Menu Close

Construction Estimating – A Career Path

Construction estimators need a detail-oriented, analytical approach to their work. They must also be able to address discrepancies between the technical drawings and what actually needs to be built on site.

A high school diploma or a trainee position with a construction firm can lead to a career as an estimator. However, some companies prefer candidates with a college degree.

Project Management

Cost estimating involves forecasting all the project costs needed to complete a specific scope of work. Professional estimators do this by analyzing material and labor costs, as well as indirect field and overhead expenses. Those calculations then take into account the anticipated profit margin and contingency.

A rough order of magnitude estimate, which is usually based on the conceptual design and historical cost per square foot calculations, establishes ballpark costs and helps determine a project’s feasibility. It also helps set the client’s expectations.

As the design evolves, more detailed estimates help balance the architect’s design intentions with budgetary constraints. Estimators often perform a site visit to better understand the actual conditions that will impact project costs and materials.

During construction, contractors must factor in the cost of materials, labor, equipment, indirect field costs and overhead expenses. They also include the estimated cost of the project’s bonding and insurance coverage.

Once the estimate is finalized, it’s ready for bidding. The final sales price covers all direct and indirect project costs, as well as the estimated profit margin and contingency. It also includes any fees that have already been paid to third parties for design, engineering and other services. Estimators typically add 5-10% of the contract price for contingency. This ensures that the contractor is able to pay for any unexpected costs during construction and still turn a profit.

Bill of Quantities

Whether they are working on projects worth millions of dollars or simply bringing in new business for their construction businesses, estimators must be able to deliver accurate cost estimates that meet client needs and specifications. Moreover, they must be able to pivot quickly when the project plan takes unexpected turns.

The process of preparing a bill of quantities, or BoQ, is a critical step in construction estimation. This document is used to calculate all the costs involved in a project, from materials and labor to indirect field and overhead expenses. It also includes a contingency amount, which is an allowance for unexpected expenses that could arise during the construction phase.

A well-prepared BoQ helps contractors understand the scope of work and provides an opportunity for them to submit competitive bids. It also promotes transparency in the bidding process by ensuring that all contractors reference the same information.

The preparation of a bill of quantities requires a thorough understanding of the design documents. It also requires the use of specialized software to perform quantity take-offs and to provide the required level of detail. Moreover, it must take into account all the direct and indirect costs, such as office leases, vehicle running costs and capital expenses. In addition, the estimating team must consider insurance and bonding costs, as they are necessary to cover any potential loss on a project.

Estimating Software

Many construction companies and builders use estimation software to automate the estimating process. This reduces the likelihood of miscalculation and errors that could lead to a job not being won, or extra costs being incurred due to price fluctuations or unanticipated labor increases. It also helps prevent overestimating materials, which can result in purchasing more than is required. This excess is wasted money if the contractor cannot use it on other projects or sell it.

Choosing the right estimation software requires careful consideration. Ensure that the solution is capable of handling the specific needs of the business and can be customized to meet particular requirements. Look for features such as cost estimating, digital takeoff, bid day analysis, and project management and reporting capabilities.

The type of estimating software chosen depends on the needs of the business and its clients. A general contractor, for example, is likely to prefer a more comprehensive solution that covers all of the bidding and estimating processes. This software typically includes tools such as a parts database with up-to-date pricing, a client database, and the ability to create an extensive range of reports.

As the job of an estimator is highly specialised, the qualifications needed to start in the role vary depending on the area of expertise. Some companies provide training to candidates looking to enter the industry, and an apprenticeship with a construction company is also a popular route into the sector. A university degree in subjects such as structural or civil engineering, construction or quantity surveying is also beneficial.

Estimating Techniques

The estimating process relies on a series of calculations and a number of different estimating techniques. Each technique has its own set of advantages and disadvantages, and the estimator must be able to choose and use the right one for a particular job. For example, a bottom-up estimate uses the project’s work breakdown structure (WBS) to determine durations for individual tasks, and then adds those durations together to create an overall cost estimate. This method is highly accurate, but it can be time consuming and prone to errors due to fatigue or carelessness.

A top-down estimating approach uses a timeline to break down the overall project into smaller phases, work activities and tasks. A top-down estimate can be very accurate, but it can also be time consuming and prone to error due to fatigue or carelessness.

Another estimating technique is parametric modeling, which applies historical cost data to a project’s scope and schedule. This method is very accurate, but it can be time consuming, especially for large projects with multiple layers of work breakdown structures.

A more analytical estimating technique is the bottom-up approach, which calculates building costs from first principles. This type of estimation involves comparing actual building costs to predicted building costs using predictors such as productivity figures for various trades, hire rates for machinery and construction labor rates. This method is very accurate, but it’s prone to miscalculations if the estimator doesn’t have their finger on the pulse of current construction market conditions.