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23 Jul

Construction Cost Estimating Process [Ultimate Guide]

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]

Construction Design TeamIn the first phase, the estimator meets the client, 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 the 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]

construction customer serviceWith 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 mathematic 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 projects 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]

construction laborer skillsTo 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 clients 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]

Cost Estimating Process 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?

To Conclude

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.

23 Jul

Construction Cost Estimator: What Role Do They Play in The Construction Industry?

The construction process requires the hands-on presence of many professionals. Among them, construction cost estimators who are crucial to the process. Without construction cost estimators, the construction process might never take off.  A construction cost estimator works with other players in the construction industry like clients, architects, vendors, and contractors. The main task that cost estimators perform is to outline the costs of a project. Construction cost estimators re an essential part of the construction industry and their importance cannot be understated.  For people with little knowledge of the construction process, a building cost estimator may not seem as important. Therefore, we’ll break down the role of a construction cost estimator to help people understand what they do and how important they are to the construction process. 

Construction Estimating 

construction cost estimator free To start off, it is important to understand what construction estimating is. Construction estimating is the process of estimating costs for materials, subcontractors, and labor for any construction project. These estimations help shape the construction budget as well as provide a timeline that the project is expected to be completed.  Construction estimators are imperative to this process and play a central role in every construction project, regardless of its size. An estimator provides an estimate for the client. The estimate outlines details of the costs that the client will incur for the project.  When explained, the construction estimation process seems simple, however, it is a complex process that must balance many factors and considerations and produce accurate estimates. An estimate determines the success of the project. Inaccurate estimates often cost clients more money and contractors incur losses.  When formulating a construction estimate, cost estimators know that the conditions and circumstances can change at any time, which sends them back to the drawing board. When this happens, projects experience delays and changes in the cost of construction.  Construction cost estimators must always use their skills and experience to account for uncertainties during the project, and that is no easy task. The work of a construction estimator, therefore, extends to known and unknown factors. With this in mind, the estimator then arrives at the closest possible costs for a construction project.  For accurate and seamless estimation, construction cost estimators must first consider the size of the project, as well as its scope. With this in mind, the estimator can tall all the materials necessary for the project and in what quantities they are required. Moreover, this then helps the estimator consider the market price of the materials.  Secondly, estimators assess labor required for a project and the labor costs. This is derived from an estimate of the length of time the project will take to complete. Both of these roles are crucial and help outline the final costs of a project. The accuracy of the cost estimate impacts the success of the contractor working on the construction.  Each step of the construction estimating process is vital and should be approached with careful consideration. All the factors that an estimator will consider should be expertly examined. The estimator must also have sufficient knowledge of construction estimating and put into consideration the wishes of the client. As a matter of fact, a construction estimator should also consider things like the weather when providing a cost estimate.  cost estimator materialsA construction cost estimator should always create a list of materials required. This makes it easy to keep track of estimates and check off materials as the estimates are made. Material take-off lists the materials and their costs.  To build a takeoff, construction cost estimators study the blueprints and schematics of the project then create a comprehensive list of all materials. The materials include hinges, wood for framing, wiring, plumbing and all other construction materials needed for the construction.  With the comprehensive list, the estimator then begins to check and compare the market prices of the materials. The prices assigned to materials must be close to the anticipated costs of the project since the client is working with a budget. Moreover, the estimated costs should also be close to the future costs of the materials in case material costs fluctuate.  The cost estimation process does not end with the list and estimated costs of materials. The construction estimator must also factor in the weight of the materials and logistics of moving these materials. The estimator must also consider whether the materials need any more fine-tuning before they’re used for a project.  The takeoff process is not simple, it takes a lot of time and can be tedious. Inaccurate takeoff discredits the whole estimation process. It is essential that takeoffs are accurate because they determine how a construction estimator arrives at the final costs of the project.  Most of a construction estimator’s time is spent on the takeoff. They must account for every single material needed and individual costs estimates of every material expected to be used for the construction. The risk of cost overages can be minimized with care when materials can be quantified. However, materials are the easy part of the estimation process. The cost estimator must assess many potential risk factors that aren’t as quantifiable as the materials.  construction estimating checklistOver and above estimating the cost of the project, a construction cost estimator is also tasked with anticipating delays, risks and any excessive costs that may arise during the construction. This is no easy task and therefore estimators must rely on their expertise for these factors.  The completion timeline for the project is another area that the construction cost estimator must determine. For this, the estimator works closely with the project contractor and client to the project completion date.  A large part of a construction cost estimator is to predict and anticipate the future. For instance, delays in the production of materials for the construction. While it is impossible to predict the future and the weather accurately, estimators rely on their educated guesses to inform their estimates.  In a very basic sense, construction estimators have a job that requires them to weigh known and unknown factors. They should anticipate risks and how every little fluctuation in weather or costs impacts the final costs and timeline of the project. The estimator must also assess the impacts on any future regulatory changes on the construction process.  With this in mind, an estimator must have a deep understanding of the extent of the forces within and outside the construction industry. They must also possess the ability to work with teams of people and take into account their contributions to the construction process.  It, therefore, goes without saying that construction cost estimating is a position that requires highly professional individuals who possess the skills, expertise, and patience for the process. Estimators generally work their way up the construction industry. However, there are many career paths that can lead you to construction cost estimating. That said, estimators must first have a firm grasp of mathematics and engineering.  Communication is also a crucial skill for estimators since they have to work with clients, contractors, vendors and many other professionals in the construction industry. Data distillation is the icing on the cake for estimators. The estimator must be able to render data readable for presentations. They must be able to come up with professional reports that detail the analysis of the project and the estimation process.  Construction cost estimation is therefore very imperative to the financial success of contractors and the timely completion of any project. 

