Construction Cost Estimating

Len Holm, John E. Schaufelberger

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000345131
• Edition: 1
• Topic: Tecnología e ingeniería
• Subtopic: Construcción e ingeniería arquitectónica

Construction Cost Estimating equips a new generation of students and early-career professionals with the skills they need to bid successfully on projects. From developing bid strategies to submitting a completed bid, this innovative textbook introduces the fundamentals of construction estimating through a real-life case study that unfolds across its 24 chapters. Exercises at the end of each chapter offer hands-on practice with core concepts such as quantity take-offs, pricing, and estimating for subcontractor work. Online resources provide instant access to examples of authentic construction documents, including complete, detailed direct work estimates, subcontractor work estimates, general conditions estimates, markups, and summary schedules.

Through its unique mix of real-world examples and classroom-tested insights, Construction Cost Estimating ensures that readers are familiar with the entire estimating process even before setting foot on the jobsite.

Part I

Introductory concepts

1 Introduction

The estimating process

Estimating can be defined as the process of determining the approximate cost of performing a work task based on the design information available, which is not always complete. For the general contractor (GC), estimating and their ability to do it accurately and reliably is a critical component to the success of each project and ultimately the success of the company. Many construction companies have suffered bankruptcy because of estimates that were not done properly or completely. Note we will utilize the terms general contractor and construction manager (CM) throughout this book, and although we define differences between the two terms in Chapter 4, we consider them synonymous with respect to the process of preparing construction estimates.

This book will provide students with the information, techniques, and forms required to determine accurate quantities, apply reasonable pricing for labor, materials, equipment, and subcontractor scopes, and determine appropriate markups, with the end result being accurate and complete estimates that will result in profitable construction projects. The book will provide detailed analysis for GC self-performed work such as cast-in-place concrete, concrete reinforcement, structural steel, rough and finish carpentry, doors and windows, and architectural specialty materials as well as methods for determining accurate costs for many areas of subcontracted scopes of work.

We have included detailed explanations of the different types of estimates that a contractor will perform in connection with the types of contracts that are used in the industry and how to accurately determine the jobsite general conditions necessary to successfully manage a construction project. In addition, risk management, estimate markups, and use of contingencies along with the important issue of ethics that all GCs must face are threaded throughout the book.

Estimating is not a simple task or a process that should be taken lightly but rather could be argued as the single most important objective for GCs to perform at the highest level. Without qualified estimators and successful estimates, contractors do not land construction contracts. Hopefully, this book will provide the reader with the skills necessary to begin to develop highly accurate and reliable construction cost estimates.

Construction estimates are prepared throughout the design process of a project, beginning with programming and conceptual phases followed by schematic design, design development, and construction documents. The estimates that are prepared at each of these design phases are different in their level of detail and completeness but similar in the process of developing any cost estimate. It is important for the contractor to be able to communicate accurate and reliable estimate information to the project owner and designers throughout the design process so that the design, as it progresses, can be constructed for the budget established by the owner. Subsequent chapters in this book will describe in detail the process for preparing estimates at each phase of the design and how those estimates would be used.

Figure 1.1 Estimating process

The estimating process as described in this book is a series of calculated steps leading to the preparation of a complete and accurate total price for bid day or a proposal on a negotiated project. These steps are reflected in Figure 1.1, which will be referred to through this book. It is recommended that the reader bookmark this figure for future reference. An additional copy has been included on the book’s eResource, which we recommend readers print out and use as a bookmark. Two of the very important first steps undertaken by the estimator are the preparation of a schedule to complete the estimate and a work breakdown structure (WBS), both of which are discussed in the next two sections.

Estimate schedule

When possible, the project manager, experienced project engineer, and superintendent should be responsible for developing the estimate or, at a minimum, work as integral members of the estimating team. Their individual inputs regarding constructability and their personal commitments to the estimating product are essential to ensure not only the success of the estimate but also the ultimate success of the project. One of the first assignments for the estimating team is to develop a responsibility list, strategize their approach to the estimate, and to schedule the estimate. The estimating process should be scheduled for each project beginning with the dates for the pre-bid or pre-proposal conference and the end date the bid or proposal is due. With these milestones established, a short bar chart schedule should be developed that shows each step and assigns due dates to the estimating tasks depicted in the estimating process, Figure 1.1. The estimate schedule itself is included in step 2 of that figure. Familiarity with the steps or building blocks is essential in developing the schedule. Each team member is relying on the others to do their jobs efficiently and accurately and timely. Similar to a construction schedule, if one of the individuals falls behind on any one activity, the completion date may be in jeopardy or the quality of the finished estimate will be affected unless other resources are applied. An example of an estimate schedule for our case study project is included as Figure 1.2.

