Building construction estimating is the determination of probable construction costs of any project. Many items influence and contribute to the cost of a project; each item must be analyzed, quantified, and priced.
Because the estimate is prepared before the actual construction, much study and thought must be put into the construction documents.
The estimator who can visualize the project and accurately determine its cost will become one of the most influential persons in any construction company.
For projects constructed with the design-bid-build (DBB) delivery system, contractors must submit a competitive cost estimate. As a result, the competition in construction bidding is intense, with multiple firms vying for a single project.
To stay in business, a contractor must be the lowest-qualified bidder on a certain number of projects while maintaining an acceptable profit margin.
This profit margin must provide the general contractor with an acceptable rate of return and compensation for the risk associated with the project.
Because the estimate is prepared from the working drawings and the project manual for a building, the ability of the estimator to visualize all of the different phases of the construction project becomes a prime ingredient in successful bidding.
The working drawings usually contain information relative to the design, location, dimensions, and construction of the project. In contrast, the project manual is a written supplement to the pictures and includes information about materials and artistry, as well as information about the bidding process.
The working drawings and the project manual constitute most of the contract documents, define the scope of work, and must be considered together when preparing an estimate. Consequently, the two complement each other and often overlap in the information they convey.
The bid submitted must be based on the scope of work provided by the owner or the architect. The estimator is responsible for including everything in the drawings and the project manual in the submitted bid.
Because of the complexity of the drawings and the project manual, coupled with the potential cost of an error, the estimator must read everything thoroughly and recheck all items. Initially, the plans and the project manual must be checked to ensure they are complete.
Then the estimator can begin the process of quantifying all of the materials presented. Every item included in the estimate must contain as much information as possible.
The quantities determined for the estimate will ultimately be used to order and purchase the needed materials. The estimated quantities and their associated projected costs will become the basis of project controls in the field.
Estimating the ultimate cost of a project requires the integration of many variables. These variables fall into either direct field costs or indirect field costs.
The indirect field costs are also referred to as general conditions or project overhead costs in building construction. The direct field costs are the material, labor, equipment, or subcontracted items that are permanently and physically integrated into the building. For example, the labor and materials for the foundation of the building would be a direct field cost.
The indirect field costs are the cost for the items that are required to support the field construction efforts. For example, the project site office would be the cost of a general condition. In addition, factors such as weather, transportation, soil conditions, labor strikes, material availability, and subcontractor availability need to be integrated into the estimate.
Regardless of the variables involved, the estimator must strive to prepare as accurate an estimate as possible. Since subcontractors or specialty contractors may perform much of the work in the field, the estimator must be able to articulate the scope of work in order for these companies to furnish a price quote.
The complexity of an estimate requires organization, the estimator’s best judgment, complete specialty contractors’ (subcontractors’) bids, accurate quantity takeoffs, and accurate records of completed projects.
The design-build (DB) and construction-manager (CM) project delivery systems are gaining popularity. In the design-build delivery system, the contractor acts as both the designer and the general contractor.
In the construction manager delivery system, the contractor is involved in the design process, providing expertise in construction methods and costs, as well as managing the construction process.
Both of these delivery systems require the contractor to provide cost estimates for the proposed project throughout the design process.
At the conceptual stage of the project, the contractor prepares a cost estimate based on the project’s concept. This is known as a conceptual estimate. When performing a conceptual estimate, typically, drawings are not available or they are very limited.
What exists is often a vague verbal or written description of the project scope, which may be accompanied by a few sketches. When preparing this type of estimate, the contractor makes assumptions about virtually every aspect of the project.
The conceptual estimate is used early in the design process to check to see if the owner’s wants are in line with their budget and are often used as a starting point to begin contract negotiations.
During the design process, the contractor prepares and maintains a cost estimate based on the current but incomplete design. This is often referred to as a preliminary estimate.
In addition, the contractor may prepare estimates that are used to select between building materials and to determine whether the cost to upgrade the materials is justified.
What all these estimates have in common is that the design is incomplete. Once the design is complete, the contractor can prepare a detailed estimate for the project.