Estimators and the Construction Industry 

Estimators and Construction industryThe construction industry is complex and extensive. It is an assembly of many moving parts and without one of these parts, the industry would crumble. Estimators are a crucial part of the industry. Therefore, professionals in the industry cannot afford to downplay the importance of estimation.  Modern construction is very highly volatile and unpredictable, which is basically what estimators do. The speed at which changes occur in the construction industry requires skilled professionals to help assess risks and anticipate these changes before they take shape.  It is important to acknowledge that cost is the number one driver of the construction industry and every little fluctuation impacts cost.  After cost, project timelines come second and then followed by project quality. However, cost is the number one player and determines the success or failure of a construction job. The cost that’s detailed on an estimation form a central point for the construction process. Construction firms consider the cost estimates when they’re trying to secure a project.  For most clients, securing funding for a project occurs before the project begins, which means that clients work with a fixed amount that the estimation should try to remain within. These budget restrictions make it crucial for a construction estimator to offer accurate estimates on the project.  It is unfortunate that many people begin to realize the importance of a construction estimator when the project goes over budget. While some reasons are avoidable with an estimator, some other reasons are beyond the estimator’s control.  An estimator’s work doesn’t end when the report of the expected costs and timeline is submitted. Throughout the process, the estimator should be present, especially when changes in the design and scope of the project are made. Revisions to the estimates should be done when circumstances come up.  Researchers have found that inaccurate cost estimates often plague even the most carefully thought projects. One such project is the Channel Tunnel that resulted in $21 billion over the estimated cost. It is, however, important to realize that most projects go over budget.  When projects go over budget, contractors stand to lose since clients lose their trust in them. This, therefore, stresses the importance of contractors working with estimators. It is the only way to change public perception and distrust in contractors. 

22 Jul

A Commercial Construction Cost Estimator [Ultimate Guide]

In construction, a detailed forecast for project expenditures is crucial to any construction project. It is, therefore, up to cost estimators to develop cost estimates that the contractors, business owners, managers, and design teams require. For clients, a cost estimate helps businesses make informed decisions. For instance, with a cost estimate, a business owner can determine whether or not the project would be financially successful on not. For contractors, the estimate helps inform their upper management on the decision to build or not. In light of this, cost estimators must analyze all relevant data in order to determine the time, materials, labor, and money required for a project. To be a construction cost estimator, therefore, requires that one has a relevant qualification and most importantly experience in construction cost estimating. Construction cost estimators work contractually in various ways. For instance, clients can work with a cost estimator; contractors can also hire a cost estimator, an estimator can also be employed as part of a design team for the client. The responsibilities that fall on a construction cost estimators shoulders include providing a cost forecast before the project starts. However, an estimator is also required to be present throughout the process to offer revisions as needed. The services of a commercial cost estimator are crucial to ensuring that there are no cost overruns or delays in project completion. Therefore, the role of a commercial cost estimator is one that cannot be overlooked.

What is construction cost estimating?

construction cost estimating process and practices Construction cost estimation is the process of predicting the cost of a construction project. With an estimate, the client, managers, contractors, and design teams can allocate budgets and also determine the feasibility of a project. A construction cost estimate is one of the essential parts of the construction process. Before ensuring that the project meets both the scope requirements and financial feasibility, a project cannot take off. Having an effective cost estimate in place ensures that the client doesn’t incur any losses. The same goes for contractors. As the builder, losing money on a project stains a contractor’s reputation, although it is also important to mention that construction cost estimates can provide a project’s timelines. Since most people who lack construction industry knowledge may not know the importance of a commercial cost estimator, they often end up overlooking their significance to the project. However, it is crucial that anyone looking to erect a physical structure knows the value of hiring a construction cost estimator. Put simply, any client who is conscious about how much their project will cost and how long it will take, they need to hire a cost estimator. Commercial cost estimators are, however, not only important for new projects. They can also help during maintenance and remodels; in other words, all kinds of construction projects.

