Quantity Surveying & Cost Estimation

Spring 2023

Asst. Prof.
Dr. M. Sohail. A. Malik, PhD, P.E.

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The Three Gorges Dam, world's largest power station in terms of installed capacity (22,500
MW), is an enormous project including a dam for flood control, a giant lock for carrying ships
up and down river, and 26 hydroelectric power generators.
When approved in 1992, the initial cost was $8.35 billion. But by the time the dam was
completed in 2006, the price tag was had increased to $37 billion [source: Reuters].

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The Channel Tunnel is a trio of 50 KM long tunnels underneath the English Channel,
connecting England and France. When finished in 1994, the $21 billion cost (an 80% cost
overrun) made it one of the most expensive construction projects in history [source: PBS].
The project was funded privately, through bank loans and selling shares to the public. The
original shareholders lost most of their money due to cost overruns, which crippled the
company.

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 Denver International Airport (USA)
Initial Estimated Cost- $2.5 billion
Completion Cost- $5 billion

4
 International Space Station
Initial Estimated Cost- $17.4 billion
Completion Cost- $160 billion

5
 New Islamabad International Airport
Start Date- 2007 Initial Estimated Cost- 37 Billion
Opening Date- 2018 Completion Cost- 105 billion

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 Neelum Jehlum Link Canal
Start Date- 2008 Initial Estimated Cost- 15.3 Billion
Opening Date- 2018 Completion Cost- 515 billion
Cost of Elec- Rs. 13 per unit

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Main Effects of Cost Overrun
• Cost overruns is an exceedingly frequent
phenomenon and is associated with almost all the
construction projects (Azhar et al., 2008).
• The reason for poor performance are incentives to
underestimate costs, overestimate revenues,
undervalue environmental impact, and overvalue
economic development effects (Zahariadis, 2004).
• The central problems are lack of accountability and
inappropriate risk sharing (Flyvbjerg et al., 2003).
(Mahamid & Dmaidi, 2013)

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 Problem at the core
• The uncertainty (positive or negative) is an inevitable
aspect of most projects and can significantly affect
achievable performance.
• Classification of
Uncertain events by:
• Source • Potential impact
• Technical issues
• Variation
• Market
• Foreseen Uncertainty
• People • Unforeseen Uncertainty
• Cost • Chaos
• Schedule
• Quality

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Course Details Course Outcomes:
At the end of the course, participants
should have:
Course Objectives: • the ability to prepare a project budget
The role of estimating in
and relate the budget to a Bill of
construction contract
administration. Quantities
Types of estimates. Unit costs and • the ability to prepare a feasibility cost
production rates; job costs. estimate
Preparing bid for complete • knowledge of how to control costs
building project using manual • knowledge of how to accommodate
methods and the CSI format; risk in cost estimating
Checking quantity take-off and
• knowledge of broad principles and
cost estimating in selected
divisions using a computer processes of construction cost
package. estimating
Controlling cost on projects using • knowledge of elements of price and
management methods. build up of cost from first principles
• an appreciation of the difference
between cost, value and waste 10
Teaching plan
18 Weeks Semester

4 x Assignments /
Holistic Subject Perspective
Presentations

Detailed Exposure to all Subject Areas &

4 x Quizzes
Methodology

Completion of Course Outline 2 xOHTs

Course Text Books Supplemented by

Final Exam
Handouts

Theme-Oriented MS PowerPoint Term Project

Presentations

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Grading policy/assessment
Assessment instrument* Weighting (%age)

4 Quizzes 10%

4 Assignments 5%

2 x OHTs 30%

Term Project 15%

Final Exam 40%

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Project work
1. Preparation of bid/ estimate using
multiple contractual arrangements
2. Group of 2 students
3. Weekly meetings to monitor
progress
4. Usage of technology is highly
encouraged

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Related books
1. Dagostino, F.R. and Peterson, S.J. (2011).
Estimating in Building Construction. Prentice
Hall.
2. Popescu, C.M., Phaobunjong, K. and Ovararin,
N. (2003). Estimating Building Costs. Marcel
Dekker, Inc.
3. Peurifoy, R.L. and Oberlender, G.D. (2002).
Estimating Construction Costs. McGraw-Hill.
4. Holm, L., Schaufelberger, J.E., Griffin, D. and
Cole, T. (2004). Construction Cost Estimating:
Process and Practices. Prentice Hall.
5. Willis, C.J. and Newman, D. (1988). Elements
of Quantity Surveying. BSP Professional Books.
6. Dutta, B.N. (2008). Estimating and Costing in
Civil Engineering: Theory and Practice. UBS
Publishers.
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Estimating in Construction

• Estimate is defined as “to roughly calculate or judge the value,

number, quantity, or extent of”.
• A cost estimate is the “approximation of the cost of a program,
project, or operation”.
• Building construction estimating is the “determination of
probable construction costs of any given project”.
• Estimate is prepared before the actual construction.
• In the DBB delivery system, it is necessary for contractors to
submit a competitive cost estimate for the project.
• Prepared from the contract documents:
• Plans
• Project manual (contract documents, technical
specifications, etc.)

