In the construction estimation process, the goal is to predict the overall cost and resource requirements for a construction project. It involves several key steps
1. Project Scope Review
The estimator starts by thoroughly reviewing the project’s plans, specifications, and any other documentation. This includes architectural drawings, structural plans, and site reports.
2. Quantity Takeoff
The estimator measures and quantifies all materials needed for the project. This step is also known as “material takeoff” and involves calculating the volume, area, length, or count of items like concrete, steel, timber, and more.
3. Unit Cost Estimation
Using historical data, industry standards, or vendor quotations, unit costs are assigned to each item in the quantity takeoff. These unit costs include material, labor, equipment, and subcontractor costs.
4. Labor Cost Estimation
Labor costs are based on the number of man-hours required to complete each task and the wage rates for workers, considering factors like location and labor unions.
5. Equipment Costs
Estimators must account for the cost of any specialized equipment needed for construction, including rental fees or purchase costs, fuel, and maintenance.
6. Subcontractor Quotes
If certain aspects of the project will be subcontracted, such as plumbing, electrical, or HVAC work, subcontractor bids or quotes are gathered and included in the estimate.
7. Overheads and Profits
General contractor overhead (e.g., insurance, office expenses, administrative costs) and the desired profit margin are factored into the total estimate.
8. Contingency
A contingency amount is often added to account for unforeseen costs or project changes, typically ranging from 5% to 15% of the total estimate.
9. Final Estimate Compilation
After gathering all cost information, the estimator compiles it into a detailed cost estimate document, which includes a breakdown of all line items, summarized costs, and a total project budget.
10. Bid Submission
For competitive bidding processes, the final estimate is submitted to the client. If the contractor wins the bid, this estimate serves as the project’s cost baseline.
Throughout the estimation process, accuracy is crucial to avoid underestimating, which can lead to losses, or overestimating, which can result in lost bids. Technology such as Building Information Modeling (BIM) and estimation software tools like Bluebeam, ProEst, or PlanSwift are often used to increase efficiency and precision in the process.
