CE 142-T PROJECT MANAGEMENT & CONSTRUCTION METHODS

MODULE 4 –Construction Cost Estimate

ENGR. REYNALDO S. SITJAR

CIVIL ENGINEER
CONSTRUCTION COST ESTIMATE
(A TOOL FOR HOUSING SUPPORT SERVICES)
 CONSTRUCTION COST ESTIMATE

ESTIMATE & COST ESTIMATION DEFINED

UNDERSTANDING YOUR PROJECT
TYPES OF ESTIMATION
COMPONENTS IN COST ESTIMATION
BASIC STEPS IN DETAILED ESTIMATION
TECHNIQUES IN DETAILED ESTIMATION
 DEFINITION

Estimates is a logical and sensible assumptions

of the quantities, qualities, values, or degrees of
a set of subjects.

Cost Estimation Models are mathematical

algorithms used to estimate the costs of a
product or a project. This is based on the normal
working conditions, during regular business
hours, and under average conditions.
 UNDERSTANDING YOUR PROJECT
Project Factors it is essential to the development of
effective cost management in design is an understanding of
the basic factors that influence building costs. The following
list of factors can be controlled by the design professional
but can influence the cost estimate.
Cost data can be presented in two ways: as bare costs
without overhead and profit, and total costs, which include a
mark-up for overhead and profit. There is no accounting for
unpredictable costs associated with labor resource
shortages, supply and demand cycles, or travel and per
diem cost. It is also important to understand price and crew
size, make adjustments based on experience and judgment.
 UNDERSTANDING YOUR PROJECT
Build your own database take ownership and
keep your database updated and you will be
literally guaranteed to provide a better cost
estimate. This must be tested to uncover
possible errors before they are incorporated into
the estimate.
Project Factors are as follows:
 Location
 Design Factors
 Qualitative Factors
 Contractual Factors
 Time Factors
 UNDERSTANDING YOUR PROJECT
Project Location – cost will be influenced by
such factors as climate and comfort
requirements, building codes and regulations,
case of access, distances from sources of labor
and materials.

Market Place – Construction prices are subject

to change according to the laws of supply and
demand. Over-stressed and under stressed-
construction markets will affect the level and
quality of competition as well as the prices
charged.
 TYPES OF ESTIMATION

Cost Estimates – is concerned with knowing the

probable total cost of a project.

Quantity Survey – is a preliminary estimation

technique that aims to establish the quantity of
each material for a project, not yet considering
their cost.
Productivity Estimates – is concerned with the
determination of probable cost of labor by logical
assumptions of the productivity of the workers.
 TYPES OF COST ESTIMATION

Bill of Materials – is a list of materials needed for

a project. It usually presents the probable cost for
each item.

Value Engineering – is a review of the plan and

design of a project so as to coordinate with the
sizes and specifications of construction materials.
It’s aim is to avoid wastage and maximize the use
of each material. Value Engineering is also
concerned with other items that may reduce the
cost of a construction project or speed-up the
project construction.
 TYPES OF ESTIMATION
Detailed Estimate – is an estimate that breaks
the subject down into as many items or
components possible. Each component are often
described with specifications.
Rough Estimate – is an estimate that is
computed in general and vague. It is often an
assumption by area, volume, or bulk.

Lump Sum – is an assumption of the totality of

an item without consideration of its specific
components .
 COMPONENTS IN COST ESTIMATION
1. Materials Component
2. Labor Component
3. Tools & Equipment
4. Trade Contractor or SubContractor
5. Mark - up
a. Contingency Cost
b. Administrative Cost
c. Profit
d. Variations or Extra