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 Estimating in Construction
• Quantities of estimates are used for:
• Establishing project budget
• Procuring materials/services
• The estimated quantities and their associated
projected costs will become the basis of project
controls in the field.
• Estimates consist of:
• Direct cost (material, labor, equipment, or
subcontracted items)
• Indirect cost (general conditions or project
overhead costs)
• Regardless of the variables (direct or indirect)
involved, the estimator must strive to prepare as
accurate an estimate as possible.
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Estimating in Construction
• Provides the general
contractor an acceptable
rate of return (profit
margin) and compensation
for the risk associated with
the project.
• How to set profit
rate/ratio?

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Whose responsibility is it to
prepare estimate?
• Client?
• Contractor?
• Consultant?
• The role of delivery method/contract
type in setting out the responsibility.
• In DBB?
• In DB?
• In CM?
• In PPP?
• In LSTK?
• In EPC?
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Today's Objectives

• Introduction of Quantity Surveying

• History of Quantity Surveying
• Stages of a Construction Project
• Role & Functions of a QS
• Estimating Opportunities

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Quantity Surveyor - Introduction
“A professional working within the construction industry concerned with
building costs”
Wikipedia

In USA known as Cost Engineer

A specialist who prepares standardised schedules for a building

project in which all of the construction materials, labour activities and

the like are quantified.

His prime task is to ensure that the project is kept within budget and

that the client gets value for money.

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History of QS
• QS developed its root in UK during 17th century.

• 1785 Earliest recorded firm, Henry Cooper and

Sons was established.
• 1820 Emerged as a profession, one of the earliest
QS was Sir Henry Arthur Hunt in UK.
• 1859 First recorded use of term “quantity surveyor”

• 1922 Standard Method of Measurement (SMM)

issued and being updated until today.
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History of QS
EARLY DAYS

IN TIME

CONTRACT SYSTEM

INDUSTRIAL REVOLUTION

THE BILL OF QUANTITIES

THE QUANTITY SURVEYOR

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History of QS
EARLY DAYS
• Clients employed architects to design and erect buildings.
• Architects employed master craftsmen to carry out work.
• Costs were not agreed at initial stage and craftsmen submitted
accounts on completion of work.
IN TIME
• Master craftsmen engaged measurers to prepare accounts.
• Disagreements arose as quantities claimed far exceeded the
measured finished work.
• Architects engaged their own measurers to contest the claims of
the master craftsmen.
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History of QS
CONTRACT SYSTEM
• Building owners had their work executed under contract.
• Tenders were called for before work was undertaken.
• Contract sums therefore had to be agreed before work
commenced.
INDUSTRIAL REVOLUTION
• System of building procurement gained strength.
• Advent of the general contractor.
• Full drawings/specs were prepared before tenders were called.
• Contractors tendered in competition with one another based on
the full drawings and specifications. 24
History of QS

THE BILL OF QUANTITIES

• The only way to prepare an accurate estimate cost

or tender is to measure the quantities of all the
labor and materials necessary to complete the
works – in other words, preparing a “Bill of
Quantities”.

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 History of QS

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THE QUANTITY SURVEYOR

• Initially each builder prepared his own bills of quantities (BQs)

for each project, later they started employing one surveyor to
measure the quantities for them all.

• Cost of engaging the surveyor was shared.

• QS ensured identical BQs so all contractors were pricing &

tendering on the same basis.