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Construction Estimating: Types of Estimates
The required level of accuracy, coupled with the amount of information about the project that is available, will dictate the type of estimate that can be prepared. The different estimating methods are discussed below:
1. Detailed Estimate
The detailed estimate includes the determination of the quantities and costs of everything that is required to complete the project. This includes materials, labor, equipment, insurance, bonds, and overhead, as well as an estimate of the profit.
To perform this type of estimate, the contractor must have a complete set of contract documents. Each item of the project should be broken down into its parts and estimated. Each piece of work that is to be performed by the contractor has a distinct labor requirement that must be estimated.
The items that are to be installed by others need to be defined and priced. Caution needs to be exercised to ensure that there is an agreement between the contractor and the specialty contractor as to what they are to do and whether they are to install or supply and install the items. In addition, there needs to be an agreement about who is providing support items such as cranes and scaffolding.
The contractor is responsible for making sure that the scope of work is divided among the contractor and subcontractors so that there are no overlaps in the individual scope of work and that everything has been included in someone’s scope of work.
The detailed estimate must establish the estimated quantities and costs of the materials, the time required for and costs of labor, the equipment required and its cost, the items needed for overhead and the cost of each item, and the percentage of profit desired, considering the investment, the time to complete, and the complexity of the project.
2. Assembly Estimating
In assembly estimating, rather than bidding on each of the project’s individual components, the estimator bids on the components in groups known as assemblies. The installation of the components of an assembly may be limited to a single trade or may be installed by many different trades.
An example of a simple assembly would be a residential light switch, which includes a single gang box, a single-pole switch, a cover plate, two wire nuts, and an allowance of 20 feet of NM-B 12 gauge wire. The entire assembly would be installed by an electrician.
A residential electrical estimate could be prepared using assemblies for the switches, outlets, lights, power panels, and so forth rather than determining the individual components.
An example of a complex assembly would be a metal-stud, and gypsum-board partition wall, which would include a bottom track, metal studs, top track, drywall, screws, tape, joint compound, insulation, primer, paint, and other miscellaneous items needed to construct the wall. This assembly would be installed by multiple trades.
Many high-end estimating computer programs, such as WinEst and Timberline, allow the user to prepare detailed estimates by taking off assemblies.
For the switch assembly, the estimator would take off the number of switch assemblies needed for the project, and the software would add one single-gang box, one single-pole, one cover plate, two wire nuts, and 20 feet of NM-B 12 gage wire to the detailed estimate for each switch assembly. This simplifies the estimating process and increases the productivity of the estimator.
Assembly estimating is also helpful for conceptual and preliminary estimates. By using broad assemblies, an estimate can be prepared quickly for an entire building.
For example, an estimate for a warehouse can be prepared by using assembles for the spot footings, the continuous footings, the foundation wall, the floor slab (slab, reinforcement, granular base, vapor barrier, and fine grading), the exterior wall, personnel doors, overhead doors, joist and deck roof structure (including supports), roof insulation, roofing, wall cap, skylights, bathrooms, fire sprinklers, heating, lighting, and power distribution.
This type of estimate can be prepared in hours instead of spending days preparing a detailed estimate. The trade-off is that this type of estimate has many broad assumptions and is less accurate. This type of assembly estimating is good for estimates prepared with limited drawings, to compare design approaches, and as a check of a detailed estimate that seems way off.
If the assembly price comes from previously completed projects, it is assumed that this project is identical to the completed projects. That assumption is clearly not valid in the construction of buildings.
Weather conditions, building materials, and systems as well as design and construction team members change from project to project, all adding to the uniqueness of every project. Skill and judgment must be used while preparing this type of assembly estimate to ensure that proper adjustments are made by taking into account the varying conditions of each project.
3. Foot-Square Estimates
Square-foot estimates are prepared by multiplying the square footage of a building by a cost per square foot and
then adjusting the price to compensate for differences in the building heights, length of the building perimeter, and other building components. In some cases, a unit other than square footage is used to measure the size of the building.
For example, the size of a parking garage may be measured by the number of parking stalls in the garage. The information required to produce a square-foot estimate is much less than is needed to prepare a detailed estimate.
For example, a preliminary set of design drawings (a single-line floor plan and key elevations) would have the dimensions that are necessary to prepare a square-foot estimate. Square-foot estimates are helpful to check whether the project, as designed, is within the owner’s budget.
