ACH 216 Lecture 04a (Estimating)

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ACH 216 Lecture 04a (Estimating)

  1. 1. Estimating Bidding and Project Award Cost Estimating Contract Documents The Bid Package Types of Contracts
  2. 2. Cost Estimating By Phase Cost Estimating Methods Quantity Take-off
  3. 3. <ul><li>The practice of estimating is required to maintain an objective of what the project costs will be before, during and after project design. </li></ul><ul><li>After the design is completed and construction documents are issued, an accurate estimate is performed which will be the bid proposal to the owner. </li></ul>
  4. 4. Cost Estimating by Phase <ul><li>As a project develops from programming through schematic design and design development to contract documents, various items must be determined, considered and evaluated regarding their impact on a project’s costs. </li></ul><ul><li>During each design phase, architects/engineers must use cost estimates as a means to communicate to the owner if the owner’s requirements and proposed budget are compatible. </li></ul>
  5. 5. Cost Estimating by Phase <ul><li>The practice of cost estimating is broken down into four (4) phases. They are as follows: </li></ul><ul><ul><li>PROGRAMMING phase </li></ul></ul><ul><ul><li>SCHEMATIC DESIGN phase </li></ul></ul><ul><ul><li>DESIGN DEVELOPMENT phase </li></ul></ul><ul><ul><li>CONTRACT DOCUMENTS phase </li></ul></ul>Architect/Engineer (or Construction Mgr) General Contractor
  6. 6. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>The phase is where the general contractor performs the actual quantity take-off . </li></ul><ul><ul><li>A detailed quantity take-off is the only accurate method of determining, within a high degree of precision, the project costs. </li></ul></ul><ul><ul><li>Other methods are mere guesses. </li></ul></ul>
  7. 7. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>A quantity take-off is a precise count of the material within the project. </li></ul><ul><ul><li>calculated in units or volume (sq. ft or cubic ft.) of material. </li></ul></ul><ul><li>The cost estimate organization should follow CSI MasterFormat Specification organization for the project. </li></ul><ul><ul><li>makes the estimate easier to divide among the estimating team. </li></ul></ul>
  8. 8. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Preparation Steps for Quantity takeoff </li></ul><ul><ul><li>Scan Drawings and Specifications to become familiarized </li></ul></ul><ul><ul><ul><li>Enables estimator to get a “feel” for locations of info </li></ul></ul></ul><ul><ul><ul><li>Allows estimator to notice major items that determine if more info is needed </li></ul></ul></ul><ul><ul><li>Mark drawings and specifications for unusual conditions or requirements </li></ul></ul><ul><ul><ul><li>Unfamiliar items to the estimator </li></ul></ul></ul><ul><ul><ul><li>Abnormal conditions or material used </li></ul></ul></ul><ul><ul><li>This means that the estimator must take additional steps to ensure that quantity-takeoff and pricing is accurate </li></ul></ul>
  9. 9. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Preparation Steps for Quantity takeoff </li></ul><ul><ul><li>Site Visit or Pre-Bid Meeting </li></ul></ul><ul><ul><ul><li>Note conditions to become familiarized with site </li></ul></ul></ul><ul><ul><ul><ul><li>Site access, utilities, site drainage, etc. </li></ul></ul></ul></ul><ul><ul><ul><li>Should be completed once a thorough look over of the drawings and specs has been completed. </li></ul></ul></ul><ul><ul><ul><li>Drawings and specifications should accompany you on initial site visit or pre-bid meeting </li></ul></ul></ul><ul><ul><ul><li>Visiting the site or attending pre-bid meeting will allow estimator to visualize conditions of site and special conditions for the project. </li></ul></ul></ul>