Some of the projects that require an accurate estimate include:

  •   Development projects

These are projects that have budgets and timelines that are closely tied together. Lenders provide the budgets, and therefore, the faster the lenders are paid back, the quicker the owner can start generating revenue.
  •   Large civil projects

These are megaprojects, they entail a sizable scope and sometimes involve public funding. Therefore, the accuracy of the estimate is paramount in such projects. For a civil construction project, one small miscalculation can become a rolling stone and magnify into a large problem. Therefore, it is vital that the estimates provided are very accurate to increase accountability but also provide transparency, especially when dealing with public money.

Importance of Accurate Estimates

Importance of Accurate EstimatesBefore getting into why accuracy is essential when preparing estimates, it is essential to remember that providing estimate project costs that are absolutely precise is next to impossible. Therefore, the next best thing is providing estimates that are as accurate as possible. It is also important to acknowledge that many factors play into a construction project. Some of these unforeseen factors could affect the estimates. However, a skilled and experienced estimator will account for as many elements as possible when preparing an estimate.

Some of the factors that affect an estimate include:

  •   The experience and skill level of a construction cost estimator
  •   The market conditions
  •   The size and scope of the project
  •   The quality of the tools that an estimator uses
  •   The accuracy of the cost information
  •   The level to which the estimator will define the project
  •   Quality of the project plan
  •   The industry it’s being constructed for
  •   Many other factors
Cost estimation can be done by an individual or a team of construction cost estimators; this depends on the size of a project. Individual cost estimators mostly work on small projects. Estimators also hold different positions in construction. For example, the contractors and subcontractors can prepare estimates. This is, however, discouraged, using a professional construction cost estimator is the best way to ensure that the forecast is accurate. In other cases, construction salespersons have acted as the estimators. There are construction estimators in most architectural firms; they require in-house estimators as they create a project design. With all that in mind, it is clearly important that a reasonable cost estimate is prepared before delving into the construction process. An effective cost estimate can help contractors win jobs and make profits. In other instances, the urgency of a cost estimate requires the skill and expertise of a construction cost estimator.

Free and Paid Cost Estimators

free construction estimating software excel In construction, you get what you pay for. Therefore, those who look for free commercial construction cost estimator tools, it is highly likely that they’ll not have every feature that an estimator needs. However, they are convenient and simple tools that allow estimators to work out the location, square footage, and type of construction estimates easily. Free online cost calculators may be appealing and affordable, but in the end, they don’t deliver everything you need. The free estimators are not set up to plug in and compute complex data that is necessary, especially in commercial construction projects. Besides the size, type, and location of a project, you also need to consider the following:
  •   Type of occupants
  •   Design
  •   Environmental concerns
  •   Site conditions
  •   Current market factors
  •   Available materials
Moreover, construction costs vary based on the intentions of the completed project. i.e., sell it or hold the property.

The Problems of Free Online Estimator Calculators

how to calculate labour cost in constructionOne of the main challenges is inaccurate estimates, especially if you entirely rely on the free online calculator without knowledge of the current industry and markets. Even if there are calculators that can help access up to date information, they are rare. These free calculators are aimed at helping non-experts achieve a reasonable estimate and also learn how the estimation process is done. These estimators organize factors into categories like luxury, semi-luxury, best-standard, good standard, average, and minimum standard. Despite having these categories, they are merely subjective and do not reflect the variation requirements of commercial construction. Failing to account for ‘minor details’ which are in every wall, window, floor, ceiling and other parts of a building leads to an inaccurate cost estimate.

Paid Online Estimator Services

While paid calculators might be more productive, it is important to know how to use them. Therefore, the expertise of a cost estimator who understands the needs of different construction types is very crucial. Skilled estimators also understand the market, building codes, and the latest in construction technologies and techniques. Paid online estimator services are excellent for time management and accuracy. They also help to streamline the management experience for everyone involved in the project. These online tools are essential for every phase of the project, regardless of its size.

To conclude:

As discussed, the construction cost estimation process is daunting. A high level of concentration, time, and accuracy is required to avoid cost overruns and delays in the project’s timelines. Therefore, to save on this, it is essential that you work with a skilled and experienced cost estimator. While construction cost estimation software makes it easier for estimators, expertise is still necessary to pull off an in-depth cost estimation. However, the significance of cost estimating software is not to be overlooked. With online construction software, an estimator can cut down on time it takes to prepare a construction estimate, for example, by using digital takeoffs and applying flexible markups. Through a streamlined process, everything in the construction industry moves faster and more smoothly.

