Estimating

Question 1

What is a Conceptual Estimate

Answer 1

• done when project is first conceived before the design begins
  -establishes rough budget for fiscal planning
• calculated using major project features
• refers to cost of similar facilities (with adjustments)

Question 2

What is a Preliminary Estimate

Answer 2

• done when conceptual design completed
  -need to estimate total budget for financial commitment
• calculated based on historical rates (ex. for a building : total area x cost/m^2, bridge: total length x cost?m etc)
• +- 20% accuracy, done by owner

Question 3

What is an approximate Estimate

Answer 3

• done when design is finalized, for more accurate financing required
• use as guideline for bid selecting and monitor during construction
• owner hires engineers or quantity surveyors to estimate cost
• use unit costs and required amount of work for estimation
• +- 5% accuracy, done by owner’s engineer/quantity surveyor

Question 4

What is a detailed bid estimate?

Answer 4

• done when design finalized and preparing for a bid
• contractor provides estimate of project based off owner
  calculated using unit cost in work items and required amount of work
• reflects contractor’s desire to win project
• += 2.5-5% accuracy, done by GC

Question 5

What costs are under Direct vs Indirect costs and how much percent do each take?

Answer 5

Direct cost (65-90%):
- Labour cost
- Material cost
- Equiptment cost
- Subtractor cost

Indirect cost (10-35%):
- Project overhead
- Markup

Question 6

What are Labor Costs

Answer 6

Direct Labor costs: costs that are paid to field workers

Indirect Labor costs: costs that are additional to direct costs (payroll taxes, insurance, fringe benefits etc), usually = 25-50% of direct labour cost

Question 7

What are Material costs

Answer 7

All costs in procuring materials (delivery, storage, inspection)

Contractor must:
- produce own materials (use own estimate) OR purchase materials from manufacturer
- include cost for storage, handling and installation of owner supplied or designated materials (excluding cost for purchasing materials)

Question 8

What are Equipment Costs

Answer 8

All the costs of renting equipment

Diff Cost Rates:
- cost/hour (eg. tractors, scrapers)
- cost/unit installed ( eg. concrete mixing)
- cost/week or month (eg. scaffolds)

Accuracy of cost estimate depends on equipment importance
- Major equip = very detailed analysis
- Minor equip (power tools concrete vibrator) = standard cost allowance
- Minor equip (hand tools, water hose) = lump sum allowance as % of direct labour cost

Question 9

What are Subcontract Costs

Answer 9

GC subcontractor portions of work to subcontractors

Cost of subcontractors finalized before final bid

GC must review and select SC (like owner selects GC)

Question 10

What is Project Overhead cost

Answer 10

All costs that don’t pertain directly to construction workers (5-15% total project cost)

Refer to list in pg.17 of Lecture 8

Question 11

What are Markup Costs

Answer 11

Subjective

• 5-20% total project cost
  -corporate overhead, contingency and profit
• reflects contractors appraisal b/w being lowest bidder and having a higher chance to make profit

Factors:
- desire for work
- competition
- market conditions
- relationship with owner
- magnitude of risks and opportunities