  10. 10. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Preparation Steps for Quantity takeoff </li></ul><ul><ul><li>Perform Quantity Take-off </li></ul></ul><ul><ul><ul><li>Determine unit costs (materials, labor, equipment) </li></ul></ul></ul><ul><ul><ul><ul><li>Obtained from vendors, suppliers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>RS Means Building Construction Cost Data </li></ul></ul></ul></ul><ul><ul><ul><li>Calculate quantities </li></ul></ul></ul><ul><ul><ul><li>Multiply unit costs against quantities </li></ul></ul></ul><ul><ul><ul><li>Apply variables </li></ul></ul></ul><ul><ul><ul><ul><li>Sales tax </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Overhead and profit </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Commissions </li></ul></ul></ul></ul>
  11. 11. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Rules of Quantity Take-off </li></ul><ul><ul><li>Measurement Taking </li></ul></ul><ul><ul><ul><li>Measure everything as it is, and do it twice </li></ul></ul></ul><ul><ul><ul><li>Rely on the dimensions listed on the drawings </li></ul></ul></ul><ul><ul><ul><li>Avoid scaling the drawings where possible </li></ul></ul></ul><ul><ul><ul><ul><li>If scaling is required, add 5-15% to the size </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Make sure scale is correct; check drawing scale </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Scale something like a 36” door to compare against </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>Note locations on drawings that had to be scaled </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>This could be a potential construction error </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>If working for design team, it will help A/E make correction </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>If working for contractor, it is a potential extra costs </li></ul></ul></ul></ul></ul>
  12. 12. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Rules of Quantity Take-off </li></ul><ul><ul><li>Take-off Every Item </li></ul></ul><ul><ul><ul><li>Do not leave anything out </li></ul></ul></ul><ul><ul><ul><li>An omission will unnecessarily lower cost amount of estimate </li></ul></ul></ul><ul><ul><ul><li>Use specifications as a shopping list </li></ul></ul></ul>
  13. 13. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Rules of Quantity Take-off </li></ul><ul><ul><li>Itemize take-off </li></ul></ul><ul><ul><ul><li>List all spaces, rooms, locations for different items </li></ul></ul></ul><ul><ul><ul><ul><li>Even if items are similar, keep them separate; they may have different installation/material costs </li></ul></ul></ul></ul><ul><ul><ul><li>Look for abnormal conditions </li></ul></ul></ul><ul><ul><ul><ul><li>Differing wall heights and ceilings that may require additional equipment or scaffolding. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>May also require additional manual labor </li></ul></ul></ul></ul><ul><ul><ul><li>Separate special labor conditions </li></ul></ul></ul><ul><ul><ul><ul><li>Items that must be performed by hand labor vs. equipment & tool labor. </li></ul></ul></ul></ul>
  14. 14. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Rules of Quantity Take-off </li></ul><ul><ul><li>Check drawings against specifications </li></ul></ul><ul><ul><ul><li>Look for completeness, coordination & contradictions </li></ul></ul></ul><ul><ul><ul><ul><li>If working for design team, it will help A/E make correction </li></ul></ul></ul></ul><ul><ul><ul><ul><li>If working for contractor, it is a potential extra costs </li></ul></ul></ul></ul>
  15. 15. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Items to be included in Quantity Take-off (this will become Bid Proposal) </li></ul><ul><ul><li>Specification Section number and listing </li></ul></ul><ul><ul><ul><li>Ie, “Section 12 24 00-Motorized Roller Shades” </li></ul></ul></ul><ul><ul><li>Item Description or scope of work </li></ul></ul><ul><ul><ul><li>Be specific as possible </li></ul></ul></ul><ul><ul><ul><li>Keep items separated </li></ul></ul></ul><ul><ul><li>Quantity </li></ul></ul><ul><ul><li>Unit of measurement </li></ul></ul><ul><ul><ul><li>Each, square footage, cubic footage, linear footage </li></ul></ul></ul>
  16. 16. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Items to be included in Quantity Take-off (this will become Bid Proposal) </li></ul><ul><ul><li>Unit Cost </li></ul></ul><ul><ul><ul><li>Material </li></ul></ul></ul><ul><ul><ul><li>Labor </li></ul></ul></ul><ul><ul><ul><li>Equipment </li></ul></ul></ul><ul><ul><ul><li>Overhead & Profit </li></ul></ul></ul><ul><ul><li>Inflation or Escalation Factor </li></ul></ul><ul><ul><ul><li>Should be applied if material/labor will not be ordered and installed for a extended period of time (ie. 6-24 months) </li></ul></ul></ul>
