Construction Finance Management

Summary Week 1

Construction Cost Estimating, Cost Control,

and Quantity Takeoff
Design In The Construction Industry
Construction Design Spectrum
It is important to understand the construction design process and
how it relates to cost management and estimating project costs.

Following design stages are explained in the next screens:

• Order of Magnitude (OOM)

• Schematic Design (SD)
• Design Development (DD)
• Construction Design (CD)
Overview of Design Stages
Design Stages – Order of Magnitude
Design Stages – Schematic Design
Design Stages – Design Development
Design Stages – Construction Design
601 Lexington Avenue – Case Study

The most interesting fact about this

building is that it contained a major
design flaw. The major columns were
placed in the center of the building, not
on the edges, to accommodate the
location of a church.
So, large structural steel beams had to
be created much later, spanning eight
floors within the building, in order to
support the structure.
601 Lexington Avenue – Cost vs.
Phase
The entire building had to be re-welded without any knowledge of any
of its occupants or for the greater population of Manhattan. The welds
were completed afterhours and came to a total cost of $8 million in
1978, which adjusts for roughly $30 million in 2016.
Tips in Design Understanding
Types of Cost Estimates
Types of Cost Estimates
All estimates are approximations based upon judgment and
experience where the estimator first builds the project on paper, and
then assesses quantities not only of the contracted materials, but also
of the temporary materials, e.g. formwork, temporary plant, etc.
considering various alternative methods of construction.

Types of Cost Estimates

Conceptual and Preliminary
Estimates – Cost Indices
Cost indices is a price of a total constant package of resources,
construction resources that serves as input to a typical construction
project. The index is computed by dividing this cost, the cost of the
index by the cost of the resources in a base reference period. This
will allow us to show changes in cost over time.
Cost Indices Computation and
Limitations

Differing resource proportions,

Productivity, changes in technology,
differing projects
competitiveness of contractors, geographic
and demographic factors, etc.
Conceptual and Preliminary
Estimates – Cost-Capacity Factor
Cost-Capacity Factor – Examples
Conceptual and Preliminary
Estimates – Component Ratios
Conceptual and Preliminary
Estimates – Parameter Costs
Detailed Estimate (Steps)
Step 1: Break Project into Cost Centers:
• Earthwork, Concrete, Structural Steel, Brick & Masonry, Electrical,
Painting, Insulation, Construction Equipment, etc.

Step 2: Estimate Quantities:

• Estimate the following per cost center:
• Physical items: Perform quantity takeoff
• Nonphysical items: Builder’s risk insurance; amount of the required
bonds, etc.

Step 3: Price out Quantities:

• Price out quantities from step 2 using historical data, supplier catalogs,
and other sources

Step 4: Calculate Total Price:

• Calculate for each cost center by multiplying the required quantities by the
unit price.

Types of estimates: engineer’s estimate, contractor’s estimate

Quantity Takeoff and Measurement
Measurement – What?
Measurement – Why?
Measurement – Who?
Measurement – Examples
Measurement – Purpose

Let’s now look at measurements with regards to façades, masonry,

glass curtain walls, and floor and wall finishes.
Measurement / Quantity Take-Off
Façade
Façade (Windows)
Masonry
Quantifying Masonry Walls
Glass Curtain Wall

Cost estimation considerations:

Finishes
Wall Finishes
Common Types of Wall Finishes
Measurement Recap
Cut and Fill
Cut and Fill Takeoff
Cut and Fill Software
Deep Foundations
Constructions with Deep Foundations

New York London

Sydney Abu Dhabi

Construction Piles
Construction Caissons
Deep Foundations
Concrete Foundations
Concrete Foundation
Concrete Mixing
Concrete Slump
Concrete Curing
Concrete Break Tests
Concrete Takeoff
Concrete Reinforcing
Standard Rebar Sizes
Concrete Formwork