Figure 1.2 Estimate schedule

Work breakdown structure

When the officer-in-charge decides to bid a project, the first job of the estimator is to plan and strategize the estimating process. One of the best organizational tools is the work breakdown structure. This is reflected as step 3 in Figure 1.1. This is simply an outline of the activities necessary to construct the project. The benefit of the WBS is that it takes a seemingly large complex project and turns it into many easy-to-manage segments. The WBS will be used, upon winning the project, for planning and scheduling, which in turn influences many of the project management activities. Making a comprehensive outline at this point is thus beneficial to later operations as well as to the estimating process. As a prelude to discussing the WBS, certain terms need to be defined. These are:

• Element or activity: A description of work such as concrete footings, steel erection, structural excavation, etc.
• Task: Specific tasks that need to be done to complete an activity. Form, fine grade, install reinforcing steel, place concrete, and finish and strip forms are six of the tasks that are required to complete the concrete footings.
• Basic outline: The basis of the WBS is the Construction Specification Institute (CSI) numbering system. The basic outline is therefore the CSI division and section numbers.
• First level expansion: The WBS expanded to show activities within a CSI division.
• Second level expansion: A second expansion of the WBS to task level.

Further expansion of the WBS beyond the second level by the project estimator results in such incremental detail that it is not always useful. Within estimating, and throughout our approach to construction management, we practice the 80-20 rule. This means that 20% of the systems, assemblies, tasks, or work items make up 80% of the cost or direct labor hours and therefore 80% of the risk for the contractor. It is those 20% that the estimator must pay the closest attention to. The first two levels of the WBS are used when planning and scheduling a project; thus their use in estimating helps to prepare the project team for the work after winning the bid. Expansion to the task level provides a comprehensive guide and checklist for the estimating process and should be referred to frequently to ensure that all items have been quantified and priced.

When creating a WBS, a good approach is to visualize how the project will be built. The CSI MasterFormat that is used for most estimating and technical specifications provides the general order of the work. For example, the first activities might be to clear and grade the site and install site utilities. This work use to be specified in CSI division 02 but is now in 31–33. Chapter 3 includes tables comparing the previous to new CSI division assignments. The substructure, which encompasses the structural excavation and concrete foundations, is found primarily in CSI division 03. The superstructure activities can be found in divisions 03 through 06. Divisions 07 through 14 are basically nonstructural items such as thermal and moisture protection, finishes, and various equipment and specialties, including elevators. Mechanical and electrical systems use to be specified in CSI 15 and 16 but are now in divisions 21–27. This basically is the order of construction of most projects. Figure 1.3 shows a partial WBS for the book’s case study project.

Figure 1.3 Work breakdown structure

When starting on a WBS for a new building an estimator may organize it in major divisions, such as: (1) foundations, (2) substructure, which could include foundations, (3) above-grade superstructure, (4) enclosure, (5) roofing and others. The substructure includes the cast-in-place concrete footings, foundation walls, pits, machine foundations, and any other concrete that is generally below the ground level of the building. For our case study project, we chose to further define foundations as spread footings, continuous footings, and grade beams.

Division 03 within the substructure includes the slab-on-grade (SOG). In many projects, the SOG is commonly placed prior to the steel erection, thus giving the ironworkers a stable working platform. Where very heavy equipment is needed for structural steel erection, the SOG may be placed after the framing and roof panels are in place. Buildings comprised of tilt-up concrete construction usually need the SOG as a place on which to cast the panels. A closure strip for the SOG is then placed after the tilt-up panels have been set and secured. It can be argued that the SOG may be either a part of the substructure or of the superstructure. It does not matter as long as there is consistency from project to project. For our case study project, we considered the SOG as part of the substructure because it is two stories below grade.

The superstructure is all of the structural work above the ground. This includes structural concrete and steel from the foundation to the roof, including elevated floor slabs and pre-cast concrete items. Pre-cast concrete elements can be either constructed by the GC or purchased from a supplier. Either way, the GC usually installs them. Generally, most pre-cast elements are purchased, but tilt-up walls are constructed on the project site and lifted into place.

A miscellaneous category may be included in CSI division 03 to list activities for exterior concrete work. This includes sidewalks, extruded curbs, the curbs and gutters along pavement, as well as concrete pavement. Some estimators may include site concrete with the site work portion of the WBS and estimate, as that is where the work is shown on the drawings and typically when it will be constructed. Depending on the work specified, these activities may be self-performed by the GC or subcontracted. Subcontractors frequently have specialty equipment for building these curbs and walks and thus may be more cost effective than the GC. If, however, the work is only flat work such as pavement and sidewalks, the GC may be able to do the work more efficiently. We have chosen to include the estimate for site concrete with other site work activities. So in a sense there are ‘rules’ w...