• Client employed his own surveyor to work with the contractors’

surveyor & protect his interests.
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Functions of a QS

Manage & Control Costs within Construction Projects

Measurements, Estimations

Costing, Valuation, Tender Pricing

Minimize Cost & Enhance Value

These all vary dependant on Developer & Contractor

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Traditional Role of a QS
• Measurer – Arrives at quantities of different
items of work for:
 Tender document preparation (for developer)

 Tender Pricing (for contractor)

 Handles BQs and prices schedules

 Bills for payment, interim and final

 Measures quantities from drawings and from site

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 Type of Works in Construction
Project
Project

Mechanical Electrical Structural Architectural

Works Works Works Works

HVAC Services
Civil
Works

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Design & Estimating Process

Conceptual Detailed
Feasibility Pre-bid Construction
design design

Conceptual
& Definitive
Detailed Estimates
Preliminary Estimates
Estimates

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 Main Stages in Construction Project
1- Concept : Identify the project needs and objectives
2-Technical studies as feasibility study, possibility of implementation
and financing etc
3- Preliminary design
4- Detailed design Arch, structure, electric, mechanical etc
5- Tender documents
10- Preliminary handing over the project
6- Tendering
7- Contract Award 11- Operation of the project
8- Contract Agreement 12- Maintenance period
9- Starting Construction 13- Final handing over of the Project

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 Types of estimates
• Detailed estimate
• Determines the quantity and cost of
everything required for the project,
including:
• Materials
• Labor
• Equipment
• Insurance
• Bonds
• Overhead
• Profits*, Etc.
*considering the investment, the time to complete, and the 32
complexity of the project
Types of estimates
• Assembly estimate
• Bid by groups of components
(assemblies)
• Useful for conceptual and preliminary
estimates
• For example, a light switch would
include:
• Single-gang box
• Single-pole switch
• Cover plate
• Two wire nuts
• 20 feet of wire
QUEST LANDSCAPE ESTIMATOR Software:
• Is assemble estimate equal to http://www.sabatsoft.com/so_civil-
LandscapeContractors-content.html
subcontract estimate? 33
Types of estimates
• Square-foot estimates
• Bid based on an average cost per
square foot
• May be adjusted for:
• Building height
• Building perimeter, etc.
• Sometimes, a unit other than square
footage is used. E.g. Parking garage
are measured by the number of
parking stalls.
• Is a linear relationship
mathematically and financially
justified? 34
 Types of estimates
• Parametric estimates
• Parametric estimates use
equations that express the
statistical relationship between
building parameters and the cost of
the building. Bid based upon the
statistical relationship between
building components may include:
• Square footage
• Number of floors
• Length of perimeter
• Percentage of the building that
is common space
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 Types of estimates
• Parametric estimates
• For pipelines, for example, one
would probably choose both length
and diameter and then calculate
costs in units of dollars per inch of
diameter per lineal foot of pipe.
• For a pump station costs are often
calculated in dollars per gallons per
minute of capacity or dollars per
installed horsepower.
• Roadway costs are often
calculated in dollars per lane mile.

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 Types of estimates
• Model estimates
• Prepares an estimate based upon
the answers to a number of
questions
• Questions for the slab on grade
portion of the building might include:
• What is the thickness of the
slab?
• Does the slab have wire mesh?
• Do you want fire sprinklers?
• Experiential and experimental
details help populate the model
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 Types of estimates
• Model estimates
• For example, an estimate may be prepared for a warehouse
by answering the following questions:
• What is the length of the • Do you want wire mesh in the
building? slab?
• How many bays are along the • How many roof hatches do
length of the building? you want?
• What is the width of the • How many personnel doors
building? do you want?
• How many bays are along the • How many and what size of
width of the building? overhead doors do you want?
• What is the wall height above • How many and what size of
the grade? skylights do you want?
• What is the depth (from the • Do you want fire sprinklers?
grade) to the top of the • What bathroom facilities do
• footing? you want (separate male
• What is the floor thickness? and female, unisex, or none)?
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Types of estimates

• Project comparison estimates

• Prepared by comparing the costs of a

proposed project to a similar

completed project

• Adjusted for difference between the

comparison project and the project

being estimated
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Estimating opportunities

• Architectural offices • Government

• Engineering offices • Professional
• Subcontractors quantity surveyor
• Material suppliers • Freelance
estimators
• Manufacturers’
representatives • Residential
construction
• Project
management • Computer software
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Quantity Takeoff Skills

• Read and quantify plans

• Knowledge of math and geometry
• Patience
• Does careful, thorough work
• Computer literate with takeoff software
• On-Screen Takeoff
• Paydirt for cut and fill
• WinEst

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 Additional Estimating Skills
• Visualize building from plans
• Foresee problems
• Experienced in the construction process
• Methods of handling materials
• Labor productivity
• Convert labor productivity to costs
• Maintain a cost database
• Computer literate with:
• Spreadsheets
• Estimating software such as WinEst
• Meets bid deadlines
• Strong writing and presentation skills
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