News

photo

The Estimating Process; Get it Right!

0

The estimating process begins with a thorough understanding (and visualization) of the project's scope of work. Architects and engineers define scope in plans and specifications, but for construction estimating, this scope is incomplete. Successful "hard bid" contractors know very well that scoping construction goes well beyond the Architect/Engineer scope and must include field-specific scope. The realities of the jobsite, such as weather, ongoing operations, soils conditions, access/egress, security, safety, site layout, environment protection and other context scope must be considered, as well as the means and methods by which the work will be executed. These all impact the overall cost of the project.

A big part of the estimating process is mentally building the project multiple times in your mind before the actual project even breaks ground. Scoping construction requires a knowledge of the construction processes, thinking like a contractor, and building the project in your head before the project is actually built. Some of the best estimators I know are those who come from the field and understand that estimating is NOT just about unit costing, but more about the impact that Architects, Engineers, context and execution scope have on each unit cost.

Quantifying the project is the next step in the estimating process. The take-off is just another opportunity for things to go wrong. Converting scope to quantities requires a solid understanding of math, drawing scales, swell and waste factors, plan reading, common construction practices, and conversion factors. Indeed, an accurate quantity take-off representing the complete scope of work then becomes the solid foundation to which unit prices are applied.

The third step in the estimating process is the application of unit costs to the quantified scope of work. Competitive bidding contractors will get their unit costs from subcontractors, vendors, suppliers, and their own cost records. These are excellent resources for pricing, but typically they are not readily available to budgetary estimators such as architects and engineers. Budgetary estimators get their unit costs from some of the above sources, but also from published national average cost data.

Just "knowing" a construction cost database does NOT an estimator make. Pricing a project goes well beyond cost data books. In pricing a project, the aggregate project total is more than just the summation of unit material, labor and equipment. but It must also include labor burden requirements, such as Social Security contributions by the contractor, unemployment taxes, insurance, subcontractor costs (including their overhead and profit), sales taxes, bonds and, finally, the general contractor's overhead and profit.

Typically, the published unit costs do not include all the above; each reference construction cost database handles these components differently. Pricing must be comprehensive and include all the direct and indirect costs associated with the project AND the cost of being in business as a contractor.

The final step in the cost estimating process is to double check the results. It’s is good practice to set the cost estimate up against historical project costs, another estimator's review, or comparable costs per unit floor area or assemblies costs. It’s is very easy to go through a project scoping, quantifying and pricing and still miss a costly component.

In a rush to meet a deadline once I missed the landscaping in the back parking area, and did not catch this until a final review of the estimate...oops! Even this engineer periodically gets lost in the details, and has missed pieces of scope before; please keep this between the two of us!

Rory Woolsey has worked in Management and Engineering for the construction industry for 33 years, starting as a construction laborer in Billings, Montana, in 1972. He has since held positions as a field engineer, project manager, MIS manager, testing laboratory manager, estimator, senior editor, designer, structural engineer, and general contractor.  He is currently the President of The Wool-Zee Company, Inc., construction consultants.

Mr. Woolsey has also held positions with some of the leaders in the construction industry, such as Bechtel, H.J. Kaiser Constructors, and the R.S. Means Company, and has worked on projects ranging from heavy, military, industrial, commercial and residential.

He has given over 7,000 classroom hours of instruction nationally to architects, engineers, contractors, and facility managers on topics of project management, CPM scheduling, construction estimating, facility maintenance, partnering, and leadership.

This article was taken from a post on his blog: woolseyestimating.blogspot.com

Tags: Costs, Estimating Construction



Leave A Reply