  17. 17. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Items to be included in Quantity Take-off (this will become Bid Proposal) </li></ul><ul><ul><li>Total Item Costs </li></ul></ul><ul><ul><ul><li>Multiply quantity, unit cost, inflation factor (if needed) </li></ul></ul></ul><ul><ul><li>Total Items for Each Specification Section furnished and/or installed by others </li></ul></ul><ul><ul><ul><li>Includes Subcontractors bid proposal </li></ul></ul></ul><ul><ul><li>Total Items for each specification division </li></ul></ul><ul><ul><li>Total costs for divisions </li></ul></ul><ul><ul><ul><li>Produces a labor and material costs for general contractor </li></ul></ul></ul>
  18. 18. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Items to be included in Quantity Take-off (this will become Bid Proposal) </li></ul><ul><ul><li>Multiply in GC’s overhead and profit factors </li></ul></ul><ul><ul><ul><li>Overhead and profit may be determined by the amount of administrative work during estimating </li></ul></ul></ul><ul><ul><ul><li>Most GC’s use a standard factor of 10-20% for OH & P </li></ul></ul></ul>
  19. 19. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Items to be included in Quantity Take-off (this will become Bid Proposal) </li></ul><ul><ul><li>Other Factoring Items </li></ul></ul><ul><ul><ul><li>Multiply in Project Size Multiplier , if published cost data is used </li></ul></ul></ul><ul><ul><ul><li>Multiply in City Costs Index , if published cost data is used </li></ul></ul></ul><ul><ul><ul><li>Multiply in Inflation Factor </li></ul></ul></ul><ul><ul><ul><li>Multiply in Design Phase Contingency Factor , if published cost data is used </li></ul></ul></ul><ul><ul><ul><ul><li>Sometimes contractors will add in a contingency; amount is based upon bidding strategy & analysis </li></ul></ul></ul></ul>
  20. 20. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>THESE ITEMS WILL CREATE A TOTAL SUM FOR THE CONSTRUCTION COST </li></ul>
  21. 21. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Other Information that could affect the estimate: </li></ul><ul><li>1. Job Conditions </li></ul><ul><ul><li>Economic conditions </li></ul></ul><ul><ul><li>Hoisting conditions </li></ul></ul><ul><ul><li>Contractor management experience </li></ul></ul><ul><ul><li>Labor availability </li></ul></ul><ul><ul><li>On-site storage availability </li></ul></ul><ul><ul><li>Subcontractor availability </li></ul></ul><ul><ul><li>Work space and staging area availability </li></ul></ul>
  22. 22. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Other Information that could affect the estimate: </li></ul><ul><li>2. Estimating Philosophy </li></ul><ul><ul><li>No matter how accurate the estimators are, each one will determine a different estimate amount because each evaluation will be completed differently. </li></ul></ul><ul><ul><li>Each estimator may have used different steps for estimating quantity, using different waste factors, and different labor rates </li></ul></ul><ul><ul><li>Labor and equipment costs estimating are usually biggest source of difference between estimators </li></ul></ul><ul><ul><li>Labor and equipment costs are based on corporate memory from past projects and are modified to present day labor wages and costs </li></ul></ul>
  23. 23. Cost Estimating by Phase CONTRACT DOCUMENTS PHASE <ul><li>Other Information that could affect the estimate: </li></ul><ul><li>3. Additional factors </li></ul><ul><ul><li>Crew size requirement in order to accomplish work in adequate amount of time. </li></ul></ul><ul><ul><li>Worker productivity that may cause less or greater labor rates. </li></ul></ul><ul><ul><li>“ Safety factor”, confidence in estimate from the estimator; this is based on experience </li></ul></ul><ul><ul><li>Estimate is compiled by computer or by hand; accuracy of estimate based on method on compilation. </li></ul></ul>
  24. 24. NEXT CLASS BIDDING Construction Documents The Bid Package Types of Contracts

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