COST ESTIMATION ,

RATE ANALYSIS &

SPECIFICATION
 COST ESTIMATION

• ESTIMATION : Estimation requires a through knowledge

of construction , cost of materials , labour , in addition to
the skill , experience etc.

• It consist two task (1) Determining probable cost (2)

Determining probable time

• COST ESTIMATE : Cost estimate = quantity of item

multiplied by unit cost of the item
NEED OF ESTIMATING AND COSTING

• Estimate gives an idea of cost of the work , idea of time

required .

• Estimate is required to invite the tender .

• It is also required to control the expenditure , and decides

whether the proposed plan matches the funds available
or not .
 Procedure of estimating
and costing

• Preparing detailed estimates .

• Calculating the rate of each unit of work .

• Preparing abstract of estimate.

• DATA REQUIRED :

• 1.Drawing 2. Previously executed similar

projects 3. Scale of present project ,
locations , availability of funds and resources .
4. Specifications , rates of each unit of work .
• ESTIMATOR : An estimator is expected to work more closely with all
project participants to predict a more accurate estimate . We must be
able to see the details of project ,quantity of materials and prevailing
market rates etc .

• Through understanding of drawings , specifications ,class of work

and materials.

• Construction project cost

• Project cost= direct cost + indirect cost (overhead cost )

• Direct cost (DC): The cost and expenses that are incurred for a specific activity
are termed as direct cost (material, labour , equipment ).

• The cost that are spent on a specific activity can also be classified as :

• 1. Time related cost : Cost spent or incurred along the activity duration .

• 2. Quantity proportion cost : Cost spent or incurred in proportion to the

quantities consumed.

• 3. Fixed cost : Cost that are often incurred once at a specific point of time.
• Indirect cost (IDC): 1. SITE OVERHEAD 2. GENERAL OVERHEAD
• SITE OVERHEAD: It is site related cost like establishment of offices at site,
housing for project staff, store and first aid . It also includes the cost of
items that are not directly related to a specific work package. Generally
site overhead is estimated as 5-15 % of total direct cost.

• GENERAL OVERHEAD : These are the cost that cannot be linked to a

specific project but are used to support the overall company activities .
eg. salary of lawyers , directors etc. generally general overhead cost can
be estimated as 2-5% of direct cost .
Thank you
Specification
 Specification
• The general meaning of specification stands for specific
description of a particular subject.

• An engineering specification can be defined as the detailed

description of all workmanship and materials which are required for
execution of work in accordance with the drawings .

• Since the drawings provided not furnish the details of different

items like the quality and quantity of materials and workmanship , it
is imperative to convey all these relevant data for materials and
workmanship in a separate contract document which is known as
specifications.

• The specifications combined with drawings define the structure

completely .

• Specification is an essential part of engineering contract.

 Objectives of specifications
• The specifications clearly illustrate the quality of materials , the workmanship
desired and method of doing workout serves as a guide to the contractor as
well as supervising staff to the best satisfaction.

• As the rate of work is based on the specifications , this enables the contractor
to quote the contract rate of work in a tender.

• The specification clearly describes quality and quantity of different materials

required for construction work, the contractor can arrange the same in time
and complete the work within scheduled time. It also gives opportunity for the
owner to check the quality of materials conforming to specifications avoiding
any dispute with the contractor.

• The Total cost of the project is governed by specifications.

• It also specifies the equipments ,tools and plants to be engaged for work and
thus enables to procure them before hand.

• Specification is essential and legal contract document and is required for court
cases or arbitration .
Preparation of specification

• As the specifications play an important role in the

execution of quality work ,they must be
concise ,clearly worded and free from any ambiguity
anywhere from the study of specifications, one can
easily understand the nature of the works and what
the work shall be.

• It must convey the complete information in order to

avoid any dispute and must be straightforward to be
easily understood by contractors.

• It should be fair to both the parties and all likely

difficulties and hazards should be mentioned.

• Two types of specifications :- 1. General specification

2. Detailed specifications
• General specifications : very short description of
different parts of work specifying materials, proportions , quality
etc in general terms. It serves as guide to prepare the approximate
estimated cost of work. This does not form a part of contract
document . e.g. : for foundation and plinth work in a building shall
be of first class brickwork in 1:6 cement mortar over 1:4:8 cement
concrete.

• Detailed specifications :it specify the qualities,

quantities , and proportion of materials , the method of
preparation and execution and method of measurement of work .
The detailed specification of different item of work are prepared
separately and described what the work shall be and how they
shall be executed and constructed . They must be written clearly
in compact and concise form avoiding repetition and ambiguity .
The detailed specifications form an important part of contract
document and they are legal document for arbitration or court
cases.
Thank you