the right or contracted profit rate for all the contractors in contrast to the original bid and change orders.

Conclusion

This was a brief about the cost estimating process. This is definitely a comprehensive process and the major role is played by the estimator to provide the accurate cost. Other than this, the contractors, labor, and sub-contractor do their work to complete the project on time.

Moreover, if you want to get a proper and detailed estimate of your construction and residential projects, then you need to contact a professional estimating company to get the desired results. The professional will be using the advanced software to get an accurate estimate on time.

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