estimating Flashcards
what are the owners estimates and when are they performed
- conceptual estimate - before bid
- alternative design estimate - before bid
- owners engineers estimate - before bid
what are the contractors estimates?
- contractors bid estimate - before bid
- alternative construction methods - post bid
- changes/claims estimate - post bid
conceptual estimate
purpose: takeoff to get an initial idea, decide whether to proceed /w/ project
- feasability study
- hires A/E to provide order of magnitude estimate of cost
- they only know the general scope, very rough cost
- bldg - sq ft, road - km
alternative design estimate
purpose: exploring alternative options to find the most feasable
- A/E - $ based on previous experience
- rely on bid abstracts for cost info
- QTO
- at the end of the process the owner decides on an option
owners engineers estimate
purpose: a more accurate estimate developed by the owners engineer, cost against which to evaluate bids
- QTO
- past experience and bid abstracts
contractors bid estimate
purpose: to put forward a bid
- QTO (detailed)
- based on in-house cost data base (records)
- consider cnstrctn methods
- determines whether they make money, so it must be accurate
alternative cnstrctn methods
purpose: consider alternative construction methods to complete the project in order to maximize profit
- has been awarded job
- now, detailed review of how job is priced
- is there a better way to do the work? better cnstrcn method? - maximize profit
- the innovative contractor can save money
changes/claims estimate
- estimate the cost for additional work outside the scope of the original contract
- when a change order or claim is filed, the contractor has to determine how much he should charge
direct cost
any cost that can be associate with a discreet, physical part of a construction project
indirect cost
any cost that cannot be associated with a discreet, physical part of a construction project
bid formats - schedule of bid items bid vs lump sum bid
- includes the cost of bid items, and can also include lump sum
- lump sum includes lump sum only
what are the 7 horizontal categories of cost, and why are there 7 categories
- Labour (L)
- Permanent Materials (PM)
- expendable materials (EM)
- subcontractors (s)
- equipment operating expense (EOE)
- repair and service labor (RL)
- rental, depreciation, write-off (R)
to seperate based on risk. by seeing amounts in each category, the contractor can get a handle on how risky the project is
why are PM and EM broken up
to have a high risk and low risk material category
PM
any material falling within the neat lines of a DWG
Low Risk
- Not productivity related
- Can be accurately determined and is therefore not volatile
EM
any material falling outside of the neat lines on dwgs, plus temporary structures ie flasework, formwork, erosion ctrl
Less risk than direct labor but still potentially High Risk
Not particularly productivity related but can be very difficult to determine accurately, so always risky
In some projects can be highly volatile
subs
- coverered by performance bond, low risk
EOE
- FOG (fuel, oil, grease)
- tires
- small repair parts
- 3rd party overhaul
Highly related to kind of work being performed and can be fairly volatile on equipment intensive jobs
RL
Shares risk attributes of direct Labor but normally will not be as high a cost
R
Highly dependent on the type of construction project and
on the contractor’s business philosophy and equipment policy
In-house rental
Third party rental
Operated and Maintained (O&M rental)
With the exception of O&M rental this cost element is not
particularly volatile
O&M rental, however is highly productivity related and is just as volatile as direct labor
L
Highest Risk Cost Element
Highly productivity related
risk ranking from high risk to low risk
- L, RL, O&M
- EM
- EOE, R
- S, PM
soft subs
- if a sub has not bonded you are taking on the risk
- a sub you know has a good rep, but no bond and also the lowest bid
- confident work will get done, but still want to cover the risk
- difference to next highest bidder
productivity hedge
incase of an over estimation of productivity
event
cover the possibility of a specific event like a strike
7 vertical categories of cost
direct costs
indirect costs
escalation (labour, material, equipment) - accounting for costs increasing over time
interest - from financing, eg new equipment.
contingency - for unnexpected costs
markup
bond - bond premium, payed to surety. bond costs money
5 categories of indirect cost and 2 examples for each
salaried payroll - supervisors
time related overhead - rental of office trailer
non-time related overhead (a one time expense) - office furniture
insuarance and taxes - insurance and taxes
construction plant in and out - installing utilities
labour premium
(hrs paid-hrs worked)/hrs worked
overtime
a/b/c
a = rate on weekdays, applies only to hrs in excess of normal shift
b = rate on saturdays, applies to PAID shift hrs plus time over wrkd hours
c = rate on sundays and holidays, applies to PAID shift hrs plus time over wrkd hours
any hours on weekend are overtime
