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What are the phases of construction cost estimating

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What Are the Phases of Construction Cost Estimating?

Review:

Understanding the phases of construction cost estimating is crucial for successful project planning and budgeting. This comprehensive guide breaks down the process into five key phases, each serving a specific purpose. The positive aspects of this resource include:

  1. Clarity: The article provides a clear and concise explanation of each phase, eliminating confusion and making it easy for readers to grasp the concepts.

  2. Step-by-step approach: The guide follows a logical order, presenting the phases in a sequential manner, allowing readers to fully understand the progression of cost estimating.

  3. Detailed descriptions: Each phase is explained in detail, including its purpose, activities, and deliverables. This level of depth ensures that readers gain a comprehensive understanding of the process.

Benefits of Understanding

In construction, estimation is the process of forecasting the costs of building a structure. The estimating process may span several phases of a project, mirroring concept, schematic design, design development, and final construction documents.

What are the 5 levels of cost estimation?

The American Society of Professional Estimators (ASPE) defines estimate levels in the reverse order as Level 1 – Order (Range) of Magnitude, Level 2 – Schematic/Conceptual Design, Level 3- Design Development, Level 4 – Construction Document, and Level 5 – Bid.>.” ACostE defines a Class I Estimate as definitive, a Class

What are the steps in cost estimation process?

Here are seven steps you can follow to complete a project cost estimate:
  • Define the purpose of the estimate.
  • Describe characteristics of the project.
  • Develop a plan for the estimate.
  • Determine your approach to the estimate.
  • Manage data collection.
  • Document the estimate.
  • Present the estimate to management.

What are the six steps of cost estimation?

How does cost estimating work? 6 steps to learn
  • Agree on estimating basis.
  • Collect scope documentation.
  • Estimate direct cost.
  • Estimate other costs and apply factors, indexation and escalation.
  • Peer review.
  • Finalize basis of estimate report and send estimate for approval.

What are the 7 phases of construction project?

This course describes the fundamental elements of a project's lifecycle stages, including Stage 1 - Conception, Stage 2 - Planning & Design, Stage 3 - Construction, Stage 4 - Commissioning & Turnover, Stage 5 - Occupancy or Use, Stage 6 - Renewal, and Stage 7 - Demolition.

What are methods of estimating project costs?

There's statistical modeling or parametric estimating, another cost estimation method that also uses historical data of key cost drivers and then calculates what those costs would be if the duration or another of the project is changed.

What is the most common way for contractors to estimate costs?

Bidding

The most common estimate is the one for bidding. These estimates must have a high level of detail and accuracy. They determine not only who will get the project but also whether that company will turn a profit at the end. You will also usually include prices from subcontractors.

Frequently Asked Questions

What is the most accurate method of estimating the cost of a building project?

Bottom-Up Estimating

The most accurate and time-consuming estimating method is to identify the cost of each item in each activity of the schedule, including labor and materials.

What are the three 3 type of construction cost estimates?

Cost estimates are broken down into three categories that serve one of three basic functions: design, bid, and control.

What should a contractors estimate include?

A contractor's estimate should include:
  • Itemized costs of materials.
  • All labor costs.
  • Costs of hiring any subcontractors.
  • Estimated total before taxes and fees.
  • Taxes and fees.
  • Profit and overhead.

How do you calculate construction overhead cost?

To calculate your construction overhead, add up the monthly fixed costs of running your business. Some find it easier to add up your annual costs, and then divide by 12 to get your monthly expenses. The resulting figure is the amount of money you must make each month to keep your business alive.

What is the formula for cost estimation?

The goal of each cost estimation method is to estimate fixed and variable costs and to describe this estimate in the form of Y = f + vX. That is, Total mixed cost = Total fixed cost + (Unit variable cost × Number of units).

How do you create a construction cost database?

Tips for Building a Construction Cost Database
  1. Make names as short and obvious as possible and use CamelCase.
  2. Start as generic as possible and only add new variables as they are needed.
  3. A variable can only be asked once in an assembly, no matter how many times it is used.

How to do a cost estimate for a construction project?

Construction Cost Estimating: A Step-By-Step Guide
  1. Review bid package.
  2. Conduct a site visit.
  3. Perform a material takeoff.
  4. Solicit pricing from suppliers and vendors.
  5. Evaluate labor requirements.
  6. Determine insurance and bonding costs.
  7. Calculate overhead and indirect costs.
  8. Account for profit and contingency.

How do you write a good construction estimate?

How to Write an Estimate for a Construction Job
  1. A detailed project scope outline/description of work being done from prep to cleanup.
  2. List of materials needed.
  3. Itemized breakdown of material, labor, equipment rental, overhead, and profit margin costs.
  4. Total cost of the job.
  5. Payment terms and due dates.

FAQ

What are the five categories to be considered in pricing a construction estimate?

Hear this out loudPauseThe contractor's risk is the single factor that impacts on all five price categories (Labor, Equipment, Materials, Subcontractors, Job overheads) of a construction estimate.

What is cost database in construction?

Hear this out loudPauseA cost database is a computerized database of cost estimating information, which is normally used with construction estimating software to support the formation of cost estimates. A cost database may also simply be an electronic reference of cost data.

How do you estimate a construction project?
Construction Cost Estimating: A Step-By-Step Guide
  1. Review bid package.
  2. Conduct a site visit.
  3. Perform a material takeoff.
  4. Solicit pricing from suppliers and vendors.
  5. Evaluate labor requirements.
  6. Determine insurance and bonding costs.
  7. Calculate overhead and indirect costs.
  8. Account for profit and contingency.
What is the most important document on a construction project?

