ESTIMATING

IMPP
161

Luke 14, 28-30

Suppose 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?
29
For if he lays the
foundation and is not able
to finish it, everyone who
sees it will ridicule him,
30
saying, 'This fellow
28

Henry IV, Part II

When 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
model
In fewer offices, or at least desist
To 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 smyths 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 nonconforming/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. builders bill)

Plant
Minor plant e.g. small tools,
wheelbarrows if not supplied by subcontractor 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