Define different terminology used in Estimating and costing

1. • Terminology used in estimating and costing
Estimating, Costing and Valuation
Prepared by:
Janak Mehta
Assistant Professor
Civil Engineering Department
Diwaliba Polytechnic, Mahuva.

2. Contents
• Taking off in quantity surveying
• Provisional sums
• Prime cost
• Provisional quantities
• Spot items
• Day work
• Contingencies
• Work charged establishment charges
• Water charges
• Overhead charges

3. Taking off in quantity surveying
• This is the process of finding out the quantities for various items of works
involved in a project by taking off various dimensions from the plan,
sections of the drawings and tabulating in a measurement seat.
• The measurement sheet contains following columns like description,
number, length, breadth, thickness/height and quantity.

4. Provisional sums
• While preparing the estimate some amount is provided in it for items
whose details regarding cost or specifications are unknown during the
preparation. for such items, a reasonable amount is provided in the estimate
and in the bill of quantities, known as provisional sum.
• For example the cost and specifications for a lift may be unknown during
estimation for the building. Such amounts are known as provisional sum.
However the payments for these provisional items are done as per actual
rate.

5. Prime cost
• Prime cost is the purchase cost of articles at a shop. Prime cost is generally
referred to the supply of a particular article and not for carrying out a work.
The prime cost includes the Estimation and Professional Practices cost for
carriage but excludes the cost of fixing or fitting.
• For example: the door and window fittings are purchased from the shop at
a cost of Rs 1000.00. The transportation cost is Rs.50.00 and the cost for
fixing and fitting is Rs.100.00. Then the prime costs of the fittings are Rs.
1050.00.

6. Provisional quantities
• During preparation of an estimate if it is apprehended that additional
quantities against some items may be required due to variation of site
conditions, then those quantities are estimated separately from the
dimensions of the drawing and kept separately in the estimate under a
heading Provisional Quantities.

7. Spot items
• There are certain items for which it is not possible for the estimator to fix
an amount without seeing and studying them in detail. Such items are
known as spot items.
• The estimate of such items can be prepared only after inspection and taking
detailed measurements at site.
• Examples
▫ Demolishing existing structures
▫ Constructing openings in the existing wall
▫ Clearing the site
▫ Connecting an old building to a new building, etc.
• The estimator should give detail and precise description of the spot items
so that the contractor can put up a more accurate price for such items.

8. Day work
• During execution of a project there may be certain type of works, for which
the actual quantities of labour required is difficult to measure.
• For example fine architectural works, and drawings in the wall. The
payments towards such items are made on the basis of actual number of
days or actual quantity of materials required. Such works are known as day
works.
• The day work is adopted for certain complicated items of work which can
not be measured as a design in the plaster work, front architectural finish of
a building, work under water, ornamental door etc. are valued and paid by
day work.

9. • If a considerable amount of day work is involved, it is a general practice to
include a schedule of materials and labours in the tender form.
• It should be clear mentioned in the specification that the day work prices
quoted by the contractor should include the following:
▫ Cost of transport of material at site
▫ Contractor’s supervision
▫ Contractor’s profit
▫ Contractor’s overhead charges
▫ Use of contractor’s equipment
• The day work should not be commenced till the necessary sanction has
been obtained form the engineer appointed by the owner. The contractor
should start the work after giving necessary notice to the engineer so that a
close match can be maintained on the work.

10. Contingencies
• There are certain expenses which are incidental in nature and it is not
possible to predict them with reasonable accuracy. To cater all such
expenses an additional amount of 3% to 5% of estimated cost is provided
in the total estimate.
• For example, suppose there is an item in an estimate for cement plastering
1:4 with neat cement finish, but during execution, it is desired to provide
nosing at the end of steps, as there is no allocation of funds for this small
work, the cost of such work may be met up from the contingency fund. But
in case an expenditure is necessary due to change of design fund,
supplementary or revised estimates are submitted for its sanction before
taking up the work.

11. • If there is any saving against the amount provided under contingencies, this
amount may be utilized with the sanction of the component authority, to
meet the expenses of extra items of work.
• The provision for contingencies may not be diverted to any new work or
repair which is not provided in the estimate and of which cost exceeds
Rs.2000/- without the sanction of superintending engineer.

12. Work charged establishment charges
• During the construction of a project considerable number of skilled
supervisors, work assistance, watch men etc., are employed on temporary
basis. The salaries of these persons are drawn from the L.S. amount allotted
towards the work charged establishment.
• For such work charged establishment an amount of 2 to 2.5% (accordingly
to the practice of P.W.D) of the estimated cost of works is provided in the
estimate.
• Generally work charged persons are employed on monthly basis or
temporary basis according to the progress of the work. Their services last
for the sanctioned period but may be continued on fresh sanction. Their
services are terminable by one month’s notice for one year continuous
service. But for less than one year service 14 days notice is required to
terminate their services.

13. Water charges
• For drinking purpose of the workers and for the work, arrangement of
water either by sinking tube-well or by taking temporary water connection
from the corporation or municipality becomes necessary.
• In order to meet up the expenses an amount of 1 % 1.5% of the total cost of
material and labour has been provided in the analysis of rate.

14. Overhead charges
• Overhead charges include general office expenses, rents, taxes, salaries of
office staff, and other costs which are indirect expenses and not productive
expenses on the job.
• General overheads:
▫ Establishment (office staff)
▫ Stationary, printing
▫ Postage
▫ Travelling expenses
▫ Telephone
▫ Rent
▫ Taxes
▫ Electrical bills, etc.

15. • Job overheads:
▫ Salary of engineers, supervisors
▫ Handling of material
▫ Repair, carriage and depreciation of tools and plants (T&P)
▫ Amenities of labour
▫ Workmen’s compensation , insurance, etc
▫ Interest on investment
▫ Lighting at site
▫ Public relations
▫ Theft, etc.