Accurate building services estimating is vital to moving a construction project from concept to completion. Without it, you cannot provide an accurate quote or make a winning bid.
A cost estimate starts with reviewing the drawings and specifications. It also includes reviewing MEP requirements, evaluating structural needs and creating work packages.
Quantity Takeoff
Material takeoffs are one of the most important steps in preparing an estimate for a building project. It provides a foundation of information that is used to calculate costs for all project materials and labor. If the initial takeoff measurements and the resulting calculations are off in any way, it could impact the entire workflow of the project and lead to delays or budget overruns.
The traditional method of doing a material takeoff involves working from physical blueprints or construction drawings and using a variety of tools, including pencils, scale rulers, calculators and Excel spreadsheets. This method requires a significant amount of skill, patience and power of observation. It is also quite time-consuming, especially for larger projects that require an extensive material list.
Fortunately, technology has made it possible to conduct accurate and efficient material takeoffs through software programs. These tools can be used to scan a drawing or other construction document and then automatically identify all the elements in it. The resulting data can then be used to create a detailed listing of all the necessary construction materials and quantities.
For many estimators, the ability to complete a digital takeoff has become an essential tool for their success. The digital process is more accurate, faster and allows for a better understanding of the scope of work required. It can also help to identify potential cost saving opportunities and reduce risk throughout the estimating process.
Every team involved with the front end of a construction project should be conducting quantity takeoffs, regardless of the size of the project. It is the only way to ensure the accuracy of all project costs estimates.
Material takeoffs are a complex and critical step in the building services estimating process. They are a vital component of any project proposal, and should be completed by a qualified and experienced takeoff specialist. Often, large construction firms will retain a specialized takeoff company to perform this task for them. In addition, a number of commercial and residential builders are starting to offer their own takeoff software solutions to make the job easier.
Design Development
The design development stage (sometimes called a concept design stage) is where a lot of the significant work on construction projects takes place. This is because it involves establishing whether the building is needed, identifying what sort of building is required and agreeing any client-set constraints that may affect the design process.
Feasibility studies and options appraisals may include diagrams used to assess whether a potential site or building type is feasible, but they do not involve any design work. Similarly, initial schematics such as floor layouts, space requirements and the location of equipment should not be regarded as designs either.
At the design development stage, a significant amount of time is spent working out what can be built within a limited budget. This is often achieved through a combination of value engineering and reworking the original design.
The result is a detailed design that describes all the main components of the building and how they fit together, but which has not yet been packaged for tender (obtaining prices from contractors). Detailed designs should also provide sufficient information to complete applications for statutory approvals such as planning permission if necessary.
This stage is typically led by the lead designer, who should be a structural engineer or architect. However, other members of the design team can be involved where their expertise is required, such as a services engineer on a highly serviced building project. The key task at this stage is to ensure that a design has the right level of detail, without going overboard and spending extra money.
Preliminary Estimate
A preliminary estimate is a non-final figure at an early stage of the project that provides stakeholders with a general idea of the total cost. This type of estimate can be based on expert judgment or historical data and is often created in the pre-design phase, when little information about the project is available.
The accuracy of a preliminary estimate depends on the quality and completeness of the information it is based on. Gathering as much information as possible about the project scope, resource requirements, and timelines can help to mitigate the risk of inaccurate estimates. In addition, involving all stakeholders in the estimation process can ensure that all perspectives and expertise are taken into account. Finally, using multiple estimation methods can help to reduce the chances of errors due to human error.
There are many different methods used to create a preliminary estimate, including expert judgment, parametric estimation, and historical data analysis. Each method has its own strengths and weaknesses, and the best approach for a particular project may vary depending on the level of detail required and the availability of data and resources.
One of the most common types of estimates is the parametric estimate, which uses a standard rate per unit of work and multiplies it by the dimensions of the space to determine the estimated cost. For example, a contractor might use the cost of $100 per square foot for painting to calculate the estimated cost for building a shed in a backyard.
Another method is the expert judgment estimate, which involves consulting with experts to determine the costs and resources required for a particular project. This method can be helpful when there is limited available historical data or when the project is complex or unique. It is important to review the initial estimate to understand the assumptions and methodologies that were used, and to identify any areas that require further evaluation or revision.
In addition to identifying potential risks and reducing the risk of cost overruns, a preliminary estimate can also help stakeholders to better allocate resources. This can include determining what staff, equipment, and materials will be needed to meet project expectations, which can save time and money by avoiding costly mistakes.
Definitive Estimate
The project budget is one of the most important parameters in a project and can be a deciding factor whether or not a project should proceed. It is therefore essential for a project manager to be able to accurately calculate the cost of projects using various estimating techniques.
Estimates are required throughout the entire life cycle of a project, but as the project progresses, the level of detail and accuracy needed in a cost estimate increases. While ROM estimates are adequate for determining the feasibility of a project in its early stages, definitive estimates are needed later on to develop a cost baseline, create a budget, and plan resources and activities.
Definitive estimates require more detailed data than a ROM estimate, and are often known as bottom up or three point estimating. This type of estimating involves finding the cost of individual activities in a project and adding them up to obtain the project’s overall cost. While this technique is time consuming, it provides the most accurate results.
Alternatively, parametric estimation uses statistical models and historical data to determine the likely cost of an activity. This method is typically used for repetitive activities and tasks that can be broken down into quantifiable elements. However, the accuracy of a parametric estimate depends on the quality and relevance of the statistical data.
Once all construction information is available, a definitive estimate can be prepared by drawing up a bill of quantities (BoQ) and estimating the cost of each item in that BoQ. This estimate is a good representation of the final costs of the project and can be compared against the previous ROM and preliminary estimates to identify differences.
Ultimately, the more accurate an estimate is, the better a project manager can be at planning and budgeting for future projects. It is therefore a skill that attracts the attention of aspiring PMs and those taking a PMP certification course. However, even the most accurate estimates will have some variance – and this is normal. This should be reflected in the estimates by including a buffer or contingency in the estimate to ensure that the project can complete within budget.