A pre tender estimate is an important tool that helps the project team determine the cost and schedule of the construction. If the estimated costs are higher than anticipated, the project will have to make adjustments to the budget. But if the estimates are low, the project will be able to avoid costly mistakes, or may even save money. So what are the factors to consider in determining a pre tender estimate?
Expertise of consultants
The accuracy of pre tender cost estimates is a critical factor in the success of a project. This is one of the most difficult tasks in project management. It is important to hire a consultant who has a great deal of expertise in the industry.
There are several factors that can influence the quality of your estimate. If you choose a consultant with expertise in your industry, you can reduce the amount of time it takes to get your project completed. But there are also risks associated with hiring a consultant. You may not receive accurate information or your consultant may make recommendations that are not relevant to your project.
In addition to having a strong expertise in your industry, you should ensure that your consultant has a good understanding of your needs. For instance, if your project will be taking place in a foreign country, it is crucial to hire a consultant who is familiar with the culture of that area.
In addition, consultants should be able to see the big picture. They should also have a comprehensive knowledge of the local industry. A professional estimator will have access to reliable cost references, and can provide the information you need to make an informed decision.
The results of the study show that the top five factors affecting the accuracy of a pre-tender cost estimate are detailed specifications, clear and detailed drawings, a consultant’s experience, the experience of the project team and the amount of money spent on materials. However, these factors are just a small sample of the many factors that can affect the accuracy of a cost estimate.
Quality of information and flow requirements
The best pre-tender estimate should include all the pertinent elements. This includes accurate quantities, detailed specifications, and accurate labour output. Contractors should also contact potential subcontractors and suppliers, and use up-to-date market rates to build up their own prices.
A good pre-tender estimate should also feature a master checklist of items to be included. For example, contractors should take note of the size and type of structures. They should also obtain quotations for major items, such as heavy machinery. In addition, they should obtain three quotes for each. Finally, they should monitor the performance of their estimates to avoid over or under-estimating costs.
Another important measure is the content of the disputes resolution methods clause. Several studies have ranked this as the most important factor. It is important to understand that different jurisdictions will have different standards. Similarly, permit conditions differ according to location. These factors can make or break your cost estimate.
Also, there are other factors that may be overlooked. For instance, a poor understanding of materials will impact the accuracy of your cost estimate. But the most important item is clear identification of the project’s requirements before beginning the estimating process. Once a contractor knows what he or she needs, it is easier to identify the cheapest and most efficient methods of achieving those goals.
To be sure, there are many other factors affecting the quality of the most expensive estimates. But these five were the most important to consultants and clients alike.
Project team’s experience of the construction type
A team based approach to a large construction project is the best way to go, ensuring that your team members are on the same page, from the top down, in order to deliver a high quality and efficient product on time and on budget. It’s not just the contractors who are responsible, however, as the design and planning process must be coordinated across the entire project in order to avoid common pitfalls.
For instance, a construction project is regulated at a state level, so it’s essential that the project has the appropriate building code. In addition, states typically require that the plans and specifications for the project be prepared by a licensed architect. Moreover, the commissioning authority needs to be on board to ensure that the systems designed and installed operate as they were intended. The key to a smooth transition from concept to completion is clear communication and an open line of sight.
To get there, the project has to be reengineered to include a robust and standardized construction schedule. This requires the construction manager to be cognizant of resources and budget allocations. During the design and planning phase, the team needs to devise a realistic schedule for each phase to enable the team to plan and deliver the project on time and on budget.
Lastly, the team has to have a solid Quality Control Plan. A proper QC plan entails checking the accuracy of measurements, measuring and recording progress, evaluating the quality of workmanship, and documenting the results.
Complexity of design and construction
Pre-tender cost estimating is a major task in project management. The accuracy of the estimate affects the overall success of the project. Several factors play a role in this process. This study is an attempt to identify those factors.
Project complexity is an important factor in determining pre-tender cost estimates. It includes interdependencies between the construction stage, the project organisation and the technical complexity of the task.
The size of the estimating team is another factor. A contractor with a reliable supplier may save based on the economics of scale.
Construction costs are often understated. However, overestimating can cause greater actual expenditures. Estimates can be inaccurate if there are errors in the analysis.
Professional expertise is also a major determinant in achieving accurate cost estimating. Moreover, historical cost data is an essential element for effective cost estimation. These data should be obtained from reliable sources.
Another factor that influences pre-tender cost estimates is the location of the project. The clients and consultants had similar views on this factor. They believed that the location of the project has little influence on the accuracy of the estimate.
Another factor that has a direct impact on the accuracy of the estimate is the procurement form. Some forms of procurement can be very effective, but others can cause a reduction in the accuracy of the estimate.
Clients and consultants agree on the order of the cost estimate factors. Six of the ten highest ranked factors are related to the consultant or the project, and the other three are related to the clients or the external factors.
Low visibility factors
The pre-tender cost estimating process is a lengthy and tedious affair. In order to avoid the pitfalls, clients should ensure that they have a reputable cost reference and hire a capable technical staff. To achieve a smooth ride, they should also be aware of the best ways to increase efficiency in their procurement process. As well as implementing cost reduction measures, they should monitor the performance of their estimates in real time. Among other things, they should avoid using the same estimator for multiple projects.
To determine the relative strengths of various factors in the pre-tender cost estimating process, a survey was conducted. The results revealed that the client organisation had a higher response rate than the consultancy firms. A larger proportion of respondents exhibited a favourable response bias. It was also the case that most organizations had a mixed bag of experience. However, the quality of the data remained largely consistent, with no clear winner in terms of overall performance.
The aforementioned questionnaire was based on a literature review and five face-to-face interviews with clients. Although the questionnaire was not a formal survey, it is still a fair estimate of the total number of clients and consultants. Some respondents claimed to have 20 years of experience in the field. The sample size was sufficient to enable a statistically valid comparison of factors affecting the overall quality of a pre-tender cost estimate.