Cost estimation exercise is a very important component of the construction business. It is the ability to estimate the number of materials, labor, and other facilities required to be used to accomplish a construction project. Both for the contractors and for the owners, it is extremely important to use accurate cost estimates to be able to make competitive offers and be profitable. This blog post will give the reader an understanding of what construction estimation entails and what makes it up.

Who is Estimator?

A Construction Estimator is a person who calculates different construction costs to prepare overall project costs with the help of project documents such as architectural drawings, materials requirements, and site conditions. Estimators prepare accurate estimates of costs by obtaining data from computerized estimating software, historical records, and practical knowledge. 

This is because the estimator is involved in the planning and design phase up to the beginning of the construction phase. During the changes to the project design, estimators make changes to the pricing quite frequently. Estimating plays a very crucial role in helping contractors make correct decisions during bidding and management of construction projects. Outsourcing CAD Drafting Services experienced at the initial stage of design helps the estimators get more 3D models, material take-offs, and drawings.

Key Elements Of The Estimating Process

Quantities Takeoff 

The takeoff quantities process comprises identifying from plans of a project the types and amounts of the labor, material, and equipment needed. With 2D prints, estimators were physically applying volumes, counting objects, and measuring to produce take-offs. Current Construction Estimating Services incorporate the use of BIM as well as 3D CAD models to enhance precision and eliminate computation.

Pricing

After the precise nature of the work is established, the estimators place monetary figures on every work item and the cost of the material. The price is set in consultation with the historical data, supplier quotes, bids from the subcontractors, and prevailing market trends. The cost of materials and manpower is also influenced by location. Estimators turn to industry databases to obtain cost estimates per city or region.

Overhead Costs

Overheads include all other costs incurred in the project which are not directly associated with the actual construction of the project such as administrative expenses, equipment at the building site, safety, security, and temporary accommodation at the building site. All these expenses are expressed as a proportion of the total direct costs. These overheads are marked up according to size and type of project.  

Contingencies 

Estimators also set aside reserves for extra costs, what they call contingency, for any other considerations during construction. Overhead costs are assigned in much the same manner as contingencies – as a percentage markup of total costs. While working on the projects more of the details are being confirmed, it is to that extent that the contingency amounts are adjusted but the actual amount for contingency for change orders is kept on hold.

Bid Documents

The estimate that is completed gets converted to appropriate bidding documents and summarized reports for use in client consultation. These are the last bidding reports and give the overall price of the project including detailed subtotals of material, labor, plant, and other incidental expenses, or contingencies or profits. Supporting documentation presents a summary of the price buildup with quantity and qualitative assessment.

Advantages of having good estimates

In construction, firstly to bid on a construction contract and secondly for financial planning of construction projects, accurate estimation of cost is very important. Failure of project management and poor financial breakthrough can occur if cost estimation is underestimated. Lack of competitiveness in the bidding comes as a result of overestimation. Key benefits of proper estimation include:

• Establish competitive prices for the projects in which bids can be compared 
• Scenario 3: To successfully compete, companies need to provide accurate time-line and material estimates  
• Most often, risks that may lead to cost or schedule overruns should be identified as early as possible.
• Permit evaluation that leads to the proposed cuts in project cost.
• To facilitate profit potential and margin assessment

Conclusion  

Probably the most critical aspect of estimating is achieved during the early stages of the construction planning process to acquire realistic budgets and avert inefficiencies. In addition, as designs evolve, it also enables corrective actions where costs are growing beyond planned projections. Professional construction estimation services as well as the application of quantification tools such as BIM increase confidence in estimate prediction in all the estimation parameters. When estimating is done to the optimal, contractors can go for and execute projects and still make their profits within the durations and quality standards required.

This encompasses the most fundamental areas in construction estimation such as quantification; pricing, overhead; and contingency.  Freelancer CAD Drafter and BIM modeling services assist in giving essential 3D data that are so important in enhancing the estimation. Budget informs realistic project schedules, proper bidding, and most importantly, timely and profitable project delivery.