Construction estimating is perhaps the most crucial step of the construction process. Construction estimators take up the task of crafting, researching and compiling comprehensive construction cost analysis for all construction projects.
Cost estimating is a tasking process that takes time and requires careful consideration of all variables that may affect the construction process. Cost estimators, however, have mastered how to navigate this laborious process.
Therefore, what we’ll now break down is the process of construction estimating. How it is created, what cost estimators do during each phase, and highlight the complexity of the process and the work that goes into construction cost estimating.
The construction estimating process helps highlight the importance of equipping cost estimators with all the necessary tools to complete their tasks. Before the breakdown, it is essential to understand that every project is different and unique. The characteristics of a construction project are different for every client, design team and contractor. The budgetary considerations and materials plus labor for every project are unique.
Following this, estimates cannot be the same for every project. Also, not every estimator follows the same process to arrive at a cost estimate. Keeping this in mind, the construction estimation process can be broken into four major phases.
Construction Cost Estimating Process [Phase one]
In the first phase, the estimator meets the client, the architect, and the design team. The first step for an estimator is to familiarize with the project in order to understand the scope of the project.
Once an estimator sees the project from both sides, then they can begin the estimation process.
At this stage, the estimator also gets a hold of the project’s blueprints and schematics and goes over them with the architect in detail. It is during the first phase that the estimator also gets to visit the site and visualize the project.
Seeing the project site helps estimators account for any logistical concerns, environmental considerations, materials, and their storage, as well as shipping concerns. All these factors affect the cost or length of completion of the project.
Construction cost estimators also look at whether the site of the project is home to any protected habitats, whether there are environmental regulations for the area and also considers the weather. Each of these factors can significantly delay the construction process, influence material storage, and shipping, as well as the type of materials to be used.
In other words, the first phase is familiarizing with the project stage. This includes getting to understand the client and other parties that will be involved in the construction process. From this stage, the estimator gains a better understanding of the project and can visualize timeframes.
It is essential to open up lines of communication during this first stage, to ensure a seamless transition into the next phases of the process. Cost estimators, therefore, must be communicators who can understand and work alongside the client and all parties involved.
Construction Cost Estimating Process [Phase two]
With an in-depth scope of the project, as well as an understanding of the client, parties involved, and the expectations, the cost estimator can now begin to dive into the nuts and bolts of the project. This signals the start of the second phase of the construction estimating process.
The second phase of the project centers around creating a comprehensive list of all things necessary for the project to start. This includes materials, labor, and the time required to complete the project, as well as other factors like weather.
The list of materials required for a construction project, also known as material takeoff is a crucial element to the process. It entails compiling massive amounts of information and a lot of mathematical equations.
The takeoff process also requires careful consideration of the countless factors that could impact the necessary materials for the project. For a construction estimator to create takeoff, they must go through every inch of the project blueprints or schematics. This is to help determine every single material required for the completion of the construction process.
The takeoff must contain everything, including the number of screws and bolts required for the construction. The concrete, finishing materials and any material required for the cleaning up of the job site after the project are also included in the takeoff.
Once the takeoff is completed, the estimator must then determine and note down all key factors that will impact the overall cost of construction. Depending on the project, the materials, and the timeline, this information varies from project to project. However, it must always include the specific materials, their weight, volume, size and quantity as well as storage considerations.
Moreover, a cost estimator must assign the cost of each material. For this, the estimator must work closely with vendors to get quotes. Cost estimators should also anticipate any price fluctuations when assigning material costs.
Another important task for the cost estimator during the second phase is determining a realistic timeline for the project. Usually, the timelines may not align with the client’s expectations, which requires a discussion with the client and design team to address the issues that are causing changes to the expectations.
Accurate cost estimation and the timeline for project completion are both crucial and difficult. Many construction projects experience delays due to unforeseen factors and therefore, estimators must do their best to provide the closest to the accurate timeline.
Every cost estimator knows that project completion determines its success or failure. Delays in completion can impact a contractor’s future negatively. Estimators must, therefore, account for a variety of factors that can delay the project.
Construction Cost Estimating Process [Phase three]
To enter stage three of the construction process, cost estimators must be completely done and satisfied with the results of the second phase. It is important that estimators thoroughly examine and carry out the tasks in each stage.
Phase three of the construction estimating process is where the estimator determines the labor requirements for a successful project. In this stage, the estimator also compiles an analysis of the expected labor costs.
Creating a comprehensive report of the labor requirements and costs is challenging and time-consuming. To ease the process, estimators work closely with the construction managers and subcontractors.
During this stage, the estimator must come up with a comprehensive analysis of how many workers are required for the project. In some projects, the estimators are also required to work closely with union representatives. In these cases, additional labor considerations may arise.
For labor estimation, the estimator should take into account the size of the project as well as its scope. The time expected for the project to run for is also an important consideration when estimating labor costs. Furthermore, the estimator should be able to anticipate the need for specialized or skilled labor in the course of the project.
Another consideration for labor estimates is the local, state and federal labor regulations, union requirements and non-work days like holidays. Like every other stage, the estimator must work with all parties involved to assess the labor cost estimates and agree on them.
Therefore, a cost estimator must note every position that needs to be filled, their required time on the project, the cost of that labor, any overtime payments, holidays and many other factors. It is also the job of cost estimators to compare subcontractor bids and choose the best for the project.
During the third stage of the construction estimating process, the estimator also applies any markups to the estimate to ensure that a profitable bid is submitted. Depending on the estimator, they may apply markups throughout the estimation process while others apply at this stage.
Markups are essential to the estimation process because, without profits, the contractor stands to incur losses and a negative impact on their future work. Also, the extent of markups can impact a client’s choice when looking through bids. Estimators who work for contractors must incorporate enough markups in their estimates to ensure the contractor turns profits. However, the bid should also be competitive.
Construction Cost Estimating Process [Phase four]
This is the final stage of the construction cost estimating process. Therefore, this is the stage where the estimator presents a detailed estimated cost analysis of the project to the client, project managers, and architect.
All the work done in the first three phases is consolidated and the client can take bids from contractors for comparison with the estimate.
The clients also look at the contractor’s history and success in completing projects. The accuracy of an estimate determines the success or failure of a contractor to secure a bid. The relationship between the estimator and other parties involved in the construction process also determines the success of the bidding process.
The estimator produces comprehensive reports during this stage. These presentations should be readable and high quality, encompassing all the details of the project. Estimators must ensure that their estimate and the data supporting it are clearly stipulated in the report.
Even after presenting the report and the estimates, an estimator’s job is not done. They must be able to address challenges that arise during the construction process and explain to present parties how these challenges are accounted for in the estimate.
To be able to work well in the construction industry, estimators must be good communicators and be able to work collegially with all parties involved in the project. It is imperative that all parties agree with the estimate. And even then, the estimator’s job is far from done.
Once construction begins, estimators take up an oversight capacity until the project is completed. This is to ensure that the project does not go over budget. Also, should any unforeseen circumstances arise, the estimator is tasked with providing revisions to the estimates in order to remain within the time set and the budgets?
After following the construction estimation process, it is clear that cost estimators are integral to the construction process. They must be present for the duration of the project and their work shapes the entire project. To cut down on the time used in some of these stages, estimators use commercial construction cost estimating software to help create an estimate and streamline their work.