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CHAPTER 2
The Estimating Process and
Preliminary Procedures

2-1

Objectives
• Upon completion of this chapter, you
will be able to:
– Compile the goals and objectives of a
contractor’s estimating department
– Identify the sources of information about
projects out for bid
– Distinguish open bidding from closed
bidding

2-2

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Objectives (cont’d.)
– Describe the process of prequalifying
bidders and explain why it is done
– Describe contractors’ marketing strategies
and explain why these strategies are
pursued
– List and explain the factors considered
when a contractor is deciding whether or
not to submit a bid on a project

2-3

Objectives (cont’d.)
– Explain what is involved in the preliminary
review of bid documents and the use of a
query list
– Describe the purpose of the estimator’s
site visit and list the items that should be
considered on a local project and on a
remote project

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Objectives (cont’d.)
– Identify the benefits of using computers
and modern communication technology in
the estimating process

2-5

The Bid Estimating Process

• Systematic approach
– Objectives must be clearly defined
 Profitable work
 Maximizing accuracy
 Maximizing productivity
 Effective estimating department utilization
 Company-wide cooperative approach

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Figure 2.1
The Estimating Process
(Delmar/Cengage Learning)

2-7

Projects Out for Bid

• Sources of bid information:
– Public bids
 Advertisements and web pages
 Government notices
 Construction associations and news services
 Bid information services

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Projects Out for Bid (cont’d.)

– Private bids
 Invitations
 Business contracts and news items
 Architectural and engineering consultants
 Construction news services
 Construction associations plan service centers
 Bid information services

2-9

Open Bidding
• Allows all qualified contractors to bid
and be considered for award of work
– Involves publicly advertised bid calls
 U.S. government agencies use a “Pre-
Solicitation Notice (Construction Contract)”
• Construction associations
– Plan service centers
 Place where plans of projects calling for bids
are deposited

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Open Bidding (cont’d.)

• Closed bidding
– Direct bid invitation
 Avoids having a large number of bids
• Prequalified bids
– Bids from prequalified contractors only
• Construction news services
– Offer bid reporting services
 Convey project status

2-11

Open Bidding (cont’d.)

• Marketing
– Ensures company is on bid list
• Information gathering system
– Business contracts
– Constant monitoring
– Often pursued by contractors offering
construction management services

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The Decision to Bid

• Factors to consider:
– Project type
– Size and estimate of contract value
– Project location
– Quality of drawings and specifications
– Owner and designer reputations
– Specialized work

2-13

The Decision to Bid (cont’d.)

– Anticipated construction problems
– Safety considerations
– Need for the work
– Bonding capacity

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Scheduling the Estimating

Process

Figure 2.3 Project Estimator’s Schedule (Delmar/Cengage Learning)

2-15

Bid Record and Bid Documents

• Commonly recorded on a
computer file
– Preset requirements

Figure 2.4 Example of a Bid

Report (Delmar/Cengage Learning)
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Obtaining Bid Documents

• Two complete sets of bid documents
are usually requested
– Estimate documents
– Subcontractor takeoff and estimate
preparation
• Designers usually require deposits for
bid documents
– Reimbursed upon return

2-17

Review Bid Documents

• Bid documents
– Reviewed after listed on bid report
 Obtain information for completion
 Highlight needed data
 Highlight anything unusual
 Check for easily missed items
– Number may be enormous
 Some selection is unavoidable

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The Query List

• Compiled list of all questions
– Single call is made to cover all items
– Often clarified in documents
• Designers
– May encourage questions, but avoid
continuous phone calls
 Fax and e-mail communications

2-19

The Team Approach

• Estimator
– Usually works alone on quantity takeoffs
and cost estimates
 Quality is improved with input
– Should be encouraged to seek assistance
• Estimate review
– Brings team together to review work

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Site Visit

Figure 2.6 Remote

Site Visits
(Delmar/Cengage
Figure 2.5 Local Site Learning)
Visits
(Delmar/Cengage
Learning) 2-21

Computer Estimating Systems

• Computers
– Indispensable tool
– Perform many operations
– Not foolproof
– Requires understanding of basic
estimating concepts
 Can be gained by working through them
manually

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Other Technology
• Includes:
– Fax machines
– Cellular telephones
– E-mail
– Internet
– Computer-assisted design

2-23

Summary
• Estimating serves several purposes
– Preparation of bids and cost control
 Conceptual estimates: project feasibility 
 Preliminary estimates: budget control
 Detailed estimates: forecast costs accurately
• Be aware of safety requirements
– Occupational Safety and Health Administration 

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END OF CHAPTER

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