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# 3.estimating

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### 3.estimating

1. 1. Ahmed Elyamany, PhDOctober 31/November 3, 2010
2. 2. • •• •• •• •• •• ••
3. 3.  Write a short report (not less than 800 words) in one of the following topics: ◦ Egyptian Contractors Union ◦ Contractor prequalification ◦ Qualifications of Project Manager ◦ Software used in Estimating The report should include: ◦ Cover Page- Introduction- Discussion- Conclusion- References The evaluation criteria are: ◦ Organization 25% ◦ Discussion 50% ◦ References 25%.
4. 4.  By the end of this lecture, you will:1. Define the meaning and steps of Estimating.2. Differentiate between Estimation and Calculation.3. Estimate the cost of different construction activities.4. Define the Method Statement.5. Prepare a Method Statement for different construction items. 4
5. 5. Definition: To judge approximately the value or produce the approximately cost of project.Process: Planning and scheduling the estimate Project study - Collection of cost information and rates Preparation of method statement Assessing output of selected resources Calculation of the direct cost of each item Calculation of the site overhead Estimator report
6. 6. Planning and scheduling the estimateProject study Collection of cost information Calculation of rates - - all-in labor rate - - - - all-in plant rate - - material cost - - - sub-contractor cost - Preparation of method statement Assessing output of selected resources and elapsed time of resources Calculation of the direct cost of each item Calculation of the site overhead Estimator report
7. 7. 
8. 8.  Drawings Specifications Contract conditions Meeting with the owner and architect Site visit
9. 9.  General description. Soil. Topography. Transportations. Utilities. Labors. Safety arrangements. Temporary buildings. Neighbors.
10. 10.  Collection of cost information: ◦ Daily cost of labor. ◦ Daily cost of equipment. ◦ Cost of materials. Calculation of rates: ◦ All-in labor rate ◦ All-in plant rate ◦ Material cost ◦ Sub-contractor
11. 11.  All-in labor rate (LE/day) =  + )–  ( + +
12. 12.  All-in plant rate (LE/day) =  + + )–  ( +
13. 13.  A statement of the construction methods and resources to be employed in executing construction work. This statement is normally closely linked to the tender program Major factors in planning a method statement : ◦ Cost ◦ Time ◦ Resource availability ◦ Quality ◦ Health, Safety, and Environment
14. 14. Alternative methods of construction Alternative Sequence of work Alternative rates of construction Alternative site layout Preferred method of construction Pre-tender construction program Sequence of Duration of Duration of Labor & plantmain activities main activities overall project required
15. 15.  Qualitative sequential screening for Alternative methodsAlternative methods Acceptable to Feasible Adequate Safety consultant? qualityPlywood √ √ √ √Rough-swan √ √ √ √Steel √Brick √ √ √Corrugated ironCorrugated asbestos √ √ √ √Trench sides
16. 16.  Cost and time comparison for 3 shuttering methods that pass the previous screening process Cost / unit of shutter plywood Swan board AsbestosMaterial cost (LE) 20 4 3Off-site making cost (LE) + 19 -- -- -Residual value (LE) 4 -- --Number of uses / 10 3 1On-site making cost (LE/use) + 8 9.5 10 {(20+19-4)/10} (4/3)+9.5 3+10Total cost / use (LE/use) +8 =11.5 =10.83 =13
17. 17.  Methods of Estimating ◦ Unit method  ◦ Space method  ◦ Element method  ◦ Spot method  ◦ Detailed cost method 
18. 18.  Detailed cost method  Unit rate method  Operational method
19. 19.  Quantity of Plain concrete = 1080 m3 1 m3 of P.C. consists of (250 kg cement + 0.8 m3 gravel + 0.4 m3 sand) Vendor price of 1 m3 of P.C. =250 LE / m3 Estimate Item price for plain concreteEquipment crewNo. Equipment Production rate All - in rate1 Pump 30 m3/hr 650 LE/day3 Truck mixer 9 m3/hr/one 520 LE/day/one2 Vibrator ------- 150 LE/day/one Labor crew No. All – in rate Foreman 1 90 LE/day Laborer 5 55 LE/day/one
20. 20. Material costAssume allowable for (Handling + wastage + price increase + discount) = 22 %Cost of 1 m3 of PC = 250 x 1.22 = 305 LE/m3Material cost = 1080 x 305 = 329,400 LELabor costLabor crew cost / day = 1 x 90 + 5 x 55 =365 LE/dayProduction rate = 30 OR 3 x 9 = 27 Choose 27 m3/hrDuration = 1080 27 = 40 hrAssume: one day = 8 hrDuration = 40 8 = 5 daysLabor cost = 5days x 365 LE/day = 1,825 LE
21. 21. Equipment costEquipment crew cost = 650 +3 x 520 + 2 x 150 = 2,510 LE/dayDuration = 5 daysEquipment cost = 5days x 2,510 LE/day = 12,550 LEItem costTotal item cost =329,400 +1,825 +12,550 =343,775Assume price factor = 1.25Item price = 343,775 x 1.25 = 429,718.75 LEItem unit price = 429,718.75 LE 1080 m3 = 397.89 LE/m3
22. 22. Definition : A sum of money to cover costs which are forecasted but are difficult or impossible to identify when proposing.