NOTE: The importance of understanding

variations and its impact is therefore critical in
order to successfully deliver a Project as well as
be fairly compensated.
 COMPONENTS IN COST ESTIMATION
The Quantity Surveyor’s first task, on visiting the site for
Valuation purposes, is to make himself known to the Site
Manager and ensure that he receives a full site induction
or if this is not his first visit to the site an updating of the
current site status from the Site Manager.
The QS may then tour the Works, making notes as
necessary of the extent of work done and listing the
quantities of the various materials and goods stored on
the site.  The QS will expect the Site Manager to have
produced a list of materials and quantities on site and
other documentation to assist in the formation of the
Valuation.
The PQS and Contractor’s QS will usually prepare and
agree the Valuation before leaving the site; subsequent
 COMPONENTS IN COST ESTIMATION
1. Preliminaries
Preliminaries contained within the BoQ are easily quantifiable;
those contracts which do not have BoQ can prove a challenge
and it is advisable to agree the costs of identified individual
preliminary items at the commencement of the contract or when
payment of individual preliminary items will become applicable.
Preliminaries items are of four kinds, cost-related, time-related,
single-payment or a combination of two or more of these.  The
PQS and QS will agree which Preliminary items fall into which
category at the commencement of the contract. On some
contracts the parties merely agree to consider all items to be
time related and simply divide the total costs of the Preliminaries
by the duration of the contract, such practice is not advisable
and should be discouraged.
 COMPONENTS IN COST ESTIMATION
2. Main Contractor’s Work
The value of the work completed by the Contractor will be
easily established using the unit rates contained in the Bills of
Quantities; in the case of Stage or Lump sum contracts the
Valuation will be formulated using agreed schedules between
the contracting parties.  
When valuing the Main Contractor’s work the Surveyor will start
with  the Excavation and Earthwork’ section or the Demolitions
of Works and proceed in BoQ order through all the succeeding
work sections which contain items of work which have been
wholly or partly carried out.  Each item within each section is
noted separately and a completion value assigned to it,
indicating by use of bill item references that which is included
in each amount.
 COMPONENTS IN COST ESTIMATION
3. Variations
Most projects have Variations, which present a difficulty in the
context of Interim Valuations for several reasons. The JCT Form
requires that effect be given in Interim Certificates to ‘the
measurement and Valuation’ of Variations.  Each Variation must
be valued, either approximately or accurately, as soon as
possible after issue and included within the monthly valuation
after the work has been executed; using the appropriate form of
valuing the work (this is usually the preserve of the QS).
The valuation of variations must not be left until the end of the
contract this could seriously affect cash flow and cost/value
reconciliation calculations and lead to an inaccurate prediction of
contract profitability.
 COMPONENTS IN COST ESTIMATION
4. Statutory Fees and Charges
Any charges and/or fees paid by the Contractor to any local
authority or statutory undertaker for work executed or
materials or goods supplied in the course of carrying out its
statutory obligations should be included in the next Interim
Valuation after receipt of such services.
These costs are usually included in the Bills of Quantity in the
form of Provisional Sums; any sums for profit and attendances
will be applied to the authorities’ charges.
Sums equivalent to cash discounts to the invoiced amounts
may not be added, which invariably will be net;  this exclusion
only applies to fees and charges for work done or goods
supplied in discharge of the statutory obligations of the
authorities.
 COMPONENTS IN COST ESTIMATION
5. Nominated Sub-Contractors’ work
Nominated Sub-Contractors will be informed of the Valuation
date in each month of the main contractors. Provided the QS is
satisfied of the validity of the claim; that is that the work had
been executed and any other aspects of the application for
inclusion into the main contractors Interim Valuation such as
materials on or off site, variations,  fluctuations etc  it will be
included in the next Interim Valuation. Profit and attendance
additions will be included by the Main Contractor on a pro-rata
basis to the appropriate items in the Bills of Quantities.   The
Contractor shall provide proof of payment to any nominated
Sub-Contractor of any sum included in the immediately
preceding Certificate in respect of their work, materials or
goods. 
 COMPONENTS IN COST ESTIMATION
6. Flactuations
It will be specified in the contract documentation,
Standard Building Contract with Quantities gives options
in Tax Fluctuations.
 COMPONENTS IN COST ESTIMATION
7. Retention
It is usual in all forms of the standard forms of building contract
for a percentage of the Valuation total to be deducted.  Thus,
the sum of money deducted is said to be ‘retained’ by the
Client and is called ‘Retention’.
The purpose of the retention percentage of the total value of
work completed to date is mainly to provide a degree of
protection to the Client against the effects of the Contractor
defaulting,
Exclusions retention applies to certain aspects or activities
within the contract and some contracts may have a limit on the
amount of retention held back from the Contractor.  These are
contractual matters largely outside of the responsibility of the
Site manager.
 LABOR COMPONENT
LABOR COMPONENT is usually broken down into a team
size (eg. 1 Carpenter + 2 Helpers) that can execute work at a
determined productivity.
Building a complex rate worksheet for tendering purposes
takes not only technical understanding of that element and
materials involved, but also requires historical productivity,
output records of similar projects, finishes required, market
conditions and years of estimating experience.
 Various % factors can be applied to increase or reduce the
productivity as difficulty is decided at the tendering stage.
 Once this information is extracted from the BOQ rates then
the labor allowable for all trades can be entered into a
spreadsheet; that is the team size, productivity and
quantity for each activity.
 This information will be used to compare against actual
costs.
 FACTORS TO BE CONSIDERED
IN A LABOR RATE BUILD-UP
Quantity : The quantity of work to be done is fundamental in determining labor
productivity. Smaller quantities of work dictate lower productivities as a rule, since
there is no learning curve and increased efficiencies gained from repetition.
 Finish : Smooth, rough, on grade, etc. finishes all have a significant impact on
productivity and material to be used.

