Estimating Project CostsDefinition of "Estimate"Estimate UsesEstimating Time vs. AccuracyWhat determines an Estimates Accuracy?Estimate ConsiderationsOrder of Magnitude EstimateSquare Foot EstimateAssemblies EstimateUnit Price EstimateThe Estimating ProcessBefore You StartReview Entire ScopeQuantity Take-OffSources of Cost InformationTypes of Costs In a Construction EstimateMaterial PricingLabor PricingIndicesOffice OverheadProfitConstruction Project ManagementConstruction Project ManagementFourth EditionFourth EditionConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights ReservedEstimating Project CostsChapter 9Construction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights ReservedWebster’s Dictionary “To arrive at an often accurate but usually only approximate statement of the cost of a job to be done” Means Illustrated Construction Dictionary “The anticipated cost of materials, labor, equipment, or any combination of these for a proposed construction project” Webster’s Dictionary “An approximation of probable construction costs”The anticipated approximate cost of constructionDefinition of "Estimate"Construction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights ReservedEstimate UsesSupports Owner Decision Making as to Project AffordabilityAssists Designer in making material and design decisions to maximize owner valueA critical tool to define General Contractor and Subcontractor Bid PriceConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights ReservedOrder of MagnitudeSquare Foot or Cubic FootAssemblies or SystemsUnit Price +/- 20%+/- 15%+/- 10%+/- 5% Minutes Hours Days Weeks$2,000,000 Construction ProjectEstimating Time vs. AccuracyConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights ReservedWhat determines an Estimates Accuracy?Good Scope (Program) definitionAdequate preparation timeGood/reliable cost informationEstimator skill and methodology employedIs Estimating an Art or a Science?Construction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights ReservedEstimate ConsiderationsProject Size (Learning Curves)Project Quality Project LocationWhen will construction begin and how much time is allocated to buildMarket ConditionsConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved Order of Magnitude Estimate Used for initial project planning Based upon historic data cost per bed cost per room Within + or - 20% accuracyConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved Square Foot EstimateBased upon building useUsed when only approximate size and basic parameters are knownWithin + or - 15% accuracyConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved Assemblies EstimateDesign development stageGroups of individual items combined into a convenient unit of measureWithin + or - 10% accuracyConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved Unit Price EstimateRequires working drawings and specificationsCan be done at various stages of drawings and specificationsWithin + or - 5% accuracyConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved The Estimating Process1. Project Initiation10. Estimate Issue & Filing2. Scope DefinitionNon-technicalEstimatingStepsEnd3. Pre-EstimatePlanning9. ManagementReview4. QuantityTake-Offs & Item DescriptionsTechnicalEstimatingSteps5. Data Sources &Costing8. Documentation& Checking7. Summary & Cover Sheets11. Cost Feedback & Continual Improvement6. DirectCostTotalsStart/EndActivityLegend:Construction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved Before You StartPlans and SpecificationsCheck Instructions to BiddersSpecification AnalysisGeneral Content of DrawingsSubcontractors and VendorsSite VisitsConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved Review Entire ScopeAE Scope: defined by architect/engineer in plans and specificationsContext Scope: defined by the context or environment in which the project will be builtProcess Scope: defined by the processes necessary to construct the project in the contextConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved Quantity Take-OffUse pre-printed formsUse pencilUse highlightersAbbreviateConvert dimensions to decimalsUse the specificationsUse dimensions, not scalesAvoid rounding until final tabulationsUse calculations as many times as possibleMake a parameter sheetKeep a phone logConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved Current Records Subcontractor Quotations Vendor Quotations Published Cost Data Old Estimates Experience Sources of Cost InformationConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights Reserved Direct CostsMaterials (Including Sales Tax)LaborEquipmentSubcontractsProject Overhead Indirect CostsTaxes and InsuranceOffice OverheadProfitTypes of Costs In a Construction EstimateConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights ReservedMaterial PricingVerify Material Quoted matches specificationsHow long quote price good for?Does quote include delivery to siteDoes price include specified warrantyIs Adequate stock availableWhat are payment termsConstruction Project Management, 4/eFrederick Gould, Nancy JoyceCopyright © 2014 by Pearson Education, Inc.All Rights ReservedLabor