Module 1 – Construction Estimating

Module 1 : Part A - Theory

Introduction to Construction Estimating
stipulated price contract

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 Introduction to Construction Estimating
What is Estimating?
▪ Estimating is important for budgeting,
cost planning & cost control

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 Introduction to Construction Estimating
What is Estimating?
• A cost estimate is an assessment of the probable total cost
of some future activity.
• In the context of construction, a cost estimate is an
assessment of the probable costs of future project
activities.

The American Association of Cost Engineers (AACE)

defines an estimate as “an evaluation of all the costs of
the elements of a project or effort as defined by an
agreed upon scope.”
The Project Management Institute Handbook
(PMBOK)defines a cost estimate as “a quantitative
assessment of the likely costs for resources required to
complete an activity [project]”.
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 CONSTRUCTION ESTIMATING PROCESS
Construction Estimating is a process that involves gathering information, estimating the cost
of the project and generating the cost estimate.

2. Construction Estimating
•
•
Determine the scope of work.
Identify activities, tasks, milestones.
3. Cost Estimate
o Create a construction schedule to • Establish an initial
develop all cost items.
o Determine the number of days project schedule.
required to complete the project.
Ensure the estimate complies with • Develop a cost
INPUT
the client’s schedule
requirements.
EstablisEstablishestimate.
an initial project
• Perform quantity takeoff – from drawings or
site measurement.
OUTPUTh an initial project
o Determine labour, material and
equipment requirements.
o Determine general l requirements.
• Obtain quotes from
subcontractors/suppliers.
• Complete site visit
• Calculate all costs including direct, indirect
costs, contingency and escalation costs.
 CONSTRUCTION ESTIMATING PROCESS
Construction Estimating is a process that involves gathering information, estimating the cost
of the project and generating the cost estimate.

Information Gathering
Clearly establishing in-depth project needs from the outset is critical to an accurate cost
estimate.
For example, when estimating a space renovation ask the stakeholders detailed questions
regarding who uses the space, how they use technology, how the occupants interact, any
anticipated growth, and any current challenges in the way the space is used.
There are many variables that will determine the cost per square foot of a renovation.

tablish an initial project h an initial project

 CONSTRUCTION ESTIMATING PROCESS
Construction Estimating is a process that involves gathering information, estimating the cost
of the project and generating the cost estimate.

2. Construction Estimating
• Determine the scope of work.
Construction Estimating
• Identify activities, tasks, milestones.
o Create a construction schedule to • Project scope is the work that must be done in order to deliver the
develop all cost items. client’s requirements. Scope creep refers to how a project’s
o Determine the number of days
required to complete the project.
requirements tend to increase over a project lifecycle.
• When available, as-built drawings provide critical insight for the planning
Ensure the estimate complies with
the client’s schedule

•
requirements. and estimating process. In addition to reviewing as-built drawings,
Perform quantity takeoff – from drawings or
site measurement. performing a detailed inspection of the existing conditions of the
o Determine labour, material and building minimizes unforeseen conditions (and change orders) from
o
equipment requirements.
Determine general l requirements.
arising once construction starts. A site visit allows the team to view
• Obtain quotes from actual site conditions and make note of any exceptions to as-built
•
subcontractors/suppliers.
Complete site visit
drawings.
• Calculate all costs including direct, indirect
costs, contingency and escalation costs.
• Even the best-laid plans cannot entirely prevent surprises during
construction. Planning for these surprises will ensure your project stays
on budget. Depending on complexity, an allowance of 5-15% of total
project cost is appropriate for a renovation project. Higher contingencies
may be appropriate for complex renovations.

blinitial project h an initial project

 CONSTRUCTION ESTIMATING PROCESS
Construction Estimating is a process that involves gathering information, estimating the cost
of the project and generating the cost estimate.

Cost Estimate
3. Cost Estimate
• Establish an initial
• The scope can be used for developing the
project schedule
project schedule.
• Develop a cost • Example of an estimate summary
estimate.

ojen initial project

 Introduction to Construction Estimating
Estimating in Building Construction
• Prepared from the contract documents:
• Drawings
• Specifications (a detailed description of requirements,
materials and workmanship of a proposed building)

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 Introduction to Construction Estimating
Estimating in Building Construction
• Estimates are used to:
• Establish project budget (e.g.
$10,000,000)
• Prepare a bid (a bid is the lowest
estimated cost for which a
contractor is willing to complete
the project)
• Prepare a Schedule of Quantities
• Order materials

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 Role of the Estimator
What is the Role of an Estimator?
1. Preparing cost estimates
2. Estimating the needed quantities of labour,
materials and equipment
3. Estimating the time, it will take to complete a job

Materials Labour Equipment

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 Estimating
Quantity Takeoff
• Quantity takeoff is the process of extracting the building
dimensions and calculating estimated quantities
Exterior Dimensions
Length = 5 m
Width = 3 m
Carpeting
Interior Dimensions
Length = 5.00 –(2 x 0.25) = 4.50 m
0.25 m

3m
Width = 3.00 – (2 x 0.25) = 2.50 m
Carpeting Quantity
4.50 x 2.50 = 11.25 m2

5m

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 Estimating
Pricing
• Pricing is the process of estimating the cost of the
labour, material and equipment for each work item.
Carpeting Quantity
4.50 x 2.50 = 11.25 m2
Carpeting Unit cost of carpeting = $50.00/m2
(material, labour & equipment
included)
0.25 m

3m
Cost estimate for carpeting = 11.25 m2
x $50/m2 = $562.50

5m

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Types of Estimates
• Estimates can vary in
scope from "educated
guesses", known as Class D
estimates, to more detailed
bid estimates, known as
Class A estimates. The time
spent on the estimate will
vary depending on the
class of estimate that is
required. For example, the
Class D estimate may take
less time than Class A.

