Introduction to Construction Estimating Lecture Notes

Overview

• Purpose of Estimating: Determine probable costs of a project before construction begins.
• Importance: Estimator must consider all costs impacting the project.
• Challenge: All estimation work is done before construction starts, making it one of the most critical roles in a construction company.

Estimator's Role

• Visualize every detail of the project.
• Ensure all costs (materials, labor, equipment) are accounted for.
• Study construction documents (working drawings & project manuals) thoroughly.

Construction Delivery Methods

• Design Bid Build: Architect/engineer designs, project is bid on, contractor builds.
• Design Build: Contractor acts as both designer and builder.
• Construction Management: Contractor and some key subcontractors involved in design and construction.
• Integrated Project Delivery (IPD): Involves owners, designers, contractors, and key subcontractors sharing governance, risk, and profit.

Types of Costs

• Direct Costs: Materials, labor, equipment, subcontracted items.
• Indirect Costs: Site field office, weather, transportation, soil conditions, labor strikes, material and subcontractor availability.

Types of Estimates

1. Conceptual Estimate: Based on project concept with minimal information such as a vague description or sketches. Used early in design to check budget alignment.
2. Preliminary Estimate: Prepared during design process, helps in decision-making for materials and cost upgrades.
3. Detailed Estimate: Prepared once design is complete; includes quantities and costs of every project component. Requires complete contract documents.
4. Assembly Estimate: Groups components into assemblies (e.g., interior door including frame, hinges, etc.). Simplifies the process and is useful for conceptual and preliminary estimates.
5. Square Foot Estimate: Multiplies square footage by cost per square foot of a similar completed building. Quick and broad but less accurate.
6. Parametric Estimate: Uses statistical relationships between building parameters and costs. More complex than square foot estimates.
7. Model Estimate: Uses computer-generated models and equations based on the estimator’s input. Useful for both detailed and preliminary estimates but may ignore site work costs.
8. Project Comparison Estimate: Compares proposed project with similar completed projects, adjusting for differences.

Factors Influencing Estimates

• Historical Data: Previous project data helps refine accuracy.
• Market Conditions: Labor, material availability, and economic conditions impact costs.
• Project Complexity: The more complex, the more detailed the estimate needs to be.
• Subcontractor Input: Accurate quotes from subcontractors are essential.

Estimating Methods

• Historical Cost Index (HCI): Adjusting past project costs to current values using indices.
• Current Cost Index (CCI): Adjusting for current location-specific costs.

Conceptual Estimating Example

• Estimate based on historical costs adjusted for size, location, and quality.
• Example calculations involving a motel project (base cost, size adjustment, location adjustment).

Conclusion

• Estimator's Judgment: Critical for ensuring accuracy and success in estimates.
• Opportunities: Estimating knowledge is valuable in various construction roles (architects, engineers, contractors, subcontractors, suppliers).

Example Estimations

• Conceptual Estimates: +/- 25% accuracy, used in initial planning.
• Square Foot Estimates: +/- 15% accuracy, useful for quick budgeting.
• Detailed Estimates: Highly accurate, used for final costing and moving forward with projects.