Knowledge of the construction estimating process is an essential requirement for remodeling businesses and contractors. It enables them to give a close estimate of the expenses expected to their clients before undertaking a construction or remodeling project. The better is a business at estimating costs, the more competitive it can be in the market in terms of pricing. Here are the steps in the construction estimating process that can assist you in predicting the cost of various projects.
Planning Phase
The first step in the construction estimating process is the planning or pre-design phase. It involves listing all the requirements of the project being undertaken. The drawing and layout of the project, its detailed specifications, and the time allocated for completing the project are gathered. All these details assist in determining the scope of the project. The larger is the scope of a project, the more expensive it will be. The location of the project and the legal expenses should also be factored in. Simply put, the planning phase involves mentally building the project before actual construction begins.
Itemization Phase
The second step in the construction estimating process is the itemization phase. It involves recognizing all the items that will be required for the work being undertaken. Items can be classified based on the layout of the structure (such as foundation/substructure, roof, etc.) as well as the nature of the items (electrical, plumbing, etc.). There are various standard classification methods used in the industry that you may have to comply with like the Elemental Method. You can also itemize based on the subcontractors you have contracted for the work.
Quantifying Phase
The third step in the construction estimating process is the quantifying phase. The quantity of all the items required for the construction is determined. It can either be derived from the documentation or calculated from the drawings of the project. The latter requires an- understanding of mathematical formulas and comprehending the plan, size, and scale of the drawings. It is known as the take-off process. While the manual calculation of quantities can be time-consuming and tiring, there are software available that can automate take-off. Waste and conversion factors must be considered while calculating quantities. Precisely calculating the quantities of items is important for determining the cost of the project accurately.
Pricing Phase
The next step in the construction estimating process is the pricing phase. The cost of items required for the project is calculated by multiplying their quantity by rate. These can include materials, equipment, and labor. Experienced contractors and subcontractors have their own list of rates for determining prices. If you are starting a new business or don’t have access to such a list, then consult one of the Construction Cost Guides available. These guides contain industry-wide average rates for all items required in construction. Additional expenses such as insurances, subcontractor costs, social security contributions, bonds, and sales tax must be factored in the pricing phase. Contractors and remodeling businesses may also want to add their profit margins to the calculated prices before they present their bids to clients.
Review and Bidding Phase
The final phase in the construction estimating process is review and bidding. You must always double-check your estimates to verify their accuracy. It is quite possible to miss a major item during the process. You can also compare your figures with projects previously completed or another estimator’s review. Once verification is complete, you can present the data to the clients as a final report for bidding.
