- Making investment decision in the conceptual stage.
- Negotiate and finalize the contract at the implementation phase.
- To implement cost control measures.
Contractor‘s Purpose of Estimate
- Determine project cost and profit.
- To Implement cost control measure.
- To develop data base for that can be used for future project.
Engineer‘s Purpose of Estimate
- Provide the owner with probable estimate.
- Evaluate alternatives.
Comparison of Contractor‘s and Engineer‘s Estimator
Fig: Construction cost Estimation
TYPES OF ESTIMATES
- Unit price
- Assembly or Conceptual Cost
- Detailed estimate
Each phase of a project life cycle requires a different type of estimate–each estimate requires different types of information.
- Preliminary Estimate- “Order of Magnitude”
- A cost prediction based solely on size and/or capacity of a proposed project.
- Before any engineering or design is completed.
- Rely on broad data from already executed similar project
- relate cost in rupees to the main capacity/size parameter
- number of beds in hospital
- square feet of office space
- number of students in school
- Allows a quick determination of the feasibility of a project
- A quick screening on alternatives, etc. (e.g., should it be a concrete building or a steel building !).
- Ranking alternatives
- Evaluate economics and financial feasibility
- As a check on more detailed estimates
2. Unit Price Estimate
Unit prices are obtained from data on projects already performed.
- Cost of labor, material, and equipment for all units of work are added together and divided by the number of units involved.
3. Assembly or Conceptual Estimate
- Performed when conceptual design decisions are being made.
- Work package concept can be used to determine the element or assembly to be studied
- We need a breakdown of cost of a completed project into its functional elements to:
- Find the relationship between element cost and project cost
- Distribution of cost between constituent elements (sq. feet of _____)
4. Detailed (Definitive )Estimate
- Prepared after drawings and specification are completed.
- Requires a complete quantity takeoff based on drawing and the complete set of contract documents
- Need information on labor rate "productivity", material cost, cost of renting or purchasing equipment
Variation Factors in Estimating
- We base our estimate on the cost of existing projects that were built in the past
- Price-level changes over time
- We need to project costs of future projects
- Many organizations publish construction cost data on regular basis.
- Used to update old cost information
- To update known historical costs for new estimates
- To estimate replacement cost for specific assets
- To provide for contract escalation
- They represent composite data, average of many projects.
- They fail to recognize technological changes.
- There is a reporting time log.
To update old cost information to current date
Cost of new facility = cost of old facility x (new cost index/old cost index)
To predict future cost
F = P (1 + i)n
F = future cost
P = present cost
i = predicted rate of cost escalation per period
n = number of periods (years)
- Some factors affecting cost in different locations are:
- Transport cost
- Labor supply and local productivity
- Codes and local inspection
- Construction costs also vary in different regions of the USA.
- ENR and Means publishes periodically the indices of local construction costs in the major cities.
- As the quantity built increases, the unit cost decreases,
Size Factor = (Proposed Size/Comparison Size)
- UCM = Unit Cost Multiplier
UCM = SF-1
5. Other Factors
Hard to quantify but should be evaluated
- Soil condition
- Weather Condition
Building Material Estimators (Win)