Estimating Flashcards
3 steps of estimating from owners side
- conceptual
- Alternative design estimate
- owner’s engineers estimate
3 steps of estimating from contractor’s side
- Contractor’s estimates
- Alternative construction method
- Changes/Claims
Steps of estimating: Conceptual
-Feasibility study
-Owner hires A/E to provide an order of magnitude estimate of the cost
-Rough cost estimate
-owner has a general idea of what the owner can get with their money
Steps of estimating: Alternative design estimate
-evaluating options
-A/E comes up with cost estimates based on previous experience and relies on bid abstracts for cost information
-Quantity Takeoff
-Design to a level where the owners can make a choice
-At the end of the process, the owner decides on which option he wants to go with
-drawings and specs
Steps of estimating: Owner’s Engineers estimate
-Provides a baseline cost to evaluate other bids
-Quantity takeoff from engineers
-Engineers rely on past experience of bid abstracts
( Owners’ bid estimate (so that owners know what to expect) )
Steps of estimating: Contractor’s Estimates
-(MOST DETAILED) b/c if it’s inaccurate, the contractor will lose money
-Contractor’s bid estimate
This includes a detailed quantity takeoff
-Based on the in-house cost database
-Considers construction methods (may not necessarily be the most efficient equipment for the job, but is it worth buying new equipment?) Contractors decide
Steps of estimating: Alternative Construction Method
-Has been awarded the job
-Now detailed review of how the job is priced
-Is there a better way to do the work —> a better construction method?
-to maximize profit
Steps of estimating: Changes/Claims
-Change order: outside the scope of the original contract. The contractor and owner sign off on it.
-Change directives: the contractor has to perform the work the owner has requested.
-Needs to be priced
-Claims: when the contractor thinks that they are not getting paid for something that they think should be paid for
Contractor’s Bid Estimate Horizontal Breakdown (highest to lowest risk)
- Labour
- Repair and service labour
- Operated and maintained cost
- Expendable materials
- Rental
- Equipment Operating expenses
- Subcontractors
- Permanent Materials
Contractor’s Bid Estimate vertical Breakdown
- Direct costs (Physical construction)
- Indirect cost (management)
- Escalation (inflation)
- Interests
- Markup (general risk, profit, home office, general administration)
- Contingency (identified vs unidentified)
- Bond costs (bid bond)
What is expendable material? (EM)
Any material falling outside of the neat lines on drawings
+temporary structures (don’t forget that this is included in the definition)
(e.g. silt fences, formwork)
What is equipment operating expenses? (EoE)
- Fuel, oil, and grease (FOG): lubricants needed for machinery (NOT GAS, don’t forget)
- Tires (can contribute a substantial expense)
- Small repair parts
- 3rd party overhaul
What is Repair + Service Labour (RL)?
A high-risk cost type
1. Direct cost
2. Why break them out? To know how much money goes towards keeping equipment operating
What are the two types of contingencies?
Identified and unidentified
What are Identified contingencies?
- Soft Subs
a contractor with no performance bond
Good reputation with the lowest bid but no performance bond. The owner takes on the risk. And contingency is to prepare for the risk - Productivity Hedge
Productivity-related, in case work, doesn’t get done on time - Event
Prep in case there is a workers’ strike. Or a specific event.