22 Jul

A Construction Takeoff [Ultimate Guide]

The success of any construction project relies on a number of factors. Among these factors is construction takeoffs. A construction takeoff gives the client and contractor a clear picture of the costs associated with the construction project. The cost estimates for materials and every little aspect of construction depend on the size and scope of the project. Construction takeoffs can be relatively simple or very sophisticated; besides, the construction process depends on a successful construction takeoff. Therefore, it is essential to start by addressing what a construction takeoff is, how it works, and what it entails.

What is construction takeoff?

take offs construction plans While the word may seem and sound familiar, it is crucial to define what it entails, especially for people who are new in the construction industry. Basically, a construction takeoff gives an estimator a detailed breakdown of all the components necessary for the completion of a construction project. Construction take offs are also known as takeoff, construction material takeoff, and take-off. However, all these names refer to the same thing. A construction take off is not just crucial for new projects. During renovations and project extensions, a detailed construction takeoff is necessary. To create a construction material takeoff, every single aspect of tools required for project completion must be listed. It is an estimator’s job to ensure that every single component is included in the takeoff. Construction takeoffs must entail all the raw materials. Once all the materials required are listed, then the estimator proceeds to quantify these materials. Quantifying and listing the prices of the materials helps come up with a construction cost estimate before the construction work begins. First, the estimator creates a quantity takeoff, which is the list and quantities of materials required.  Accuracy is one of the core pillars of a good construction takeoff, without which the project encounters challenges. The material take-off must cover all the materials, down to the nails. Besides all the information that a construction process entails, creating a construction takeoff is daunting and time-consuming. First, the estimator must study the blueprints or schematics in detail and come up with a quantity takeoff list. After listing the materials, their costs and quantities, then the estimator can prepare a construction takeoff. Essentially, a construction takeoff is the total material takeoff for a project, which includes the costs. Therefore, construction takeoff is crucial in the estimating process.

What a construction takeoff entails?

What a construction takeoff entails?Construction takeoffs are very straightforward. Basically, an estimator will itemize every material for the completion of a construction project and assign the correct prices. As a matter of fact, a material takeoff is more complicated than the construction takeoff. However, the complexity of construction takeoffs depends on the project. For a simple project, a contractor or estimator may create a material list in a short time. However, when it comes to complex projects, being thorough must be implemented. In some cases, it may require the estimation by a team of estimators since it’d be overwhelming for one person. Today, thanks to digital technology, construction takeoff is easier with the use of construction estimating software. One of the main challenges when coming up with a construction takeoff is knowing what to put in it. First of all, the takeoff must include all the materials that will be needed during construction. More than the material list, there must be an indication of the type of materials as well as their sizes and quantities. After materials, the construction takeoff also includes a list of prefabricated components like tiles, windows and light fixtures. For raw materials like lumber and piping, the lengths and sizes must be provided. Roofing and flooring are quantified in the area while concrete is quantified in volume. Manual construction takeoffs are time-consuming since the estimator must manually calculate complex equations. The pricing specifications on a construction takeoff must always be in line with current market values to ensure an accurate estimate. If there are particular materials requested by the architect or engineers, they should also be included in the takeoff. Determining material costs is one of the most daunting parts of construction estimation. Without correct prices, the project runs the risk of running over the budget, which could delay the project completion. Accuracy of the estimates also ensures that a project is profitable to the client and the contractor. To determine material prices, the estimator contacts and considers bids from material suppliers. It is possible that an experienced estimator might have the costs of standard materials with them. However, it is vital to check those price estimates with material suppliers. While the takeoff includes the list of materials required for the project, it will not include the number of nails as are necessary for the entire project, or the amount of screws. Certain items cannot be itemized in the usual fashion; therefore, the best approach for this has a rough estimate.

What a construction takeoff doesn’t entail?

Besides knowing what to include in a construction takeoff, it is also essential to know what not to include. First, construction takeoffs don’t include the labour required for the completion of a project. While labour costs are vital to the project, the construction takeoff doesn’t focus on that. Other costs that will impact the project are included in different stages of the estimating process but not in the construction takeoff. For instance, equipment cost estimates, rental and operational costs are not part of the construction takeoff.

Types of construction takeoffs

What a construction takeoff entails?