Like an assembly estimate that uses broad assemblies, care must be exercised while preparing a square-foot estimate to ensure that the projects used to determine the cost per square foot are similar to the proposed project.
Companies such as R.S. Means publish annual guides (such as Square Foot Costs) that contain a range of unit costs for a wide variety of building types. These guides provide a number of adjustments to compensate for varying building components, including the city where the project is located.
4. Parametric Estimates
Parametric estimates use equations that express the statistical relationship between building parameters and the cost of the building. The building parameters used in the equation may include the gross square footage, number of floors, length of the perimeter, percentage of the building that is common space, and so forth.
For an equation to be usable, the parameters used in the equation must be parameters that can be determined early in the design process; otherwise, the equation is useless.
Parametric estimates are similar to square-foot estimates; however, the equations used in parametric estimates are more complex and may use log functions, ratios of parameters, and multiplication of parameters.
Parametric estimating is useful for preparing conceptual estimates based on assumptions of key building parameters or estimates based on early designs. As with square foot estimates and assembly estimates that use broad assemblies, care must be taken to ensure that the proposed project is similar to the projects from which the equation has been derived.
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Model Estimating
Model estimating uses computer models to prepare an estimate based on a number of questions answered by the estimator. Model estimating is similar to assembly estimating, but it requires less input from the estimator.
For example, an estimate may be prepared for a warehouse by answering the following questions:
- What is the length of the building?
- How many bays are along the length of the building?
- What is the width of the building?
- How many bays are along the width of the building?
- What is the wall height above the grade?
- What is the depth (from the grade) to the top of the footing?
- What is the floor thickness?
- Do you want wire mesh in the slab?
- How many roof hatches do you want?
- How many personnel doors do you want?
- How many and what size overhead doors do you want?
- How many and what size of skylights do you want?
- Do you want fire sprinklers?
- What bathroom facilities do you want (separate male and female, unisex, or none)?
On the basis of the answers to these questions, the model prepares a preliminary estimate for the project. Logic is built into the model, such that the model selects the necessary components for the estimate based on the answers to the questions.
For example, the size of the spot footings in the center of the building that support the roof and their costs are selected based on the area of the roof the footings support, which is equal to the width of a bay multiplied by the length of a bay.
The length and width of the bays are calculated from the first four questions. A simple model estimate (Warehouse.xls) for a warehouse is provided on the companion disk.
This model makes many assumptions as to the design of the warehouse, such as assuming the exterior wall is constructed of concrete masonry units (CMU). The model ignores the site and excavation cost, which needs to be added to the estimate from the model to get a complete estimate.
Estimating models may be complex and may prepare a detailed estimate for the entire project, or the models may be simple and prepare a preliminary estimate for part of a project.
As with square-foot estimates, assembly estimates that use broad assemblies, and parametric estimates, care must be taken to make sure that the proposed project is similar to the projects from which the model was developed.
Project Comparison Estimates
Project comparison estimates are prepared by comparing the cost of a proposed project to a completed project. When preparing an estimate using this method, the estimator starts with the costs of a similar project and then makes adjustments for differences in the project.
For example, an estimate for the buildings in an apartment project may be prepared from a project built using the same plans during the previous year in a nearby city. In this example, the prices from the completed project need to be adjusted for inflation, changes in the availability and cost of labor, changes in the plans made to meet city codes, and so forth.
In most cases, the site should be estimated using another method because of the many differences in site conditions. As with other estimating methods that do not prepare a detailed list of materials, care must be taken to ensure that the proposed project is similar to the completed project.
Estimating Opportunities
For anyone who is not aware of the many opportunities in the estimating field, this section will review some of the areas in which knowledge of estimating is necessary.
Generally, knowledge of the procedures for estimating is required by almost everyone involved in or associated with the field of construction. From the estimator, who may be involved solely with the estimating of quantities of materials and the pricing of the project, to the carpenter, who must order the material required to build the framing for a home, this knowledge is needed to do the best job possible at the most competitive cost.
Others involved include the project designer, drafters, engineers, contractors, subcontractors, material suppliers, and material representatives. In the following sections, a few of the estimating opportunities are described.