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 Levels of Estimates

Each type of estimate is generated at a

level which is determined at the stage of
project development.
Levels of Estimates
• Order of Magnitude Estimates
• Square Foot and Cubic Foot Estimates
• Elemental Cost Estimates
• Unit Price Estimate

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 Order of Magnitude Estimates
The order of magnitude estimate could be described as a
“guesstimate”.
• Accuracy of plus or minus 20%.
• The Order of Magnitude estimate is used when only minimal information is
available.
• The proposed use and size of the proposed building project must be known at this
stage

Example:
• Upgrading the HVAC system for the university science block will cost about
$ 250,000.00
• This type of statement (or estimate) can be made after a few minutes by
drawing upon experience and to make comparisons with similar projects
from the past.
This rough estimate might be appropriate for a project in one location, an
adjustment may be required for a change of location and for price
escalation over time.

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 Square Foot and Cubic Foot Estimate
Estimates which are related to the area or volume of the
building.
• Accuracy is plus or minus 15 %.
• Used at the design development stages for establishing the project
budget.

Several sources are available for square foot costs of construction

work:
• RS Means - Yardsticks For Costing
• Means Construction Cost Data

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 Elemental Cost Estimates

Estimates based on the analysis of individual construction

components.
• Accuracy is expected at plus or minus 10 %

• Elemental cost estimates are required primarily for

➢determining total capital cost and anticipated cash flow
requirements.
➢controlling the cost of the project during design and working
drawings stages.

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 Elemental Cost Estimates
In order to control costs, estimates for projects are analyzed on an elemental basis
i.e. the cost of each major building element and sub-element is identified on a cost per
square foot of the gross building area.
Organization of Elements
A SHELL
A1 Substructure
A2 Structure
A3 Exterior Enclosure
B INTERIORS
B1 Partitions & Doors
B2 Finishes
B3 Fittings & Equipment
C SERVICES
C1 Mechanical
C2 Electrical
D SITE & ANCILLARY WORK
D1 Site Work
D2 Ancillary Work
Z GENERAL REQUIREMENTS
Z1 General Requirements & Fee
Z2 Allowances

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 Unit Price Estimate
A Unit Price Estimate is based on completed tender documents.
• Accuracy is plus or minus 5%.
The Unit Price Estimate is the most accurate and detailed
• Completed working drawings and specifications are
required by the estimator to determine unit prices.
• Current and accurate costs for materials, equipment and
labour are required.

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 To summarize Module 1 – Part A

A cost estimate is an assessment of the probable costs of future project

activities.

Module 1 –
Part A
Summary
Construction Estimating is a process that involves gathering information,
estimating the cost of the project and generating the cost estimate.

Estimates can vary in scope from "educated guesses", known as Class D

estimates, to more detailed bid estimates, known as Class A estimates.
The Level of Estimate is determined at the stage of project development.

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BREAK
Introduction to Construction Estimating

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 Module 1 – Construction Estimating

Module 1 : Part B - Practice

Introduction to Construction Estimating
stipulated price contract

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Floor Area Calculations

Measurement of Floor Areas

AREA (m² ) =LENGTH (m) x WIDTH (m)

➢ Measure to the outside face of enclosing wall for the area on each
floor without any deductions for openings within the floor area to
determine the Gross Floor Area (GFA) of a building i.e. the area
enclosed by the outside surface of exterior walls.
➢ Measure to the inside face of enclosing wall for the area on each
floor without any deductions for interior walls and openings within
the floor area to determine the Net Floor Area (NFA)of a building
i.e. the area enclosed by the inner side surface of exterior walls.

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METHOD OF MEASUREMENTS

AREA

Using Exterior Plan Using Interior Plan

Dimensions (L x W) Dimensions (L x W)
GROSS FLOOR AREA (GFA) NET FLOOR AREA ( NFA)

Using Interior / Exterior Plan

Dimensions (L + W) x H
WALL AREA

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 Activity 1- Floor Area Calculations
❖Examine Drawing SK-1
Found under Week 1 Folder: Activity 1 Resources

❖Review Quantity take-off

Found under Week 1 Folder: Activity 1 Resources
Demonstration of Floor Area Calculations
These calculations use the definitions of GFA and NFA
on the previous slides to determine the Gross and Net
Floor Areas of the floor plan shown on Drawing SK-1.

Note: The dimensions are in imperial measurements

(feet and inches).

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 END OF WEEK 1

Next is a short quiz on Module

1 – Part A and a Practical
You should now be familiar with
Exercise based on Part B
the following :
before moving on to Week 2.

• the construction estimating

process
• the different types of estimate
• levels of estimates
• rules for measuring floor areas