There are different types of construction takeoffs:

depending on the type of construction project. Usually, a subcontractor will have a different construction takeoff that won’t be the same as that of the general contractor. While these takeoffs are different, they follow the same process to create. Besides the takeoffs done by contractors and subcontractors. There are two other types of construction takeoffs, the digital and manual takeoff. A manual construction takeoff is the longest existing type. The estimator, in this case, has to read the blueprint, list each material and type of material as well as important considerations. After that, the estimator proceeds to assign prices.  While this sounds easy, the process is long and tedious. It is also prone to human error due to miscalculations and omissions when counting materials. It is easy to miss the mistakes in a construction takeoff when it is done by hand. The exhaustion from the process also compromises the effectiveness of an estimator. Digital construction takeoffs, on the other hand, have many benefits. To start with, a digital takeoff is completed in a construction estimating software platform. Therefore, it is less time consuming and reduces the margins for error. With a digital construction takeoff, the data is automated and makes it easy to track and complete calculations. However, different platforms offer different features. Some digital takeoff software will allow the estimator to upload the blueprint and the platform extracts a comprehensive list of all the materials required.  With that done, the estimator only needs to make adjustments to the list and estimates to account for damages and material waste during construction. After the adjustments, the estimator then goes back to the platform to apply prices to each of the items. Through digital construction takeoff software, the platform access databases with price estimates and creates the costs for the materials. Another upside of digital takeoff software is that a contractor can adjust material prices depending on current market trends. The software can account for market fluctuations. With the prices set and markup applied, the estimator can then export the data in different formats.

To sum up

Simply put, a digital takeoff is much simpler than a manual takeoff. Saving time in construction is important because changes in weather can derail the project completion. Through a construction takeoff, contractors don’t have to waste their time coming up with reports on materials.

22 Jul

What is Construction Estimating?

Construction cost estimating. It is one of the vital components of a construction process and entails a process of forecasting costs. The expenses expected for a building or a physical structure are an essential aspect of the construction process. With that in mind, it is crucial to understand the role that a construction cost estimator plays. It is also essential to understand the phases of construction estimation. This information is especially vital to contractors and clients. Every client should know how much a building will cost before embarking on the construction process. There are cost estimates for every kind of construction project. With cost construction, there are many risks involved, which is a cause for concern for contractors and clients. The financial turnover of a construction project is one of the determinants of the project’s success. Therefore, it is best that each of the parties takes a considerable amount of time in the cost estimation process. If you’re considering a large construction project, having multiple estimates is always a smart move. Construction cost estimating cover the project scope and feasibility, project construction costs, and allocate these costs as well as project completion timeline for the project. For contractors, cost estimates determine whether or not they place a bid on the project. Essentially, a reasonable cost estimate helps the contractor make profits and prevents the client from incurring extra costs. Earned value management cost estimates utilize a project management technique to track performance against time and cost estimate.

Why an Accurate Cost Estimate is Important?

importance of estimation Construction cost estimating is the best available method of determining costs for construction. However, the technique is not necessarily foolproof. The accuracy of estimates is very crucial and could determine whether or not a project succeeds or fails. Projects that have set timelines and budgets primarily rely on cost estimation to expedite the construction process and begin revenue generation. Any slight miscalculation could magnify into a massive setback for a project. That said, construction cost estimators must obtain accurate cost estimates. When it comes to public projects and projects funded by lenders and public monies, cost estimates help increase accountability and transparency. It is next to impossible to have an estimate that is 100% accurate. Although many other unforeseeable factors could cause a project to fail, it is essential that the estimate is as accurate and precise as possible.

A cost estimate relies on components such as:

Components of cost estimation

  •   Experience and skill of an estimator
  •   Quality of the project plan
  •   Level to which the estimator defines a project
  •   Quality of the tools and procedures utilized in by the estimator.
A cost estimator does not always have to be a lone wolf; it could be a team of individual, depending on the type, scope, and size of the project. Some estimators work with clients; others work with contractors and others with architectural firms. However, qualified and independent estimators are also common. Contractors rely on estimates to win jobs while the customer looks for the lowest bid that suits their project parameters and meets the standards.

What Does a Construction Cost Estimator do?

It is quite evident by now what a cost estimator is tasked with. It is also an open secret that an estimator is crucial to the success of construction projects. They are familiar with everything about a project and have skills to help them navigate the expenses associated with projects. According to the US Department of Labor’s Bureau of Labor Statistics, there were 213500 cost estimators in the US in 2014. The Bureau also predicted that the numbers would grow exponentially in the next decade.

Identifying Types of Construction Cost Estimate Systems

Types of Construction Cost Estimate There are new products and technology in the construction industry often. This is also true for cost estimating tools. An estimator must, therefore, continuously identify methods, techniques, tools, and software that benefit them as well as improve their accuracy. It is also important that an estimator creates multiple estimates during the pre-design and design phases of the construction process. As the project level of definition increases, and many other variables come into play, the cost estimates become more accurate. According to the American Society of Professional Estimators, there is a five-tier system that classifies estimates. As the estimation process moves from one level to the next, it becomes more detailed and reliable. Here are the five tiers.

