CHAPTER 25 Computer Estimating

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Computer Estimating
Chapter 25
Introduction
 To assemble complete estimate, the estimator must
combine knowledge of construction methods & cost
calculations.
 This takes too much time, information, & numerous
calculations, so, it is an ideal task for the computer to
prepare a detailed estimate.
 The estimator should NEVER accept everything that
comes out of the computer as being totally correct.
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Importance of the Estimator

1. The estimator must know the software being
used.
2. The estimator has the capability to judge the
results of the software.
3. The estimator perform “what if” analysis.
4. The estimator manage the exchange of
information to ensure it is correctly entered into
the computer.
Tasks of Computer Used in Estimating

1. Maintaining master checklists.
2. Maintaining an inventory of subcontractors, vendors,
& suppliers.
3. Maintaining bidding records of competitive bidders.
4. Performing material quantity takeoffs.
5. Storing & retrieving historical cost data.
6. Storing & retrieving labor & equipment productivity.
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Tasks of Computer Used in Estimating

7. Establishing codes for labor & equipment resources.
8. Extending prices & summarizing costs at various
levels.
9. Distributing overhead & indirect costs.
10. Analyzing risk & assessing contingency for markup.
11. Preparing & delivering the bid or proposal in
electronic form.
12. Sharing information within an office or company.
Electronic Media
 It is the use of the internet & other electronic
media (CAD & word processing software) to
operate drawings & specifications.
 Intranet is an internet site set up for private use
of company & controls access of information.
 Extranet is an internet set up by a company for
shared use with others.
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Fundamentals of Spreadsheets
A spreadsheet is an electronic file consisting
of hundreds of columns & rows. The
intersection of a column & a row is called a
cell.
Numerical data, formulas, & calculations can
be entered into cells.
Advantages of Spreadsheets
1. Practically effective in reducing repetitious arithmetic.
2. They are a duplicator for paper & calculator.
3. They enable the estimator to precisely duplicate the
format & appearance of manual reports that were
used before the computers, since managers are more
comfortable with printouts that look exactly like
handwritten reports they’ve used for many years.
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Disadvantages of Spreadsheets
1. Only the developer of the spreadsheet knows all the
features that are in the spreadsheet.
2. They may have errors in the logic that no one discovers.
3. Only the developer of a complex sheet can use it.
4. One estimator can make changes to the spreadsheet
without the knowledge of other estimators.
5. Cost items missing in a bid because of the addition of a
line & forgetting to adjust the sum formula to include the
line.
Management of Data
Most data is stored on hard disks since vast
amounts of data may be used in computer
estimating, and data must be created, stored,
retrieved, & continually updated.
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Contactors typically categorize costs by the following

cost categories:
1. Labor (L).
2. Material (M).
3. Equipment (E).
4. Subcontractors (S).
Note that knowing the quantity of earth excavated is not

enough to estimate the cost of estimation, it’ll also
depend on the size of crew & type of equipment
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Labor Resources
 It is estimated by craft rather than by individual people.
 In computer estimating, they are selected from
selection lists.
 There are three methods for costing labor resources:
1. All labor factors.
2. Prepare all combinations
3. Simple historical rate.
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All Labor Factors Costing Method

 Enter all of the burden factors into the estimating
software & let the system compute labor rates.
 Factors used in the labor calculations fall into the
categories of:
1. Taxes.
2. Fringes.
3. Workmen’s compensation insurance.
4. Overtime.
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Prepare all Combinations Method

Prepare spreadsheets of all possible
combinations from which companies can
select the variations they need for each
particular estimate.
This method is not preferred.
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Simple Historical Rate Method

This method is valid only if all jobs are similar.
It uses the same tax on all labor crafts of
previous year for this year.
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Precision in Labor Costing

Too much precision in the rate makes little
practical sense.
Working days & working hours should be
rounded to a whole integer number of days or
complete number of working hours/day (that
is usually 8 hours/day).
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Equipment Resources
The equipment rates can be broken down into
two components:
1. Ownership costs.
2. Operating expenses.
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CREWS
Most systems use the concept of crew to link together labor, equipment, and optionally
material . Using crews is a very fast way to enter labor and equipment into an estimate. When
the estimator selects one of these crews and enters a production rate, the computer can pull in
many laborers and pieces of equipment and compute their hours and total costs. The estimator
can do in 5 sec what takes 2 or 3 min on hand written estimates, and there are no arithmetic
errors. Most companies should set up any where from a few to 20 or 30 standard crews that
can then be used over and over in future estimates.
However, some software does not allow modification of a crew, which might require the
estimator to have hundreds of crews to account for every possible variation in the crew. Heavy
Bid/Express allows the estimator to modify the crew where it is used in the estimate; therefore,
the same crew can be used in many places with minor variations. The “pieces” field simply tells
how many members are in the crew and thus the number of hours per crew-hour
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STRUCTURING THE ESTIMATE

For unit-price jobs, the owner provides the bedtimes which, for most
contractors, determine the first level of structure in the estimate. If the
job is lump sum, then the contractor can use the first level, referred to
as a “biditem” in the enclosed shareware, as the highest level of work
such as an area, a building, a type of work, etc. Typically, the
contractor then lists all of the activities that will be performed in that
biditem. Heavy Bid/Express has three levels of structure for an
estimate as:
Level 1 – Biditem
Level 2 – Activities
Level 3 – Resources (Detail)
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STRUCTURING THE ESTIMATE

The second level is referred by Heavy Bid/Express as an “activity”. This is not a
universal construction term. Other commonly used terms are tasks, phases,
operations, etc. an activity is something being performed during construction
and is usually represented by a verb, such as “Buy Pipe”, “Place Pipe”,
“excavate”, etc. the third level is the resources of labor, equipment, material,
and subcontractors. Some software packages have more levels in their
structure, which is useful when biditems regularly contain a dozen activities
or more and need to be grouped to make them more understandable. Some
contractors rarely have more than one activity per biditem and thus could use
very simple software that omits the activity level. However, such software
would not be appropriate for a company that intends to expand into more
complex work.
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ENTERING THE ESTIMATE

some contractors enter all the activities without resources as an outline, and
then work on them later, while others complete each activity as they build
the estimate. The best technique is the one that keeps the estimators thought
processes organized so that no thing is omitted. For each activity, the
estimator enters a description, quantity, and unit of work to be done. Since
many biditems have only one activity, a good software system should have a
way to copy the biditem content down to the activity. If the estimator is
retype data the computer should already know, the software vendor should
be informed of the wasted time so the software vendor can correct the
problem and improve the software. Some software vendors value
constructive suggestions and others do not, but most want to know the
defects in their systems that annoy customers.
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COPYING FROM PAST ESTIMATES

A useful and often used feature in computer
estimating is the ability to copy within the
current estimate or from past estimates.
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CHAPTER 25 Computer Estimating

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3/25/2022

Importance of the Estimator

Tasks of Computer Used in Estimating

Tasks of Computer Used in Estimating

Contactors typically categorize costs by the following

Note that knowing the quantity of earth excavated is not

All Labor Factors Costing Method

Prepare all Combinations Method

Simple Historical Rate Method

Precision in Labor Costing

STRUCTURING THE ESTIMATE

STRUCTURING THE ESTIMATE

ENTERING THE ESTIMATE

COPYING FROM PAST ESTIMATES

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