ESTIMATING

IMPP161

Luke 14, 28-3028Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? 29For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, 30saying, 'This fellow began to build and was not able to finish.'

Henry IV, Part IIWhen we mean to build,We first survey the plot, then draw the model,And when we see the figure of the house,Then must we rate the cost of the erection,Which if we find outweighs ability,What do we then but draw anew the modelIn fewer offices, or at least desistTo build at all?

Estimating paper

Basic estimating procedure Building up unit rates including the “Four

Ms” – manpower, materials, money and machines (labour, materials, monetary sums including subcontract amounts, and plant)

Basic costing process consists of quantification (measurement), calculation of unit rate (net) - net cost is the product of the two

Example: 50m3 of concrete @ $185/m3 = net cost of $9250

Basic estimating procedure -1809

Basic estimating procedure

For digging stones for building 294 yds @ 8d = £ 9.16.0 For building the house 294 yds @ 14d = £17. 3. 0 220 feet of timber @ 4/6 = £49.10.0 All sorts of nails = £ 3. 0. 0 Hinges, latches and smyth’s work = £0 .15. 0

Bodenlli Farm, Anglesey (Wales) 1809

Building costs Project size Project complexity Nature of project – new materials, new

processes and techniques Location – accessibility, transport, climate,

topography Market conditions Different interpretation of documents – non-

conforming/qualified tenders

Building costs

Procurement method (type of contract) Contract conditions (e.g. restricted working

hours) Resource availability (e.g. skilled labour,

special plant) Statutory requirements

Composition of costs

Labour – direct and sub-contract Materials (including delivery,

unloading, storage) Plant – machinery, tools Monetary allowances – P.C.

provisional, contingency Preliminaries Overheads Profit

Pareto distribution

Class exercise

Estimating practice

Net rates for labour, materials and plant Monetary sums Price Preliminaries to arrive at total net

cost Management then adds amounts

(percentages) for general overheads and profit to arrive at tender sum

Labour

Direct labour – employed directly by the builder/contractor – “charge-out rate” must include allowances for unproductive time, annual leave etc

Sub-contract labour – subcontractors may provide labour only or labour and materials for a specific part of the works, e.g. supply and fix reinforcement

Materials Purchase (less discounts) Cartage Unloading and storing Allowance for shrinkage or bulking Allowance for fixing and sundries Allowance for wastage

BQ quantities are “net fixed in place” – (cf. builder’s bill)

Plant Minor plant – e.g. small tools,

wheelbarrows – if not supplied by sub-contractor include in general overheads

Major plant – used across the job, e.g. tower crane, hoist, scaffolding – price in Preliminaries

Special plant – used by one trade, e.g. concrete pump – may be costed in Preliminaries, in preambles or in individual work items

Plant

Plant may be hired, leased or owned outright – costs vary depending on situation: daily hire, weekly hire, lease costs, depreciation, operating expenses, maintenance, security, insurance, floatage

Costs may be affected by strikes, bad weather, site delays, breakdowns, site conditions

Monetary sums or allowances

P.C. (Prime cost) sums Provisional sums Contingency sums

Monetary sums will be discussed in a later lecture

Preliminaries

Job-specific overheads and costs that are not part of the physical works – e.g. site sheds, insurances

May be anywhere between 5 and 20% of the total cost

Many items are time-dependent e.g. shed hire, temporary services – others are not, e.g. reinstatement of footpaths, council fees

General overheads Cost of running the business (not

specific to any one project) e.g. head office rent, estimators’ salaries

Typically added to the net estimate as a percentage – determined either by comparing anticipated total overheads to anticipated turnover for the period or by comparing the same figures from previous periods (month, quarter, year)

BQ items deemed to include

The ASMM states Clause 4.5, p.4): Unless otherwise stated herein the items in the

Bills of Quantities shall be deemed to include: Materials and goods including materials

required for lapping, jointing and the like and all costs in connection therewith such as conveyance, delivery, unloading, storing, returning packaging, handling, hoisting and lowering

BQ items deemed to include

• Square, raking, splay and circular cutting

• Waste of materials• Labour and all costs in connection

therewith including the labour in drilling, setting, fitting and fixing of materials and goods in position

• Establishment costs, overhead costs and profit

BQ items deemed to include

• Plant and equipment• Taxes, overtime, bonus and incentive

payments, duties and royalties• Protection of work against damage

except where specific means of protection are stated in the contract documents in which case items shall be given in the appropriate sections

Status of the BQ

• In Australia, generally not guaranteed and therefore not part of the contract documents

• Paid for and provided by the client• Tenderers use at their own risk• Importance of “Measurement and

Prices” clauses• Example: Demolition (next slide)

Status of the BQ

• “measurement and prices deemed to include for: removing all rubbish and debris, making good to work disturbed, temporary shoring (other than designed shoring) and similar items” (ASMM, p. 13)

Estimating procedure

Tender preparation is a three stage process: measure, price, finalise

Measuring – items of work, materials, labour only items, allocation of monetary sums

Pricing – predicting net cost to carry out the work

Finalisation – subsequent commercial function based on the estimate

Estimating procedure

The estimator is mostly concerned with stage 2 but must be able to carry out stage 1 if quantities are not provided and must understand stage 3 as he/she will work with management to put the final tender together

Estimating procedure

An estimate must be clear and consistent – taking account of methods of construction and all other factors that may affect the cost

The estimate should be an estimate of cost (to the builder) without adjustment for overheads pr profit

Estimating procedure

Preliminaries costs are added after a construction programme has been determined (as many Preliminaries items are time-based)

Allowances for general overheads, risk and profit are added by management

How these allowances are distributed against items (through the BQ) is up to management

Estimating procedure Invitation to tender Public tender Inspection of tender documents Sufficient time allowed? Contract? Risk allocation? Complete documents? Estimating team – current workload Is there a BQ? Can we handle the project? Can the client handle it?

Estimating procedure

Information required regarding:

Starting and completion dates Staging Access Restrictions Dangerous or unpleasant conditions

Estimating procedure -site

Position of site re transport Local authorities Topography of site (surveys) Adjoining properties, fences, roads etc

– condition Demolition? Temporary works? Possible site layout Ground conditions (geotech survey) Disposal – waste, spoil

Estimating procedure - site

Services – water, electricity, telephone, data

Security Labour availability Materials ditto Weather conditions Applicable regulations

End