Level 1: Order of Magnitude estimate

This is an estimate formulated before the project design is done. The estimate determines the overall feasibility of a construction project.

Level 2: Schematic Design estimate

This is an estimate that is produced in line with the schematic design.

Level 3: Design development estimate

This is the estimate made during the design phase

Level 4: Construction document estimate

The estimate in this stage is based on the construction drawings and specifications.

Level 5: Bid estimate

The information in the construction documents informs this level of estimating. This estimate is prepared for contractors to use in their bid. In a different system, classifying estimates entails three significant categories:

Design Estimates

Construction Design EstimatesThese are estimates prepared during the pre-design and design phases of the construction process. They begin with an order of magnitude estimate (the screening estimate) to determine the type of construction methods and which of them are viable for the particular project. After that, there is the preliminary estimate (Conceptual estimate) that is based on the schematic design. The detailed estimate (definitive estimate) follows and is based on the design development, and lastly, there’s the engineer’s estimate, based on construction documents. With a basic template, you can get the initial assessment of the project expenditure.

Bid Estimates

construction bid templateBefore placing a bid for a construction project, contractors must extensively research and then prepare a bid estimate for the project. The data is usually drawn from various sources like direct costs, subcontractor quotes, quantity take-offs, and supervision costs.

Control Estimates

Cost Control estimateThis is an estimate prepared after a contractor’s agreement with the client, but before the project commences. It serves as a baseline that the actual construction costs of a project are assessed and controlled. The estimate enables contractors to prepare plans to satisfy future costs while determining the project’s cost to completion.

Key Terms to Know in Construction Cost Estimating

Key Terms of Construction Cost Estimating The cost estimating process is made up of many elements. There are terminologies that anyone in the construction industry should be familiar. These include:    
  •   Bonds
Generally, a customer needs a contractor for the issuance of a performance bond in favor of the project owner. A bond is a form of guarantee of delivery; in case the contractor fails to complete the project as stipulated, the owner should receive compensation according to the terms of the contract.
  •   Capital costs
Essentially, capital costs are the expenses associated with establishing a structure. These are:
  1.   Cost of land
  2.   Cost of feasibility studies and the pre-design phase
III.    Compensation for the architect, engineer, and members of the design team
  1.   The total cost of construction (labor, materials, equipment, etc.)
  2.   Cost of a commissioner
  3.   Cost of temporary equipment and structures
VII.    Cost of inspection
  •   Contingencies
Even the most accurate estimate can be affected by factors outside anyone’s control, there are contingencies to deal with such a situation if and when it arises. Therefore, there is a sum of money set aside for unforeseeable factors.
  •   Equipment cost
This is the cost of running and maybe renting heavy machinery for a construction project like cranes and cement mixers. Therefore, noting the effect of the equipment on the speed of completion for a project is essential. The use of equipment can impact costs outside the project scope.
  •   Escalation
This is the natural inflation of costs over time and is crucial for long-running projects. In some projects, there are escalation clauses to address how to address inflation.
  •   Indirect costs
Indirect costs cover costs that are indirectly associated with construction work. For instance, administrative costs, transport, legal fees, permits, and other expenses depending on the type of the project.
  •   Labor hour
This is the unit of work that measures the output of an individual per hour. It is also known as man-hour.
  •   Labor rate
The labor rate is the amount paid to craftsmen per hour. This covers the hourly rate, benefits, and added costs of overtime payroll burdens. For example, unemployment insurance.
  •   Material prices
Material costs are subject to fluctuations, depending on market conditions and seasonal variations. Historical cost data and phases of the buying cycle can inform estimators when calculating material costs.
  •   Operation and maintenance costs
Operation and maintenance costs are a client’s headache. These are accounted for during the design team. Trying to lower the total lifetime costs of a project often results in more costs and losses, as well as delays. Operating costs include salaries and land rent and utilities, etc
  •   Profits
It is important that a project turns profits. The contractor needs to add a margin to the actual costs of the project for their profits. Subcontractors also do this.
  •   Quantity take-off
This is done during the pre-construction phase. The take-off measures the labor and material costs that are required for project completion.
  •   Subcontractor quotes
For every construction project, a contractor requires the help of specialist subcontractors to complete different parts of the construction. Therefore, in the final estimate from a contractor, they should include the subcontractor quotes. Having a tracker in place can aid a contractor in recording all of the subcontractor information and documents in one place.
  •   Variances
Variances budgetUsually, a customer will create a project budget that is greater than the cost estimates. Even an in-depth cost estimate could underestimate the actual construction costs. Many reasons could contribute to this like wage increases, which can be very difficult to predict. Seasonal and natural events like heavy rains or strong winds could also affect the process. Many large projects also undergo regulatory issues. If a client begins construction without the final design, they are prone to going over the budget due to design changes. To Conclude Cost estimating plays a huge role in construction estimation. However, it is important to understand the various tiers or categories of the process, as well as the most commonly used words in the industry. For a successful project, all the rules that go into construction and cost estimating must be followed religiously.