The construction contract agreement is the primary document for most construction projects. It's the principal agreement between a business's contracting office or a private property owner and a contractor. Most other contract documents will refer to or attach to the construction contract agreement.

What are the construction documents?

A set of construction documents is a set of drawings that an architect produces during the design development phase of a construction project. They serve as a project manual during the construction phase, and they assist permitting agencies and inspectors from local governments, who have to clear the project.

What should a construction estimate include?
A contractor's estimate should include:
  • Itemized costs of materials.
  • All labor costs.
  • Costs of hiring any subcontractors.
  • Estimated total before taxes and fees.
  • Taxes and fees.
  • Profit and overhead.
How do you calculate future construction costs?

Hear this out loudPauseWhen creating a construction cost estimation for a project bid, data from the project's construction documents like the design estimate, subcontractor's quotes, quantity takeoffs – material costs, construction processes, direct and indirect costs and your profit margin are used to make a more detailed cost estimate.

What are the methods of estimating construction costs?

Hear this out loudPauseEstimating Methods. There are four primary methods used to estimate construction costs. Those methods are known as Project Comparison Estimating or Parametric Cost Estimating, Area & Volume Estimating, Assembly & System Estimating, and Unit Price & Schedule Estimating.

What are the phases of construction cost estimating

What are projected costs in construction?

Hear this out loudPauseThe Projected cost refers to the amount that a job is likely to cost upon completion, based on actual costs at any given point. A worksheet may be printed and given to the project manager for completion so that projected costs are routinely updated.

What is the construction cost trend in 2023?

Hear this out loudPauseConstruction Cost Index Q2 2023 | Mortenson. Nationally, nonresidential construction costs increased this quarter by +1.28%, and year over year cost increases continue to flatten, slowing to +2.94% over the previous 12 months.

How do you calculate project forecast cost? This boy give us a forecast for the total cost of the project at any time, aaaand there are 4 ways to calculate this metric:
  1. EAC = AC + ( BAC - EV )
  2. EAC = BAC / CPI.
  3. EAC = AC + ((BAC - EV) / CPI)
  4. EAC = AC + ((BAC - EV) / (CPI * SPI))
How do you calculate project cost? How to estimate project cost and time in 7 easy steps:
  1. Know your team's expertise & job responsibilities.
  2. Understand how your company's PM process works.
  3. Study project estimation techniques and trends.
  4. Use historical data to create better project estimates.
  5. Ask detailed project questions to improve cost estimation.
What are the methods of calculating construction costs?

Estimating Methods. There are four primary methods used to estimate construction costs. Those methods are known as Project Comparison Estimating or Parametric Cost Estimating, Area & Volume Estimating, Assembly & System Estimating, and Unit Price & Schedule Estimating.

Who calculates how much a project will cost?

Project manager

A project manager must determine the funds needed for a project to be completed successfully, which is where cost estimation comes into play. This process can provide an approximate idea of the budget required for your venture.

What are the three types of construction cost estimates? 3 types of construction cost estimating
  • Estimating with unit rates. A unit-rate contains the average amount of resources you need to install one unit (piece, meter, kg, etc.)
  • Resource-based estimating. When an MTO is available it makes sense to use unit-rates for your estimates.
  • Factor estimating.
Who can estimate the costs of a building?

METHOD 3: USE A QUANTITY SURVEYOR

Their estimates on a job are still exactly that – estimates but it's based on market rates and up-to-date experiences on how much things cost.

  • How do you estimate the cost of a construction project?
    • Construction Cost Estimating: A Step-By-Step Guide
      1. Review bid package.
      2. Conduct a site visit.
      3. Perform a material takeoff.
      4. Solicit pricing from suppliers and vendors.
      5. Evaluate labor requirements.
      6. Determine insurance and bonding costs.
      7. Calculate overhead and indirect costs.
      8. Account for profit and contingency.
  • Who creates estimates for the project budget?
    • The project manager

      The project manager is responsible for making the most accurate project budget possible by using a cost breakdown structure and project estimating techniques.

  • What is the difference between a cost plan and a cost estimate?
    • A cost estimate provides a single snapshot of the estimated final construction cost of a project, during a point in time in the development of design. A cost plan is a more strategic document and can consist of series of cost estimates which are formed at various stages of design development.

  • How do you estimate how much a project will cost?
    • A typical cost estimation process can look like this:
      • Rework their idea.
      • Consider conducting a project discovery.
      • Break down the project into phases and tasks.
      • Calculate the cost for each task.
      • Identify if you have enough resources to complete the project.
      • Calculate the total cost of the project.
  • What is the formula for estimated cost?
    • The goal of each cost estimation method is to estimate fixed and variable costs and to describe this estimate in the form of Y = f + vX. That is, Total mixed cost = Total fixed cost + (Unit variable cost × Number of units).

  • What is the most accurate project cost estimate?
    • The Definitive Estimate is the most accurate and detailed. It's made after the project's scope and requirements are well-defined and detailed. It includes a comprehensive breakdown of all costs, including labor, materials, equipment, and other expenses, and has an accuracy range of -5% to +10%.

  • How to create construction price list
    • Using a tentative design and lists of expected materials and quantities, estimators provide a rough estimate for the project. 4, Construction documents, Using a 

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