Construction estimators are the key to every successful building project. They are the ones that balance profit, expenses and value to make sure everyone involved is happy.
To prepare an estimate, a construction estimator uses historical cost data and construction documents, materials takeoffs and direct costs to approximate job costs. This process leads to a bid estimate that will be used for budget control.
Building Plans
Whether you are an architect, engineer or builder, you know how important accurate project estimates are. The wrong estimate can spell disaster for your profit margins, jeopardizing the livelihood of your business. With fluctuating material prices and a competitive building environment, you need to be able to confidently submit bids and turn profits.
Estimators must consider a wide variety of possible expenses for every project, including direct costs which include labor, materials and equipment as well as indirect costs such as overhead and profit. Estimators must also ensure they are considering all site conditions that may impact construction. This can include anything from natural environmental elements to access limitations and soil conditions.
The first stage of cost estimating is known as a design estimate. This utilizes schematic design documents and basic drawings to provide an itemized cost breakdown. This type of estimate is used for making design decisions, evaluating alternative designs and securing project approvals.
The next stage of cost estimating is called a bid estimate. This is based on completed plans and specifications that are ready to be submitted for bid. This type of estimate will typically include unit prices for contractors’ overhead and profit in addition to the estimated construction cost for each item. It may also contain supplemental information such as window and door schedules, hardware and finish schedules or fixture and equipment schedules.
Materials Takeoffs
For many construction projects, builders will need to conduct material takeoffs — a process that determines the quantity of all physical materials needed for the job. This could include everything from concrete and timber to prefabricated materials like bricks, lengths of electrical wire, and light fixtures. Performing this task accurately requires detailed product descriptions, which are often provided by engineers and architects. This is important, as it ensures that the right type of materials are ordered and that their costs are accounted for in the estimate.
A builder’s materials takeoffs are crucial for their estimates and bids, as they inform not only the amount of materials required but also labor, equipment, and project timelines. If they’re off in any way, it can throw off the entire estimate and costing of a project.
Whether conducted manually with spreadsheets or digitally using software tools, accurate and thorough materials takeoffs are the foundation for a reliable construction estimate. It’s critical to follow industry standards and best practices for this step in order to maintain consistency and accuracy. This can help improve communication among project stakeholders, facilitate resource planning, and contribute to a successful construction project.
Errors in material takeoff can be caused by a number of factors. These may include omissions or miscalculations of dimensions and quantities, unit conversion mistakes, and inaccurate waste calculations. To avoid these errors, a builder should use a consistent method of measurement and cross-check calculations with teammates or colleagues. In addition, he or she should also consult project documentation to make sure that all dimensions and quantities are accurate.
Streamlined Operations
Construction cost estimates are a vital part of a construction project, and a skilled contractor’s ability to provide accurate figures is in high demand. Whether they’re used for ball park cost estimating in the early stages of planning or more reliable estimates to control budgets prior to construction, these figures can help builders and their clients stay on track with a project’s expected costs.
Professional construction estimators follow a similar process when creating project estimates, regardless of who they work for. The goal is to come up with an accurate price for a particular construction project in either a competitive or negotiated bidding process. Estimating too low risks losing the bid, while estimating too high could result in unprofitable projects for both the builder and their clients.
The first step in the estimating process is reviewing a project’s drawings and specifications. This will give estimators a broad sense of the building’s materials needs, equipment requirements, and other details that are essential for a project’s success.
Depending on the project type, it’s also common for estimators to perform a site visit before submitting a bid. This can help them get a better understanding of the project’s scope and site conditions, which will in turn influence their final estimate. A site visit also allows estimators to evaluate structural drawings and assess the building’s mechanical, electrical, and plumbing (MEP) requirements.
Risk Management
The process of preparing construction estimates involves multiple levels of detail and a wide range of factors that need to be considered. Builders rely on accurate estimates to win projects and make a profit, so it’s crucial that the estimating team understands their responsibilities.
During the bid estimation process, estimators use construction documents, take-offs and direct costs to approximate project cost. They then prepare a bid package to be submitted in response to a bid request from the client. The estimate needs to be as detailed as possible so that the builder can offer a competitive price and win the project.
It’s also important for estimators to account for overhead and profit, as well as contingency. Overhead expenses are a necessary part of running any business, while profit represents the fee that a contractor earns on their contract. This money can be used to continue growing the company or reinvest in future projects. Contingency is a portion of the budget set aside to cover unexpected expenses or overruns.
Identifying risk, assessing all potential solutions and devising a plan to mitigate those risks is essential for a successful building business. However, sometimes avoidance isn’t an option. In those instances, accepting the risk may be a better choice. Risk management is an ongoing process, so it’s important to monitor risks and evaluate them on a regular basis.