Fundamentals of Construction Estimating PDF

Chapter 1 Introduction  Objectives Upon completion of this chapter, you will be able to: – List and briefly describe the different functions served by estimating in the construction industry – Briefly describe the cost planning process including the role of concep...

Chapter 1 Introduction  Objectives Upon completion of this chapter, you will be able to: – List and briefly describe the different functions served by estimating in the construction industry – Briefly describe the cost planning process including the role of conceptual estimates and preliminary estimates  Objectives (cont’d.) – Describe the three main project delivery systems—traditional design-bid-build, construction management, and design- build—and explain how conceptual, preliminary, and detailed estimates are used with each – Identify what type of estimating is required for lump-sum, unit-price, and cost-plus contracts  Objectives (cont’d.) – Outline the detailed estimating procedure – Recognize the need for knowledge of Occupational Safety and Health Administration safety standards and the impact that compliance with the standards has on construction costs  Introduction Goal of this book: – Present a method of compiling consistently accurate construction cost estimates In a minimum of time Can be easily integrated with latest technology Intended to represent a standard or basic core  What Is an Estimate? Probable total cost of a future activity – Occurs in all industries and government agencies: Budget preparation for future expenditures Anticipate what something will cost – Basic approach for construction estimates: Identify work items to be completed Measure work items size Assess likely cost of work  The Role of Estimating Figure 1.1 Role of the Estimator in the Traditional Construction Process (Delmar/Cengage Learning)  Conceptual Estimates Produced from owner’s notion of the construction: – Few, if any, design details available Is the project feasible? Does potential value justify cost? – Value reflects the benefits of development – Cost include delivery and future use of project  Preliminary Estimates and Cost Planning Prepared as design develops – Informs whether design meets the budget – Provides alternative design cost information Value analysis: improvement justification – Estimates subdivided into elements Elements: major components considered in design Budgets established and maintained for each element Preparing Construction Estimates Main categories: – Preliminary estimating techniques – Detailed estimating techniques Influential factors: – Project type – Delivery system – Nature of delivery system contracts Figure 1.2 Types of Project and Estimating Methods (Cengage Learning)  Project Delivery Systems and Estimating Traditional (design-build) delivery – Project is fully designed before work begins Construction management delivery – Facilitates overlap between project stages – Main objective: earlier completion Design-build delivery – Single organization assumes responsibility for design and construction Figure 1.3 Traditional (Design- Bid- Build) Delivery System (Cengage Learning) Figure 1.4 Construction Management Delivery System (Cengage Learning) Figure 1.5 Design- Build Delivery System (Cengage Learning)  Estimates for Different Types of Contracts Lump-sum contracts – Defined scope of work for stipulated sum Cost-plus contracts – Work begins before full design Final price based on preliminary estimates Uncertain total cost of construction Used if work must get underway quickly or is difficult to define  Estimates for Different Types of Contracts (cont’d.) Unit-price contracts – Measurement and payment – Based on pricing schedule Breakdown of the work Estimated item quantities priced in bid Work completed is measured Contractor paid at unit prices quoted Allows final quantities to differ from initial desgn  Estimates for Different Types of Contracts (cont’d.) Detailed estimates – Stages: Quantity takeoff Recap quantities Pricing the recap Pricing subcontractor’s work Pricing general expenses Summary and bid Estimating and Construction Safety Occupational Safety and Health Administration – Safety standards Failure to comply may result in fines or imprisonment Cost of poor safety on the work site – Growing awareness Direct and hidden costs  Summary Estimating serves several purposes – Value analysis, bids, payment evaluation and cost control Conceptual estimates: project feasibility Preliminary estimates: budget control Detailed estimates: forecast costs accurately Be aware of safety requirements – Occupational Safety and Health Administration