INTRODUCTION TO

ESTIMATING

Ts. NURUL ASRA ABD RAHMAN

CENTRE OF STUDIES,
CONSTRUCTION
FSPU, UiTM
INTRODUCTION TO ESTIMATING
 “method of calculating the price of an element to
get total amount of each project”

- conducted mainly in the tender and cost planning as

well as cost control.

INTRODUCTION TO ESTIMATING
 a. Consultant Quantity Surveyor
b. Contractor

* Consultant Quantity Surveyor - prepare the

initial estimate of the project to determine
the initial cost of the project as well as to control the
clients’ budget in order to give the value for money

* Contractors- prepare an estimate for tender purpose in

order to offer the price for construct and
complete the project.

INTRODUCTION TO ESTIMATING
 Estimates are based on the interests of affected parties such
as:-

a. Client
Ascertain the price of a project before it
is implemented so that any adequate provision can be made

b. Contractor
The exact budget will be prepared in order to offer the price to
construct and complete the project.

If too high - it is difficult to obtain project contracts.

If too low - may be a loss during the course of employment.

INTRODUCTION TO ESTIMATING
 Differences Between Contractor Estimates

a. Prices of materials available from supplier

b. Salaries and employee skills
c. Method of work done
d The way to manage the company
e. Percent gain the desired

The cost also differ from one place to another even for the
same type of project due to the factor of transportation, labour
available, the requirements and conditions of the construction of
a place etc.

INTRODUCTION TO ESTIMATING
 a. Getting quotations (quotation) from the Building
Materials Supplier.
b. Obtain quotations from Subcontractors Labour force
c. Get a quotation from Specialist Subcontractors
d. Get a quotation for the purchase / rental
of machinery and equipment
e. Compute the price for each element of work based
on the information - the information available at
the top.
f. Etc. (eg claims payments, cost control etc)

INTRODUCTION TO ESTIMATING
  Unit price is the price of any items/elements given after the
calculation of the several items including the prices as follows:-

a. Labour
b. Price for materials
c. Plant and Machineries
d. Profit and Overhead

INTRODUCTION TO ESTIMATING
a. Labour
- Cost of labour are as follows:
a. basic salary
b. over time
c. bonus
d. allowance
e. insurance
f. EPF
g. Facility (accommodation, electricity, transportation, etc)

 Skilled worker
 Unskilled worker
 Handyman/expert/Foreman
 Normal force (choose by the subcontractor)

**** Labour Output

The time needed to complete the work. A factor whereby cannot be fixed
permanently due to weather and the ability of workers. To calculate the
labour output, one has to take the average time spent in previous
projects.
 b. Prices of Materials
 The original price of building materials/Initial price materials
 Transportation costs
 Storage prices
 Wastage

The initial price is changed from time to time and from one
place to another place. Factors like location, the current
market, government policies and demand may affect initial
material prices. Therefore in doing estimating one must use
materials in the current market. Price of materials can be
obtained from catalogues, brochures and suppliers.

Some of the cost must allow for wastage to recover all the waste in
broken materials, missing, destroy, etc. We must give some
allowances while doing estimating. Different types of materials
normally have different percentage of wastage.

INTRODUCTION TO ESTIMATING
 c. Plant and Machineries
 Prices for rents
 Cost of repair damage caused by the machinery
 Fuel consumption for machinery
 Prices for drivers and workers who handle the machinery

 Non-motor equipment  Motor equipment

a. Scaffolding a. Lorry
b. Wheel barrow b. Excavator
c. Backhoe
c. Tools like scoops, hammer
d. Tractor, etc.
d. Tapes

 The equipment can be obtained in two ways:

a. Rent
b. Purchase

INTRODUCTION TO ESTIMATING
 wheelbarrow
scaffolding

hammer

excavator
 backhoe Concrete mixer

Concrete mixer bulldozer

 The things one should consider are:
a. The rental cost or purchase cost and depreciation of value in every
plant and equipment.

Equipment Rental Cost Per Hour

(RM)
Concrete mixer 14T RM 6.00

Concrete 7T RM 3.00

Backhoe (case) RM 35.00

Bulldozer RM 60.00

b. The price of repair and the price to replace the damage plant.

c. Fuel consumption such as petrol and diesel including hydraulic oil and
grease.
 d. Profit and Overhead

 Overhead is a fixed expenses that must be expended to manage

the construction contractors

 To stay in this industry, the contractor must complete the project

but also must take advantage on the profit of every project he
established.

 The actual percentage to be employed by the contractor in the

calculation is self-determine, taking into account various factors.
Typically, the rate of profit and overhead is 10% - 25% of the cost
of each item of work.

INTRODUCTION TO ESTIMATING
 d. Profit and Overhead (Cont’d)
Profit is calculated by using the percentage from the total of materials,
labour, plant and equipment costs. This added profit is known as gross
profit. Gross profits are such as
 Net profit –real profit
 Overhead - Cost management of contractors

Management cost is the payment that should be paid to staff

who manages the company. Basically management cost would
include:
 Salary and office expenses such as staff and officer’s
 Interest for loan and credit term
 Office rental and equipment cost inclusive telephone, electrical
and water bills
 Income tax
 Vehicle and transportation allowance
 Fee for supervisor, engineer and technician.

INTRODUCTION TO ESTIMATING
 THANK YOU….
INTRODUCTION TO ESTIMATING