- Architectural Offices
The architectural office will require estimates at three design stages: preliminary (rough square foot or project comparison costs), cost evaluation during drawing preparation (usually more accurate square foot or assembly costs), and a final estimate (usually based on material and installation costs, to be as accurate as possible).
For projects built using the design-build or construction manager deliver systems, the preliminary estimate is often used during negotiation with the general contractor. Once the general contractor is hired, the general contractor’s estimator will prepare the remaining estimates.
In large offices, the estimating may be done by an estimator hired primarily to do all the required estimating. In many offices, the estimating may be done by the chief drafter, head or lead architect, or perhaps someone else in the office who has developed the required estimating skills. There are also estimating services or consultants who perform estimates on a for-fee basis.
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- Engineering Offices.
The engineering offices involved in the design of building construction projects include civil, structural, mechanical (plumbing, heating, air-conditioning), electrical, and soil analysis.
All of these engineering design phases require preliminary estimates, estimates while the drawings are being prepared, and final estimates as the drawings are completed. They are prepared in the same way estimates are prepared by the architects.
- General Contractors.
For design-bid-build projects, the general contractor makes detailed estimates that are used to determine what the company will charge to do the required work.
The estimator will have to take off the quantities (amounts) of each material; determine the cost to furnish (buy and get to the site) and install each material in the project; assemble the bids (prices) of subcontractors; as well as determine all of the costs of insurance, permits, office staff, and the like.
In smaller companies, one person may do the estimating, whereas in larger companies several people may work to negotiate a final price with an owner or to provide a competitive bid.
On projects built using the design-build or construction manager deliver systems, the contractor’s scope of work involves providing assistance to the owners, beginning with the planning stage, and continuing through the actual construction of the project.
In this type of business, the estimators will also provide preliminary estimates and then update them periodically until a final price is set.
- Estimating with Quantities Provided.
Estimating for projects with quantity surveys involves reviewing the specifications for the contract and material requirements, reviewing the drawings for the type of construction used, and assembling the materials used.
The estimator will spend part of the time getting prices from subcontractors and material suppliers and the rest of the time deciding how the work may be most economically accomplished.
- Subcontractors.
Subcontractors may be individuals, companies, or corporations hired by the general contractor to do a particular portion of the work on the project.
Subcontractors are available for all the different types of work required to build any project and include excavation, concrete, masonry (block, brick, stone), interior partitions, drywall, acoustical ceilings, painting, steel and precast concrete, erection, windows, metal and glass curtain walls, roofing, flooring (resilient, ceramic and quarry tile, carpeting, wood, terrazzo), and interior wall finishes (wallpaper, wood paneling, and sprayed-on finishes). The list continues to include all materials, equipment and finishes required.
The use of subcontractors to perform all of the work on the project is becoming an acceptable model in building construction. The advantage of this model is that the general contractor can distribute the risk associated with the project to a number of different entities. In addition, the subcontractors and craft personnel perform the same type of work on a repetitive basis and are, therefore quasi experts in their niche.
However, the general contractor relinquishes a substantial amount of control over the project when this method is employed. The more that the contractor subcontracts out, the more the field operation becomes involved in coordination rather than direct supervision of craft personnel,
The subcontractor carefully checks the drawings and project manual and submits a price to the construction companies that will be bidding on the project. The price given may be a unit or lump sum price. If a subcontractor’s bid is presented as what he or she would charge per unit, then it is a unit price (such as per square foot, per block, per thousand bricks, per cubic yard of concrete) bid.
- Material Suppliers.
Suppliers submit price quotes to the contractors (and subcontractors) to supply the materials required for the construction of the project. Virtually every material used in the project will be estimated, and multiple price quotes will be sought.
Estimators will have to check the specifications and drawings to be certain that the materials offered will meet all of the requirements of the contract and required delivery dates.
- Manufacturers’ Representatives.
Manufacturers’ representatives represent certain materials, product suppliers, or manufacturers. They spend part of their time visiting contractors, architects, engineers, subcontractors, owners, and developers to be certain that they are aware of the availability of the material, its uses, and approximate costs.
In a sense they are salespeople, but their services and the expertise they develop in their product lines make good manufacturers’ representatives welcome not as salespersons, but as needed sources of information concerning the materials and products they represent. Representatives may work for one company, or they may represent two or more.
