Construction Cost

Estimation and
Control (CE-734)
Mr. Shoaib Muhammad

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Design-Bid-Build
• Design-Bid-Build is a project delivery system where the owner hires a
designer (usually an architect or engineer) to design the project fully.
After the design is complete, the project is put out for competitive
bidding. Then, a separate construction contractor is selected to build
it based on the completed design.
Advantages: Disadvantages:
•Longer project duration (sequential
• Clear roles and responsibilities
steps)
• Competitive bidding can reduce costs •Less collaboration between designer
• Well-understood and widely used method and contractor
•Potential for disputes if design issues
arise during construction

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Design-Build
• In the Design-Build method, the owner hires one entity (a design-
build firm or team) to handle both design and construction. This
integration allows for faster delivery and better collaboration.
completed design.
Advantages: Disadvantages:
• Faster project completion •Less control for the owner over the
design
• Reduced risk for the owner •Potential for fewer checks and
• Better communication between designers and builders balances

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Construction Management at
Risk (CMAR)
• In CMAR, the owner hires a Construction Manager (CM) early in the
design phase. The CM provides input during design and then acts as
the general contractor during construction, usually under a
Guaranteed Maximum Price (GMP).
• Advantages: Disadvantages:
• Early cost estimation and input •Can be more expensive than DBB
•Requires a more involved owner
• Fast-tracked schedules
• Collaborative process

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Estimating in
Construction
• Estimate is defined as “to roughly calculate or judge the value,
number, quantity, or extent of”.
• A cost estimate is the “approximation of the cost of a program,
project, or operation”.
• Building construction estimating is the “determination of
probable construction costs of any given project”.
• Estimate is prepared before the actual construction.
• In the DBB delivery system, it is necessary for contractors to
submit a competitive cost estimate for the project.
• Prepared from the contract documents:
• Plans
• Project manual (contract documents, technical specifications, etc.)
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Estimating in
Construction
• Quantities of estimates are used for:
• Establishing project budget
• Procuring materials/services
• The estimated quantities and their associated projected
costs will become the basis of project controls in the
field.
• Estimates consist of:
• Direct cost (material, labor, equipment, or subcontracted
items)
• Indirect cost (general conditions or project overhead costs)
• Regardless of the variables (direct or indirect) involved,
the estimator must strive to prepare as accurate an
estimate as possible.

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Estimating in
Construction
• Provides the general contractor an
acceptable rate of return (profit
margin) and compensation for the
risk associated with the project.
• How to set profit rate/ratio?

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Working Drawings &
Project Manual
• Working Drawings: usually contain information relative to the design, location, dimensions,
and construction of the project.

• Project Manual: is a written supplement to the drawings and includes information pertaining to
materials and workmanship, as well as information about the bidding process.

• The working drawings and the project manual constitute the majority of the contract
documents, define the scope of work, and must be considered together when preparing an
estimate .
• The two complement each other, and they often overlap in the information they convey. The
bid submitted must be based on the scope work provided by the owner or the architect

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Whose responsibility
is it to prepare
estimate?
• Client?
• Contractor?
• Consultant?
• The role of delivery method/contract type
in setting out the responsibility.
• In DBB?
• In DB?
• In CM?
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Conceptual Estimate

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Types of estimates
• Detailed estimate
• Determines the quantity and cost of everything
required for the project, including:
• Materials
• Labor
• Equipment
• Insurance
• Bonds
• Overhead
• Profits*, Etc.
*considering the investment, the time to complete, and the complexity of the project
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Types of estimates
• Assembly estimate
• Bid by groups of components (assemblies)
• Useful for conceptual and preliminary estimates
• For example, a light switch would include:
• Single-gang box
• Single-pole switch

• Cover plate

• Two wire nuts

• 20 feet of wire
QUEST LANDSCAPE ESTIMATOR Software:
• Is assemble estimate equal to subcontract estimate? http://www.sabatsoft.com/so_civil-LandscapeContractors-
content.html
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Types of estimates
• Square-foot estimates
• Bid based on an average cost per square foot
• May be adjusted for:
• Building height
• Building perimeter, etc.

• Sometimes, a unit other than square footage

is used. E.g., Parking garage are measured by
the number of parking stalls.

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Types of estimates
• Parametric estimates
• Parametric estimates use equations that
express the statistical relationship
between building parameters and the
cost of the building. Bid based upon the
statistical relationship between building
components may include:
• Square footage
• Number of floors
• Length of perimeter
• Percentage of the building that is common
space
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Types of estimates
• Model estimates
• Prepares an estimate based upon the answers
to a number of questions
• Questions for the slab on grade portion of the
building might include:
• What is the thickness of the slab?
• Does the slab have wire mesh?
• Do you want fire sprinklers?

• Experiential and experimental details help

populate the model
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Types of estimates
• Project comparison estimates
• Prepared by comparing the costs of a proposed project
to a similar completed project
• Adjusted for difference between the comparison
project and the project being estimated
• For example, an estimate for the buildings in an
apartment project may be prepared from a project
built using the same plans during the previous year in a
nearby city. In this example, the prices from the
completed project need to be adjusted for inflation,
changes in the availability and cost of labor, changes in
the plans made to meet city codes, and so forth .

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Estimating
opportunities
• Architectural offices • Government
• Engineering offices • Professional quantity
• Subcontractors surveyor
• Material suppliers • Freelance estimators
• Manufacturers’ • Residential construction
representatives • Computer software
• Project management

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Quantity Takeoff Skills
• Read and quantify plans
• Knowledge of math and geometry
• Patience
• Does careful, thorough work
• Computer literate with takeoff software
• On-Screen Takeoff
• Paydirt for cut and fill

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Additional Estimating
Skills

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Types of Bids
Competitive Negotiated

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Contract Documents

• Agreement
• General conditions
• Supplementary general conditions
• Working drawings
• Specifications
• Addenda

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Bid Information
• Publicly advertised in:
• Newspapers
• Trade journals
• Engineering New Record (ENR)
• Associated General Contractors
• Internet
Included in the advertisement is a description of the nature, extent, and location of the project;
the owner; the availability of bidding documents; bond requirements; and the time, manner,
and place that the bids will be received.

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Sources of Information
• Historical data
• Best source

• Construction cost guides

• Averages for a few contractors

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