Estimating

There are many times throughout a project when it is necessary to perform an estimate or take-off. The first time will typically be completed before a bid or offer is made. Estimators for a company must quantify the costs involved with the project they are working on.

An estimate comprises of all the costs involved to complete the work. What sort of manpower is required? Will you need equipment like boom lifts, backhoes, bobcats or compactors? Are there more material costs involved than meets the eye? What about overhead and profit?

You also have to understand when time is critical that the example below (a detailed breakout) won't happen. For example, when a subcontractor has three weeks to bid a project, they will quantify the scope, make assumptions on productivity (competitive assumptions), and produce a quick estimate.

What about when the owner is mulling an option to change the roof type? These decisions don't have time to wait, so an estimator must use his best judgement, based on experience, to provide a quick ROM (rough order of magnitude) to provide a quick idea of how the change would impact the current budget.

Estimating Examples

Remember the example mentioned on the take-off page? Here's what the next step towards creating an estimate might look like:

Example of a Detailed, Break-out Estimate

Material:
CMU Block: $1.15 per 8" block
$1.15 x 341 blocks = $392.15

Grout: $108 per cubic yard
$108 x 5 = $540

9% Tax on Material Costs
$83.90

Equipment:
Bobcat: $110 per day
$110 x 3 days = $330

Labor:
Brick Tender: $45 per hour
3 men, 4 days
$45 x 8 hours x 4 days x 3 men = $4320
Bobcat Driver: $52 per hour
1 man, 3 days (not needed the fourth day when grouting is completed)
$52 x 8 hours x 3 days x 1 man = $1,248

Subtotal:
$6,914.05

15% Overhead and Profit:
$1,037.10

Total:
$7,951

Example of a ROM

Material:
CMU Block: It's likely the estimator will take a linear footage off the plans and a rounded estimate of the height (one story, two, etc.)

In this example, we'll assume the wall is about 30' long by 10' tall. For a one-story CMU wall, the estimator knows this will cost about $250 per linear foot. This number has some contingency in it to protect the bidder against unknowns.

$250 per linear foot @ 30 lf = $7,500

This number is fairly close to the value provided above and still provides some wiggle room in case a few bricks are missed. It's not uncommon to find a subcontractor has provided a ROM about 20% higher than the actual cost of work, especially if he's already got a contract with the owner.

This is why it's so important to get a detailed breakout as soon as the owner decides to proceed with the new work. Otherwise, the subcontractor will begin to feel he is owed the full, padded value, even though it's not justified.

The Trifecta

As you can see, there is an important relationship between Bidding, Estimating and Scheduling a project. As shown above in the breakout for Labor costs, in order to estimate those costs, you must first understand how long it will take to complete each portion of the work. In order to bid a project, you must understand how much a project will cost and how long it will take to complete.

What if you're an owner or general contractor and you'd like to evaluate a change order?? There are some important items that should be consistent with every change order, regardless of the trade being priced. Look at the Evaluating Change Orders? section to see evaluation tactics for review of change orders.

To review sample problems visit the Practice Questions? page. This also includes a broad range of construction-related questions that apply to the PE Exam.


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