Basics of Construction Economics & Estimations

Construction Economics and Estimations

• Definition: Construction economics is the study of the economic aspects and principles related to construction projects.
• Key Components:
  • Cost Analysis: Evaluating costs associated with construction, including materials, labor, equipment, and overhead.
  • Supply and Demand: Understanding market forces affecting the availability and cost of construction resources.
  • Project Financing: Managing the financial aspects of construction projects, including funding, loans, and returns on investment.

Estimations in Construction

• Definition: Estimation in construction refers to the process of predicting the costs, time, and resources required for a construction project.
• Types of Estimations:
  • Preliminary Estimate: Rough cost estimation done in the early stages of project planning.
  • Detailed Estimate: In-depth analysis of costs based on detailed project plans and specifications.
  • Bid Estimate: A competitive estimate submitted by a contractor in response to a project's bid.

Factors Influencing Construction Economics and Estimations

• Materials: Prices and availability of construction materials.
• Labor: Costs associated with hiring and managing skilled and unskilled labor.
• Location: Geographic factors affecting logistics and costs.
• Market Conditions: Economic trends, inflation, and local market conditions affecting costs.
• Project Scope: The size, complexity, and nature of the project.

Key Processes in Estimations

• Quantity Takeoff: Determining the quantities of materials needed for the project based on drawings and specifications.
• Unit Cost Estimation: Assigning costs to each unit of work or material.
• Overhead and Profit: Adding overhead costs (indirect expenses) and profit margin to the direct costs.
• Contingency: Including a contingency allowance for unforeseen circumstances or changes.

Software and Tools in Estimations

• Estimation Software: Utilizing specialized software like ProEst, Sage Estimating, or BuildingConnected for accurate and efficient estimations.
• Building Information Modeling (BIM): Integrating BIM technology for 3D modeling and collaborative project planning.

Challenges in Construction Economics and Estimations

• Uncertainties: Changes in market conditions, project scope, or unexpected events.
• Inaccurate Information: Insufficient or inaccurate data in project plans and specifications.
• Regulatory Changes: Changes in regulations impacting construction practices.

Continuous Monitoring and Adaptation

• Cost Control: Regularly monitoring project costs and adjusting the budget as needed.
• Value Engineering: Finding ways to optimize costs without compromising project quality.

Documentation

• Detailed Records: Maintaining accurate records of costs, changes, and unforeseen events for future reference.

Stakeholders in Construction Projects

• Owner/Client: The individual or organization that initiates and funds the construction project.
• Project Manager: Responsible for overall project planning, execution, and completion.
• Contractor: The entity responsible for executing the construction work.
• Architect/Designer: Designs the project, develops plans, and ensures that the construction meets specified standards and regulations.
• Engineers: Civil, structural, mechanical, and electrical engineers play crucial roles in the planning, design, and implementation of various aspects of the construction project.
• Consultants: External experts hired to provide specialized advice.
• Government Authorities/Regulatory Bodies: Agencies responsible for enforcing building codes, zoning regulations, and other legal requirements.
• Financial Institutions: Provide funding and financial support for the construction project.
• End Users/Occupants: Individuals or organizations for whom the construction project is being undertaken.

Need for Estimation

• Budgeting: Cost Planning: Estimation helps in forecasting costs associated with a construction project.
• Project Feasibility: Financial Viability: Estimation is integral to conducting a feasibility study, helping stakeholders assess whether the benefits of the project justify the costs.
• Decision-Making: Informed Decision-Making: Accurate estimations provide stakeholders with the information needed to make informed decisions about the project.
• Competitive Bidding: Bid Preparation: In competitive bidding scenarios, contractors rely on accurate estimates to prepare competitive bids.
• Resource Planning: Materials, Labor, and Equipment: Estimations help in determining the quantities of materials, labor, and equipment needed for a project.
• Project Scheduling: Time Estimation: Estimations contribute to the development of project schedules by providing insights into the time required for each activity.
• Risk Management: Identification of Contingencies: Estimations include contingency allowances for unforeseen events or changes in project scope.
• Client Communication: Transparency: Accurate estimates enhance transparency in communication with clients.
• Financial Control: Cost Control: Estimations act as a baseline for cost control throughout the project.

Units of Measurement

• Dimension: Measured to the nearest 0.01 m.
• Area: Worked out to the nearest 0.01 sq.m.
• Cubic content: Calculated to the nearest 0.01 cu.m.
• Weight: Worked out to the nearest 0.001 tonnes.
• Thickness of RCC slab: Measured to the nearest 0.005 m.
• Thickness of woodwork: Measured to the nearest 0.002m.
• Thickness of steelwork: Measured to the nearest 0.001m.
• Length of steel reinforcement bar: Measured to the nearest 0.005 m and its diameter to the nearest 0.0001 m.
• Area of steel: Measured to the nearest 0.0001 cu.m.
• Volume: Measured to the nearest 0.01 cu.m., but the volume of wood shall be measured to the nearest 0.001 cu.m.

Methods of Measurement

• Earthwork in excavation: Measured in cu.m.
• Surfacing and dressing: Measured in sq.m.
• Filling in plinth and foundation: Measured in cu.m.
• Exaction for pipe, cable, etc.: Measured in m.
• Brickwork: Measured in cu.m.
• Brickbat cement concrete: Measured in cu.m.
• P.C.C.: Measured in cu.m.
• R.C.C.: Measured in cu.m.
• Damp proof course: Measured in sq.m.
• Reinforcement steel: Measured in kg.
• Centering and shuttering: Measured in sq.m.