Manufacturers’ representatives will carefully check the specifications and drawings to be certain that their materials meet all requirements. If some aspect of the specifications or drawings tends to exclude their product, or if they feel there may be a mistake or misunderstanding in these documents, they may call the architects/engineers and discuss it with them.
In addition, many times, they will be involved in working up various cost analyses of what the materials’ or products’ installed cost will be and in devising new uses for the materials, alternate construction techniques, and even the development of new products.
- Project Management.
Project management companies specialize in providing professional assistance in planning the construction of a project and keeping accurate and updated information about the financial status of the project.
Owners who are coordinating large projects often hire such companies. Among the various types of owners are private individuals, corporations, municipal government agencies (such as public works and engineering departments), and various public utility companies.
Both the firms involved in project management, as well as someone on the staff of the owner being represented, must be knowledgeable in estimating and scheduling projects.
- Government.
When a government agency is involved in any phase of construction, personnel with experience in construction and estimating are required. Included are local, state or province, and nationwide agencies, including those involved in highways, roads, sewage treatment, schools, courthouses, nursing homes, hospitals, and single and multifamily dwellings financed or qualifying for financing by the government.
Employees may be involved in preparing or assisting to prepare preliminary and final estimates; reviewing estimates from architects, engineers, and contractors; the design and drawing of the project; and preparation of the specifications.
- Professional Quantity Surveyors.
Professional quantity surveyors are for-hire firms or individuals who make unit quantity takeoffs of materials required to build a project. They are available to provide this service to all who need it, including governmental agencies.
- Freelance Estimators.
Freelance estimators will do a material takeoff of a portion or entire project for whoever may want a job done. This estimator may work for the owner, architect, engineer, contractor, subcontractor, material supplier, or manufacturer.
In some areas, the estimator will do a material takeoff of a project being competitively bid and then sell the quantity list to one or more contractors who intend to submit a bid on the project.
Many times a talented individual has a combined drafting and estimating business. Part of the drafting business may include preparing shop drawings (drawings that show sizes of materials and installation details) for subcontractors, material suppliers, and manufacturers’ representatives.
- Residential Construction.
Estimators are also required for the contractors, material suppliers, manufacturer’s representatives, and most of the subcontractors involved in residential construction.
From the designer who plans the house and the drafter who draws the plans and elevations to the carpenters who put up the rough framing and the roofers who install the roofing material, knowledge of estimating is necessary.
The designer and drafter should plan and draw the house plans using standard material sizes when possible (or be aware of it when they are not using standard sizes).
In addition, they will need to give preliminary and final estimates to the owner. Workers need to have a basic knowledge of estimating so they can be certain that adequate material has been ordered and will be delivered by the time it is needed.
- Computer Software.
The use of computers throughout the world of construction offers many different types of opportunities to estimators. Job opportunities in all the areas mentioned earlier will be centered on the ability to understand, use, and manipulate computer software.
The software available today integrates the construction drawings, estimating, bidding, purchasing, and management controls of the project. Some construction consultants specialize in building databases for computerized estimating systems and training estimators in the use of these systems.
The Estimator
Most estimators begin their careers doing quantity takeoff; as they develop experience and judgment, they develop into estimators. A list of the abilities most important to the success of an estimator follows, but it should be more than simply read through.
Any weaknesses affect the estimator’s ability to produce complete and accurate estimates. If individuals lack any of these abilities, they must (1) be able to admit it and (2) begin to acquire the abilities they lack. Those with construction experience, who are subsequently trained as estimators, are often most successful in this field.
To be able to do quantity takeoffs, the estimator must:
- Be able to read and quantify plans.
- Have knowledge of mathematics and a keen understanding of geometry. Most measurements and computations are made in linear feet, square feet, square yards, cubic feet, and cubic yards. The quantities are usually multiplied by a unit price to calculate material costs.
- Have the patience and ability to do careful thorough work.
- Be computer literate and use computer takeoff programs such as On-Screen Takeoff or Paydirt.
To be an estimator, an individual needs to go a step further. He or she must
- Be able, from looking at the drawings, to visualize the project through its various phases of construction. In addition, an estimator must be able to foresee problems, such as the placement of equipment or material storage, then develop a solution and determine its estimated cost.