22 Jul

Why Construction Estimating is Important?

In construction, the objectives are always clear regardless of the project size, duration, or design. The main objective is always to accomplish the goals set and fulfill the vision you have for the project. With this in mind, it is essential to outline all the necessary steps to make this vision a reality. First, any company planning a construction project needs to examine real-world finances to determine the feasibility of a project. Construction is not a complicated process with the right tools in hand and a well-executed plan. The only successful way for construction ambitions to become a reality is with an accurate construction estimate. Therefore, to start you off on realizing your vision, we’ll explore and discuss why a construction estimate is a place to start for any commercial project.

The Purpose of Construction Estimates

Before diving into construction estimates, it is essential to highlight that everything from a renovation to an add on and even construction of a new project requires an evaluation. It is the only way to see a partial picture of the project before it is completed. Construction estimates provide an in-depth description of the project and the expenditures needed for the project. Moreover, estimates give clients a projected cost estimate of how much they’ll need to spend to attain their vision. Every professional in the construction industry knows that there are costs that often run beyond the scope of the project. The United States Census Bureau states that commercial construction estimators can give accurate estimates for a project by gathering information on multiple factors that affect the construction process. The concepts that a cost estimator analyzes impact the total cost of a construction project. Therefore, having a compilation of detailed data points is imperative. The factors that construction cost estimators look into include labor, materials, location, duration, special machinery, building codes, soil conditions at the site, and many others. For many clients, these factors may not seem crucial; however, these can affect the duration, cost, and even outcome of a construction project. In areas where extreme weather conditions are rampant, construction projects often drag and end up being over the budget. On the other hand, a construction estimator must also account for factors that might not be easy to measure. For instance, the estimator should be able to predict possible market value fluctuations for materials. Additionally, estimators look at the type of materials used for a project. The materials necessary for an eco-friendly building will differ from those of an ordinary project. Material-lead times also play a role in the duration and timelines. A construction estimator must contact vendors early to get materials that might not be immediately available. Advance orders need to be placed.

Construction Cost Estimation

Construction Cost Estimation Service Construction cost estimation is crucial to the success of any construction project. Cost estimators rely on their expertise and experience to accurately estimate costs for construction projects. The techniques that estimators employ vary in speed and potential accuracy. That said, here are some of the approaches that cost estimators employ:

Allocation of joint costs

How do you calculate construction costs?It is difficult to assign cost estimates to individual project elements. Therefore, different mathematical formulas are implemented. The total essential cost helps direct the allocation of the expenses to various elements.    

Empirical cost inference

free construction cost estimatorThis is a statistical method that relates to the cost of construction to a model of predictors through regression analyses. The quality of the predictive model determines the accuracy of this method. As such, it is crucial that there is a degree of familiarity with individual predictors of total project costs and statistical methods expertise.  

Production function

What percentage of construction cost is labor?This relates the output, which is the amount built to the input, factors such as materials and labor. In other words, to achieve a certain level of output, you must define the optimal input. Production functions can be very accurate when predicting input and output relationship for construction projects. There is also extensive data to draw upon for specific project types like schools or hospitals.

Stick Estimating

Stick Method Estimating WorksheetIt is considered a very accurate method, but it takes a lot of time. Stick estimating determines total expenditure by listing the cost of all components of a job in the correct order. With stick estimating, human error is often a concern. Primarily due to the amount of time it takes, estimators can lose concentration and focus during the process.    

Unit Cost Estimating

Unit Cost EstimatingUnit cost estimating is relatively fast and accurate. It associates unit costs with each assembly involved in a construction process. When an estimator has used the assemblies previously and has evidence to justify the unit costs, the process becomes quicker.      

The Value of Accuracy and Why Estimates are Important

Importance of estimating accuracy For companies considering development, budgets aren’t always the first concern. Despite this, at some point in the planning for the project, they will arrive at budgets, a very crucial step. A feasible budget is vital for the success of any project. The company must, therefore, identify whether their spending cap is enough to turn their ambitions into reality. This vision, however, cannot be realized without an accurate and well-researched construction estimate. Clients will always have to compare bids from construction companies; therefore, each company must present their estimate costs for the project, as well as detail the project duration. After considering bids, the client then selects the best-suited company to execute the project. Contractors sometimes work with estimators as part of their company, or they choose to outsource construction estimators. The most important thing is for the estimator to be worth their salt. They should be able to study blueprints and schematics well, gather information on the project, estimate project duration, materials, and labor accurately. It is crucial that clients and other stakeholders in construction projects understand that estimates are subject to change. Simply put, estimates are an essential step in the construction process but can be affected by unforeseeable factors. For instance, weather changes and market value fluctuations could cause a project to delay or go over budget. Construction estimation is one of the most viable criteria for clients to hire construction companies. The estimate must be as accurate as possible, and after the estimate, the estimator continues to be present throughout the duration of the project. When projects go beyond the scope of the estimate, clients often have to provide for the additional costs or sacrifice certain designs and features to squeeze into the available budget. To avoid the frustration that comes with paying for additional expenses, it is vital for clients to look at more than the costs and duration when reviewing bids from contractors. A construction company’s track record can help guide you.