23. 23. Example If you know that site overheads = 10% direct cost and mark-up = 15% construction costCalculate :1) Total direct cost, construction cost, tender price, and unit price of each item for the project assuming no contingency is added to the total cost estimate2) The amount of contingency to be added to the total construction cost estimate using the expected net risk analysis method3) The final cost estimate and final tender price assuming uniform distribution of contingency
24. 24. Direct cost Maximum %No. Item Unit Quantity cost probability Material Equipment labor S/C1 LEFT ABUTMENT m3 120 9,000 3,000 4,000 - 19,000 14%2 CENTER PIER m3 100 7,000 200 1,000 - 10,000 12%3 RIGHT ABUTMENT m3 120 9,000 4,000 2,000 - 19,000 19%4 DECK m3 140 12,000 3,500 1,500 - 20,000 13%5 PRE-CAST SPAN m3 job - - - 10,000 12,000 6%6 FINISHES m3 job - - - 50,000 60,000 12%
25. 25. Solution:Construction cost = direct cost * 1.10Tender price = construction cost * 1.15 = 1.10 * 1.15 * direct cost1) tender price = 1.265 D.C. X 1.1 X 1.15 total direct cost = 116,200 construction cost = 127,820 case 1 tender price = 146,993 Direct construction item No. cost cost price 1 16,000 17,600 20,240 2 8,200 9,020 10,373 3 15,000 16,500 18,975 4 17,000 18,700 21,505 5 10,000 11,000 12,650 6 50,000 55,000 63,250 Totals 116,200 127,820 146,993
26. 26. Contingency calculation - construction construction max max x case 2 max. max. case 2 % % net net expected final itemNo.No. cost cost risk prob. risk Cost price cost cost risk prob. risk 1 17,600 19,000 1,400 14% 196 17,822.73 20,496.14 1 17,600 19,000 1,400 14% 196 2 9,020 10,000 980 12% 117.6 9,134.15 10,504.27 3 16,500 19,000 2,500 19% 475 16,708.81 19,215.13 4 18,700 20,000 1,300 13% 169 18,936.65 21,777.15 5 11,000 12,000 1,000 6% 60 11,139.21 12,810.09 6 55,000 60,000 5,000 12% 600 55,696.03 64,050.43 Total 127,820 1617.6 129,437.56 148,853.20From the table aboveamount of contingency to be added = 1617.6contingency as % of total construction cost = (1617.6/127,820)*100 = 1.265 %Total cost with contingency = 127,820 * 1.012655 = 129,437.56Tender price with contingency = 129,437.56 * 1.15 = 148,53.2
27. 27. Q1-Select the best answer for each of the following sentences:1. The invitation to bidding should include: A)Drawings. B)Specifications. C)Initial and final bond. D)Bill of Quantity2. In a certain highway project, the contractor decided to add site overhead equal to 15% of direct cost, general overhead equal to 5% of construction cost, and profit & risk equal to 5% of net cost. The price factor should equal: A)1.25 B) 1.0 C) 1.2678 D)25%3.The Profit & Risk is added to the project cost by the: A)Estimator. B)Owner. C)Architect/Engineer. D)Senior manager.4.The supplementary conditions may include: A)Project duration. B)Payment system. C)Claims and change orders system. D)All the above.5. Contract documents do not include: A)Drawings. B)Priced Bill of Quantity. C)Letter of offer. D)Contract conditions.
28. 28. Questions? 28