- Have enough construction experience to possess a good knowledge of job conditions, including methods of handling materials on the job, the most economical methods of construction, and labor productivity. With this experience, the estimator will be able to visualize the construction of the project and thus get the most accurate estimate on paper.
- Have sufficient knowledge of labor operations and productivity to thus convert them into costs on a project. The estimator must understand how much work can be accomplished under given conditions by given crafts. Experience in construction and a study of projects that have been completed are required to develop this ability.
- Be able to keep a database of information on the costs of all kinds, including those of labor, material, project overhead, and equipment, as well as knowledge of the availability of all the required items.
- Be computer literate and know how to manipulate and build various databases and use spreadsheet programs and other estimating software.
- Be able to meet bid deadlines and still remain calm. Even in the rush of last-minute phone calls and the competitive feeling that seems to electrify the atmosphere just before the bids are due, estimators must “keep their cool.”
- Have good writing and presentation skills. With more bids being awarded to the best bid rather than the lowest bid, being able to communicate what your company has to offer, what is included in the bid, and selling your services is very important. It is also important to communicate to the project superintendent what is included in the bid, how the estimator planned to construct the project, and any potential pitfalls.
People cannot be taught experience and judgment, but they can be taught an acceptable method of preparing an estimate, items to include in the estimate, calculations required, and how to make them.
They can also be warned against possible errors and alerted to certain problems and dangers, but the practical experience and use of good judgment required cannot be taught and must be obtained over time.
How closely the estimated cost will agree with the actual cost depends, to a large extent, on the estimators’ skill and judgment. Their skill enables them to use accurate estimating methods, while their judgment enables them to visualize the construction of the project throughout the stages of construction.
Types of Bids
Basically, the two bidding procedures by which the contractor gets to build a project for owners are as follows:
- Competitive bidding
Competitive bidding involves each contractor submitting a lump-sum bid or a proposal in competition with other contractors to build the project. The project may be awarded based on the price or best value.
When the project is awarded based on the price, the lowest lump-sum bidder is awarded the contract to build the project as long as the bid form and proper procedures have been followed and this bidder is able to attain the required bonds and insurance.
When the project is awarded based on the best value, the proposals from the contractors are rated based on specified criteria, with each criterion given a certain percentage of the possible points.
The criteria may include a review of the capabilities of the assigned project team, the company’s capabilities and its approach to the project (including the schedule), proposed innovation, method of mitigating risk, and price.
The price is often withheld from the reviewers until the other criteria have been evaluated to prevent the price from affecting the ratings of the other criteria. Most commonly, the bids must be delivered to the person or place specified by a time stated in the instruction to bidders.
The basic underlying difference between negotiated work and competitive bidding is that the parties arrive at a mutually agreed upon price, terms, conditions, and contractual relationship.
This arrangement often entails negotiations back and forth on virtually all aspects of the project, such as materials used, sizes, finishes, and other items that affect the price of the project. Owners may negotiate with as many contractors as they wish.
This type of bidding is often used when owners know which contractor they would like to build the project, in which case competitive bidding would waste time.
The biggest disadvantage of this arrangement is that the contractor may not feel the need to work quite as hard to get the lowest possible prices as when a competitive bidding process is used.
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Contract Documents
The bid submitted for any construction project is based on the contract documents. If an estimator is to prepare a complete and accurate estimate, he or she must become familiar with all of the documents. The documents are listed and briefly described in this section.
For design-bid-build projects, the contract documents consist of the owner-contractor agreement, the general conditions of the contract, the supplementary general conditions, the working drawings, and specifications, including all addenda incorporated in the documents before their execution. All of these documents become part of the contract.
Agreement. The agreement is the document that formalizes the construction contract, and it is the basic contract. It incorporates by reference all of the other documents and makes them part of the contract. It also states the contract sum and time allowed to construct the project.
General Conditions. The general conditions define the rights, responsibilities, and relations of all parties to the construction contract.
Supplementary General Conditions (Special Conditions). Because conditions vary by locality and project, supplementary general conditions are used to amend or supplement portions of the general conditions.