Access / Location : The access constraints of a site will define what plant
will be used, if concrete should be pumped or not and if a mobile crane will be
required.

Climate : The local weather and seasons in certain parts of the world have a
major effect on productivity, material handling and placing. For example if you
work in very hot areas and you know the concrete will be cast in summer then
ice should be priced in your concrete to cool it down.

Design : A repetitive design for example in a multi storey building will

greatly improve productivity and cycle times due to the learning curve and
repetition.
 LABOR COMPONENT
Should you however not have the team detail in your priced BOQ
then simply enter the labor component and quantity into the
template.

 This information will still allow you to calculate the actual

efficiency but will not assist you in determining team sizes or
productivity required at the start of a project.

 (This will have to be established manually on site).

Projects require an engineer designed structural frame and

foundations. The three major trades involved in constructing such
a frame consist of Concrete, Formwork and Reinforcement. The
combination of these three elements significantly impacts on the
price of a project. Considering that most tenders define the wet
works (structure) of the project in detail and the finishes are
usually given as provisional sums or contingencies, stress the
importance of getting this costing right.
 LABOR COMPONENT
Once the allowable value, productivity outputs and team sizes are
captured we can start feeding in the daily costing and progress
measurement into the template.

 The site foreman is required to record the actual manpower used

each day and identify the activities and quantity of work that was
executed. For example the following information will be recorded.

 The quantity of the work measured is then entered and the

allowable value is generated. These sums compared against each
other will determine the profit or loss value for that activity.
 BASIC STEPS IN DETAILED ESTIMATION
1. Classify the general parts of the project into categories.
2. Break down each category into as many parts, works, or
materials possible.
3. Write down the specifications for each material or
component.
4. Use the round-up method for inexact figures.
5. Provide allowances for breakage, wastage, or slack.
6. Compute the materials, labor, and equipment
separately. Avoid computing by percentage of each
other. Remember that cost of labor vary significantly
from the type of work to be done.
7. Consider the rental of equipment.
8. Consider all other non-salient components and do not
simply rely on the item - “over-head cost”.
9. Unless otherwise instructed, not forget to include
contingency costs, profit, VAT, and professional and
other fees.
 WORK BREAKDOWN STRUCTURE

The best way to price these elements if you do not have a

sophisticated estimating program is to use a template
designed for this purpose. A template should allow for
adjustment of resources, material and labor costs,
outputs, material usages, hours of work, plant required,
factor options, etc. to calculate an all inclusive rate for a
particular BOQ item. By copying these sheets and
creating separate calculations for each bill item, it will
allow you to develop a very accurate record of rates that
cab be used in your next tender. Once set-up you can
simply adjust the rates by entering the new resource
prices. All the rates are instantly updated and ready for
your next tender. We offer such a template as part of the
Tendering Package.
 TERMINOLOGY

Aggregates are materials used in construction, including sand, gravel,

crushed stone, slag, or recycled crushed concrete.
Brick is an artificial stone made by forming clay into rectangular blocks
which are hardened, either by burning in a kiln or sometimes, in warm
countries, by sun-drying.
Concrete Masonry Unit (CMU), concrete block, breeze
block, or cinder block is a large rectangular brick used in construction.
Concrete blocks are made from cast concrete formed into blocks.
Cement Plaster a mixture of suitable plaster sand, Portland cement &
water which is normally applied to masonry interiors and exteriors to achieve
a smooth surface.
Mortar is a material used in masonry to fill the gaps between bricks and
bind them together.
Stucco or Render is a material made of aggregates, binder, and water
which is applied wet, and hardens when it dries. It is used as a coating for
walls and ceilings and for decoration.
 SAMPLE COMPUTATION FOR CONCRETE
PROBLEM:
Determine the number of bags of cement, amount of aggregates, and
gallons of water needed for a wet concrete mix to be poured for a 30-meter
long, 1.2 m wide, and .12 m thick sidewalk. Aggregates are moist.

SOLUTION:
Volume of concrete needed = 30 X 1.2 X .12 X 1.05 (wastage allowance) =
4.536 cu.m.

Type of Concrete Mix = Class AA

Cement = 4.536cu.m. X 10.50 bags/cu.m. = 47.628 or 48 bags

Sand = 4.536cu.m. X 0.42 = 1.90512 or 2 cu.m.

Gravel = 4.536cu.m. X 0.84 = 3.81024 or 4 cu.m.

