The Benefits of Architect & Development Firms to Hire Independent Cost Estimating

Firms.

More then ever the construction industry is a whole new business now and companies are moving in any direction that will help keep them lean and profitable with out giving up quality of product.

So in these times why would an architect or developer pay for a cost estimate when they can get it for free from a General Contractor?

I write this article and note these items having been a General Contractor and a General Contracting Estimator for the past three years and experiencing first hand the flaws in obtaining a free estimate from a G.C.

Cost Estimates can range from “bar napkin sketches” – single floor plan and elevation pages- partial complete to fully complete drawing and specifications.

These estimates can be used to set budgets, develop architect or engineer estimates, set funding requirements, or most importantly determine if the project will go forward or collapse all together.

Unless the GC has been selected early in the design stage and is working with the design team from day one, they really have no interest in getting you as close to accurate information that you need.

If they are busy, chances are your request will be handled quickly or passed off to someone that is not fully experienced in providing estimates and will call sub-contractors who maybe just as busy and will throw out quick and not complete numbers just to stay on the GC’s good side?

• How much real time do they invest in something that could make or break your opportunity with your client?

• Are they providing low or unrealistic estimates with the full intent of staying involved in this project from the start?

• Are they representing the best interest of the architect & developer or theirs?

• How beneficial it is to have an Independent Opinion Of Probable Cost from a person that has no interest in

building the project whatsoever?

• Do they have a Certified Professional Estimator (CPE) on staff that takes pride in his estimate and adheres to the standards

set forth by the American Society of Professional Estimators (ASPE)?

• The independent estimator wants to keep you as a client forever and will be making sure that “change order creep” does not

hurt you or your reputation.

• How many GC’s still wanted to remain on the architects or developer’s team (or vice a versa) after the project is over? And

is adversity the usual outcome?

• What is it worth to have an experienced and accredited CPE as part of the team to bring fresh perspective and real world

experience of bidding and managing projects?

• Do you have to take the time to open up cost books and put something together that your not real sure of, or is there better

things to be doing with your time?

• How secure would you feel in your client’s decision if they obtained free architectural drawings or free estimates from

another developer for their project?

“ Leave the estimating to us”

A detailed cost estimate is a step by step calculation of the material and

labor required to complete a construction project. This document is prepared after

analyzing the architectural, structural, elevation and other drawings of the building

and has all details about the cost, material and labor involved in a project. For

example, it will give you the exact quantity of cement bags, bricks, sand, steel and

other raw material required and the prices in your area. This information is

immensely useful in completing a construction project within the decided cost.

1.1) Negotiate well with Contractor: It is normally seen that the contractor quote hefty amount

for a construction job if they think that the home owners do not know about the internal calculations. This

document will help you negotiate a better price with your contractor. In the current market scenarios these

negotiations can save you Lacks of rupees.

1.2) Do not overpay: At the site, a lot of contractors demand money as the work progresses. It

happens in both through rate contracts and labor rate contracts. The building owners usually do not have an

idea if the work completed at the site equals to the money paid to the contractor. We have seen several cases

where Contractors intentionally quote very less compared to the market price and then leave the project

midway as soon as the money paid to them is more than their investment. Using our report you can find out

how much you should have paid for the work completed at site.

1.3) Ensure that right quantity is used in Construction: Even after the contract is signed, the

contractor may not use optimal quantity of raw material. With detailed cost estimate you will know exactly

how much material should be used at each stage of construction. You can track the material movement and

ensure that right quantity material is used in your building as per the Architect's/Engineer's specifications.

1.4) Material procurement and planning: Material prices fluctuate a lot and can have significant

impact during construction. Also, if you know the material usage, you may buy material at bulk which saves

considerable amount of money. The detailed cost estimate will tell you exactly how much material you need

at each stage so that you can procure and budget the construction material properly.

1.5) Prevent delay in project/Prevent material leakage & theft: Majority of the money wasted

in construction is due to the delay in material procurement as each material needs some time to arrive at the

site. Use our document to ensure that right quantity of material is available at the site at all time If you know

how much material would be consumed at each stage then you can relate this with the progress of project at

site. This will help you catch the pilferage or theft of the material at the site

At the inception stage the client will be interested not only in the technical feasibility but also true probable cost

for completion of the project. The knowledge of the true probable cost at the outset of a construction project is of great

importance in taking the right decision on finance and to decide priorities of the project. The quantity surveyor is best

trained to give construction cost advice at this stage of the construction project, whether it is for Macro planning, i.e., a new

town or Micro planning, i.e., a new building or road, He is also trained to provide the construction cost input into feasibility

study of a construction project. To work out true probable cost, accurate cost data in the form which is obtained by

analyzing bills of quantities of previous projects of similar nature or work out roll bills, quantities of main items of the

project which would properly weighted will represent the cost of the project would be necessary. These quantities when

priced at market rates including other factors bearing on cost will represent fair true probable cost of the project and this can

be achieved with the help of quantity surveyors. Another important aspect at this stage is assessment of correct time for

planning and execution of a project. In order to assess correct time for completion of a project, it is necessary not only to

prepare program for completion on network technique like CPM but to assess the various inputs required including financial

requirements will enable management to assess correct completion period of a project. A Quantity Surveyor will be in a

better position to help management is this area of responsibility.