Working Drawings. The actual plans (drawings, illustrations) from which the project is to be built are the working drawings. They contain the dimensions and locations of building elements and materials required and delineate how they fit together.
Specifications. Specifications are written instructions concerning project requirements that describe the quality of materials to be used and their performance.
Addenda. The addenda statement is a drawing or information that modifies the basic contract documents after they have been issued to the bidder, but prior to the taking of bids. They may provide clarification, correction, or changes in the other documents.
For projects built with the design-build and construction manager delivery systems, the contract documents are more limited than for projects built with the design-bid-build delivery system because the contractor is involved in the design and selection of the specifications for the project.
These documents can be as simple as an agreement with a conceptual description of the project.
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Bidding Information
There are several sources of information pertaining to the projects available for bidding. Public advertising (advertisement for bids) is required for many public contracts.
The advertisement is generally placed in newspapers, trade magazines, and journals, and notices are posted in public places and on the Internet. Private owners often advertise in the same manner to attract a large cross-section of bidders.
Included in the advertisement is a description of the nature, extent, and location of the project; the owner; the availability of bidding documents; bond requirements; and the time, manner, and place where the bids will be received.
Availability of Contract Documents
When paper copies of the plans and the project manual are used, there is usually a limit on the number of sets of contract documents a general contractor may obtain from the architect/engineer, and this limitation is generally found in the invitation to bid or instructions to bidders.
Subcontractors, material suppliers, and manufacturers’ representatives can usually obtain prints of individual drawings and specification sheets for a fee from the architect/engineer, but it should be noted that this fee is rarely refundable. The architect/ engineer will require a deposit for each set of contract documents obtained by the prime contractors.
The deposit, which acts as a guarantee for the safe return of the contract documents, usually ranges from $10 to over $200 per set and is usually refundable.
It should be realized that the shorter the bidding period, the greater the number of sets that would be required. Also, a large complex job requires extra sets of contract documents to make an accurate bid.
To obtain the most competitive prices on a project, a substantial number of subcontractors and material suppliers must bid on the job. To obtain the most thorough coverage, there should be no undue restrictions on the number of sets of contract documents available.
If this situation occurs, it is best to call the architect/engineer and discuss the problem. For many projects, the owner makes drawings available in computer files, which can be printed or used in estimating software (such as On-screen Takeoff).
This reduces the cost of reproducing the drawings and project manual, making it economical to distribute them to numerous contractors and subcontractors. Often electronic copies of the plans and the project manual can be downloaded via the Internet.
During the bidding period, the lead estimator needs to be certain that the contract documents are kept together. Never lend out portions of the documents. This practice will eliminate subcontractors’ and material suppliers’ complaints that they did not submit a complete proposal because they lacked part of the information required for a complete bid.
Some subcontractors and suppliers still prefer to work with paper copies of the plans. The general contractors often
set aside space in their offices where the subcontractors’ and material suppliers’ estimators may work. In this manner, the contract documents never leave the contractor’s office and are available to serve a large number of bidders who want to use paper copies.
Sources of Estimating Information
For matters relevant to estimating and costs, the best source of information is your historical data. These figures allow for the pricing of the project to match how the company actually performs its construction.
This information takes into account the talent and training of the craft personnel and the management abilities of the field staff personnel. In addition, it integrates the construction companies’ practices and methodologies.
This is why a careful, accurate accounting system combined with accuracy in field reports is so important. If all of the information relating to the job is tracked and analyzed, it will be available for future reference.
Computerized cost accounting systems are very helpful in gathering this information and making it readily available for future reference.
There are several “guides to construction cost” manuals available; however, a word of extreme caution is offered regarding the use of these manuals. They are only guides; the figures should rarely be used to prepare an actual estimate.
The manuals may be used as a guide in checking current prices and should enable the estimator to follow a more uniform system and save valuable time. The actual pricing in the manuals is most appropriately used in helping architects check approximate current prices and facilitate their preliminary estimate.
In addition to these printed guides, many of these companies provide electronic databases that can be utilized by estimating software packages. However, the same caution needs to be observed as with the printed version.
These databases represent an average of the methodologies of a few contractors. There is no simple way to convert this generalized information to match the specifics of the construction companies’ methodologies.
That’s all,
…to be updated soon…!
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