Water = 48 bags X 5.5 gallons/bag = 264 gals.

less 2.7gal. X 6 cu.m. = 16.2gals.
264 gals. – 16.2 gals. = 247.8 or 248 gals.
 CONCRETE PROPORTIONING
CLASS AA 1 : 2 :3 (Cement : Sand : Gravel)
CLASS A 1 : 2 :4 for beams, slabs, columns, and
members subject to bending
CLASS B 1 : 2.5: 5 for members not reinforced for bending
stress
CLASS C 1:3 :6 for footing not underwater
CLASS D 1 : 3.5: 7 for other applications
MIXTURE CEMENT (in bags) SAND (in cu.m.) GRAVEL (in
cu.m.)
CLASS AA 12.00 0.42 0.84
CLASS A 9.00 0.44 0.88
CLASS B 8.00 0.44 0.88
CLASS C 7.00 0.44 0.88
CLASS D 6.00 0.45 0.90
 WATER IN CONCRETE MIX
AMOUNT OF WATER PER BAG OF CEMENT:

Type Wet mix Moist mix Dry mix

Footings / Reinf. Walls 28 liters 23 liters 19 liters (liters of

Sidewalks / Steps 21 liters 17 liters 14 liters water per
Fence Post 17 liters 14 liters 13 liters bag mix)

Approximate Quantity of Surface Water Carried by

Average Aggregates:

Aggregate Classification liters/ cu.m.

Very Wet Sand 30 – 40

Moderately Wet Sand 20
Moist Sand 10
Moist Gravel / Crushed Rock 10
 COMPUTATION FACTORS FOR CHB, MORTAR, &
PLASTER
CONCRETE HOLLOW BLOCKS = 12.5 pcs. per square meter area
of wall

VOLUME FOR MORTAR FILL = 0.0015 cu.m. per piece of 4” CHB

0.003 cu.m. per piece of 6” CHB
0.0045 cu.m. per piece of 8” CHB

VOLUME FOR MORTAR LAY = 0.001016 cu.m. per piece of 4”

CHB
(SEATER) 0.001524 cu.m. per piece of 6” CHB
0.002032 cu.m. per piece of 8” CHB

VOLUME FOR PLASTER = 0.00229 cu.m. per piece of CHB (1

side)
 SAMPLE COMPUTATION FOR CHB, MORTAR, &
PROBLEM:
PLASTER
Determine the number 4”-CHB, and amount of cement and aggregate
needed for laid and plastered (2 sides) CHB wall 10 meters in length
and 3.2 m. in height (from the finished floor level), with a 0.90m X
2.10m door and 1.20m X 2.40m window opening. Top of wall footing is
0.60 m. below the finished floor level.

SOLUTION:
Area of Wall = (10m X [3.2m+0.60m]) – (0.9m X 2.1m) – (1.2m X 2.4m) =
33.23 m2

Number of 4”-CHB needed = 33.23 m2 X 12.5 pcs./m2 = 415.375

415.375 X 1.05 (breakage) = 436.14 or 437 pcs.

Volume of Mortar Fill needed = 437pcs. X 0.0015cu.m./pc. = 0.66 cu.m.

Volume of Mortar Lay needed = 437pcs. X 0.001016cu.m./pc. = 0.444 cu.m.

Volume of Plaster needed = 437pcs. X 0.00458cu.m./pc. = 2.002 cu.m.

 TECHNIQUES IN DETAILED ESTIMATION
1. Avoid constant rounding-up. A part of one bulk of materials
can complete the lacking part of another. Allowances can be
considered after all similar items are computed.
2–½

3–¼

Computation:

2½ + 3¼ + 1¼ = 7 + allowance

instead of
1 – 1/4
2½ [3] + 3¼ [4] + 1¼ [2] = 9 +
allowance
 TECHNIQUES IN DETAILED
ESTIMATION
2. In computing the components of frames like wood nailers or
studs, round-up then add one (1).
Length to be framed = 3.00 meters
Space between nailer = 0.40 meter

Computation:

3.00m [divided by] 0.40m = 7.50 [round-up to] 8 [plus] 1 =

9 pcs.
3. In determining the space between frame components (nailer),
consider the dimension of the covering material (ceiling) to
avoid too much wastage. Ex. If the dimension of the covering
material is 1.20m, spacing can be 0.60m, 0.40m, or 0.30m.
 TECHNIQUES IN DETAILED
ESTIMATION
4. In estimating the reinforcing bars, consider the anchorage
and bends.
 TECHNIQUES IN DETAILED
ESTIMATION
5. Put in to mind the gradual changes in the spacing of ties and
stirrups.
THANK YOU