The object of good design is to provide the required strength economically within the cost limit with the use of right

type of materials. Considerable thought and ingenuity are required to decide as to how to combine various materials to provide

truly economical construction. The Quantity Surveyor can help design engineer/architect in achieving the above objectives by

preparing a cost plan by distributing total available amount into various elements of a building project, such as foundation,

superstructure walls, roof, floor, joinery and finishes. With the help of Quantity Surveyor, design engineer/architect can ensure

a

design within the elemental cost or in case of a specific clement of design exceeding the target of figure either specification can

be reduced or saving is made on another element. In the present system this check is not being exercised with the result that

cost often exceeds the target figure and the basic object of economical planning/designing of a project is not achieved.

Engagement of a Quantity Surveyor who is an expert on cost control and specification will, therefore, be required to help

management in working within the cost limit and best utilization of the specialist knowledge of an engineer/architect to effect

economy at planning/design/drawings stage of a project

Hiring costs –

Hiring is an expensive process. Significant management time is invested in gathering resumes, screening

resumes, making calls to candidates, testing, scheduling interviews, conducting interviews, evaluating and

choosing a candidate, negotiating the offer, and repeating the process if the candidate does not accept. These costs

can be reduced by using consultants. This management and human resources time can be focused in areas of

greater value to the business. For the purposes of this example, no allocation for hiring costs is included.

Bad hire costs –

It costs an average of two and a half times an individual’s salary to replace an employee who doesn’t

work out, including recruitment, training, severance costs and lost productivity. More than 4 out of 10

organizations (42%) say it costs at least three times an employee’s salary.

Separation costs –

The unfortunate situation where you choose to terminate an employee creates costs for the

company. If the employee is laid off there is severance costs, If the termination is performance-based, all of the

time invested by HR and management on counseling, deliberations and termination are avoided. While incurring

these costs are not certain, by using consultants you avoid this risk. For the purposes of this example, I’ve included

no allocation for separation costs.

Soft costs are more difficult to quantify. The opportunity cost of time spent managing

employees from a human resources perspective is the most often overlooked and underestimated

employee cost. Consultants do not require a career path, training plans, performance appraisals or

counseling sessions. It is estimated that up to 15% of a manager’s time is spent in these areas. By using

consultants, management time can be focused in areas of greater potential value to the business. One

industry benchmark shows that day-to-day management and other soft costs equate to an additional 15 to

25% of an employee’s total cost. Of note, decision makers correctly consider management costs as

fixed…they are not avoided when using consultants instead of full-time employees. Unfortunately that

misses the point. I’m specifically calling out the opportunity cost of management time, which can be

focused in higher areas

The total cost of an employee making Rs 600000 per year could be approximately double – nearly Rs 1200000 per year if all hard and soft costs are included in the equation* In summary Rs 1200000 / 2305 hours is equal to Rs 520 per hour While using a consultant is definitely not appropriate for every situation, it’s not as expensive as it sometimes seems. You need to base your decision on business strategy, not hourly pay rates. Good consulting companies have the interest of the client in mind and want to keep them as a client. The growth of a company should not hinge exclusively on consultants but more as a supplement as needed to the employees they already have. ------------------------------------------------------------------------------------------------------------------------------------*Every state differs in the cost of an employee; this information is based on an average

SUVARNA CONSULTANCY SERVICES

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• SR NO PARTICULARS PROJECT SITE AT AREA UNIT ARCHITECHTS STRUCTURAL DESINER

1 KARIYA DEVLOPERS KONARK VISTA HADAPSAR 450000 SQ.FT HAFEEJ CONTRACTOR J &W (Y S SANE)

2 MIRCHANDANI GROUP

PALM RAHATANI 450000 SQ.FTMANDVIWALA QUTUB &

ASSO.HANSAL PARIKH & ASSO.

BELLAGIO UNDRI-PISOLI 225000 SQ.FTHORRIZONE

ARCHITECTS(HEMAL SHAHA) HANSAL PARIKH & ASSO.

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3 SLP DEVLOPERSKALP KHARADI 90000 SQ.FT ENVIRON AJIT GIJARE

JUBILY PARK WARAJE 325000 SQ.FT DILIP KALE STRUDCOM (INAMDAR)

4 ACROPOLIS PURPLENINE HILLS NIBM 650000 SQ.FT KIPA (KIRIT VORA) MUTALIK & ASSO.

SAINIK VIHAR NIBM 120000 SQ.FT KIPA (KIRIT VORA) MUTALIK & ASSO.

5

SAMARTHA PROPERTIESSOLLANA

DANGE CHOWK

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METROPOLE DANGE CHOWK

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6 TRIMURTI DEVLOPER TRIMURTI HEIGHTS BANER 55000 SQ.FT NILLESH SASWADE BHILLARE & ASSO.

7 AXIS PARADIGIUM   BAVDHAN 425000 SQ.FT AXIS PARADIGIUM (AJAY PANDIT)

SUHAS JOSHI

8 ABHINAV GROUP PEBBLE 02 BAVDHAN 650000 SQ.FT ABHIKALP HANSAL PARIKH & ASSO.

AND MANY MORE

Rahul Pimpale(Business Development Manager)Suvarna Consultancy ServicesMobile No. +91 8796808436Email Id. :- consultancysuvarna@gmail.com