Getting an Accurate Estimate From a Construction Estimator

how to estimate construction costs By now, the importance of a construction estimate is evident. Getting an appraisal from a qualified estimator is invaluable for your company. If you’re working with an independent contractor or a construction company, you cannot skip over having an estimator present. The estimate that a construction estimator gives helps you secure enough funding for the project. Therefore, an accurate estimate is essential to the successful completion of any project. When looking for a qualified construction cost estimator, here are some of the qualifications you should look for:
  •   An understanding of architectural drawings

  •   A proven method of compiling accurate estimates.

  •   Knowledge of building materials, building codes, industry trends, and anything to do with construction.

  •   Accuracy and precision in calculating costs

  •   Data collection capabilities as well as the ability to classify, evaluate and present relevant data

  •   Experience in construction work and thorough knowledge of the cost of materials, overhead expenses, material lead times and any other expenses

  •   Communication skills

Working with under-qualified estimators puts you at risk of suffering cost overruns. This can delay the project and even damage the reputation of your business. While it is important to give opportunities, when it comes to construction, you cannot afford to gamble by picking an amateur estimator. Ensure that the estimator you work with focuses solely on their job. Their only job should be getting an accurate estimate. Using project managers as cost estimators is one of many moves that could endanger the future of a company. Any successful business respects that different professionals have expertise in different areas of the construction process and doesn’t cut corners to try and save costs.

Drawbacks for Cost Estimators

Drawbacks for Cost Estimators   There are common pitfalls that even the most experienced cost estimators may not be able to avoid. However, you can prevent most of them by following standard procedures and ensuring consistency. The most common problem that construction cost estimators fall in to is failing to read the project documents carefully. With the wrong information or half the facts, then estimators cannot fully comprehend the project scope and the associated costs. Another problem is inaccuracies in mathematics. When costs are entered incorrectly, or an estimator forgetting to incorporate certain costs, it affects the final estimate negatively. These issues can be compounded when an estimator fails to thoroughly go through their estimate before submitting it as a final estimate. While these are the main drawbacks, other oversights can challenge an estimate. For instance, failure to visit the project site, failure to factor in weather patterns for the area as well as a lack of prediction of possible factors that could affect the process. A qualified and experienced cost estimator can spot these issues from a visit to the job site. This is one of the main reasons why it is essential for an estimator to tour the project site. Some cost estimators draw from cost data repositories but fail to adjust the costs based on local conditions. Some will make adjustments but fail to consider prior experience or quantitative comparisons. Such miscalculations can throw estimates off by a large margin. In such a case, these estimators make it difficult for another estimator to verify these estimates. Remember, if a cost estimate is off, by even a small margin, it could cause substantial problems for the project.

Addressing an Inaccurate Estimate

cost estimation problems and solutions   The most significant task for an estimator is to compile the most accurate information possible for a construction project. In the event that an erroneous estimate is provided, there will be no winners. However, all is not lost. It is important to acknowledge that sometimes, factors that no one could predict can affect an estimate. Since estimates serve to inform all parties involved in the costs going in, this situation can be remedied. Usually, an inaccurate estimate means extra costs for the client, contractor, or construction company. A proper estimate helps clients draw up a budget that they can stay within. Estimates also cement the future of a company. Construction companies stand to lose more than just money when an inaccurate estimate is used for a construction project. For clients, an estimate should never understate their needs. It is important, therefore, to double-check the estimates before kicking off the construction process. Once construction begins with a faulty estimate, you’ll fall short on realizing your vision for the construction project. Sometimes, it requires making concessions to allow for additional expenses. With an accurate estimate, all potential difficulties can be avoided, and projects can run better from beginning to end. To Sum Up Construction costs may be the single largest component in any construction project. Therefore, it is crucial that construction industry professionals understand and take this into account. For a client, it is important to estimate all the operation and maintenance costs to help analyze the life cycle costs. Ultimately, the essential part of any project is profitability. If a project does not turn in profits, then it can very easily cost the company its reputation and additional costs. Using qualified cost estimators and appropriate construction cost estimating services is imperative.