CEng 134n: Quantity Surveying

Module 01: Estimation

Lesson 1.1 ESTIMATION

Lesson Overview
Estimation is a vital process to determine the probable cost of a construction project.
Although it might not be exact, its goal to achieve a realistic and close to actual cost
so that the client may be able to plan ahead their financial management. This lesson
introduces Estimation to the students as well as discusses the factors that affect it,
and the general process of estimation.

By the end of this lesson, the student must be able to discuss the various methods
in estimation.

What is Estimation?
In any construction project, money is involved. More specifically, it has its own cost
that should be lower or equal to the Owner’s or Client’s financial budget for that
project. This cost should be determined prior to starting the execution of the project,
otherwise, the cost may overshoot the budget which will not be beneficial to the
owner or client. To determine the cost, a cost estimate has to be prepared. A cost
estimate is a document that reflects the probable cost of materials, labor, and
equipment as well as indirect costs such as administrative costs, that will be
necessary in order to execute and complete the construction project. To do this, one
has to go through the Estimation Process.

Estimation
Estimation is the process of determining the quantity and cost of a material, labor,
or equipment based from the approved and agreed upon contract documents for
construction. The more technical term for this process is Quantity Surveying,
however, the more common term used in the industry is Estimation. The person
tasked to perform the estimation or quantity surveying is called an Estimator or a
Quantity Surveyor.

The goal of performing an estimation is to achieve a realistic cost for a construction

project. However, this does not imply that an estimate is exact to the last centavo.
What this means is that an estimate may be able to determine a close to exact cost
but still has a margin of error due to changes in cost or availability of materials that
may happen during the execution of the project. Regardless, the process of
performing estimation is vital to determine whether the cost is within the budget of
the owner or the client.

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 CEng 134n: Quantity Surveying
Module 01: Estimation

Factors that Affect an Estimates

Prior to discussing the process of estimation, it is best to know the factors that will
affect the estimates which are the (A) Degree of Accuracy of the estimates, and (B)
Considerations during the estimation process.

A. Degree of Accuracy
In all estimation works, a certain degree of accuracy is required which can be
classified depending on its effect to the duration of the process and the degree of
error between the estimated cost and the actual cost. These classifications are (a)
Detailed Estimates and (b) Rough Estimates.

a. Detailed Estimates
Detailed Estimates refers to the accuracy by which all or majority of the items of
the project are thoroughly quantified and costed. This means that either each
and every item has to be counted in order to determine the total cost or some of
them could be added as a percentage increase in the total cost.

If each and every item is quantified, the duration of the process will be lengthy
which consumes a large amount of time, however, its degree of error between
the estimated cost and the actual cost will be lesser since all items were properly
costed. On the other hand, if some items are only added as a percentage, the
duration of the process will be shortened, however, the degree of error between
the estimated cost and the actual cost will depend on the accuracy of the
assigned percentage.

Detailed Estimates can also vary depending on how meticulous the estimator is.
An example of this concept is the consumption of a material so that there is so
little waste by the end of the project. Although this will consume more time, the
resulting cost is more accurate.

b. Rough Estimates
Rough Estimates refers to the accuracy by which a general cost per area is used
to calculate the total cost of the project. The general cost per area is derived from
past or current projects similar in nature handle by the company or other
companies. Although this takes the least amount of time, this entails a huge
degree of error between the estimated cost and the actual cost. Thus, rough
estimates are only advisable for initial costing of a project and is not suitable to
determine cost for contracts and basis for executing a project.

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Module 01: Estimation

B. Considerations
Another factor that may affect the estimates is the various considerations that is
added to the quantified materials, labor, and equipment which may differ from one
estimator to another as well as based on the property of the material used. An
example of which is considerations for an increase of materials due to its orientation
or due to the positioning of the off-cuts. Another example is consideration for material
losses due to poor handling. Without these considerations it may turn out that there
might be a lack of materials during the actual execution.

Estimation Process
Every estimator has their own approach to doing the Estimation thus creating
variations is the process of doing estimation work. For the intents and purposes of
this course, we will be utilizing these steps as our approach to the estimation
process.

A. Plan and Specifications Reading

The first step in the estimation process is the reading of the working drawings and
specifications book. It is vital for an estimator to know how to read the working
drawings as well as the specifications book. These will contain the various items to
be estimated and their requirements necessary for the estimates which include
measurements, positions, material to be used, as well as material specific
requirements.

B. Quantity Take-off
The second step in the estimation process is the quantity take-off. This step involves
the determination of the quantity of the materials, labor, and equipment necessary
for the completion of the project.

Generally, quantities are determined by calculating the geometric property, i.e.

length, area, or volume, of a material or work area for labor and equipment and
multiplying it to the required unit or rate for each material, labor, or equipment.
Required Unit or Rate vary depending on the material, labor, or equipment to be
quantified. The most common of which are available lengths and sizes, area
coverage and required material per unit of measure. These require units or rates will
be tackled on succeeding lessons.

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Module 01: Estimation

The approach to determining the quantities may vary. However, there are three
generally categorized approaches that are used in this step.
a. Direct Counting Method, as the name implies, involves counting an item directly
from the working drawings. This is normally used for items that are linear in
nature such as timber and steel as well as point based items such as doors and
windows. Although it is called Direct Counting Method, this will still require some
mathematical skill especially on item that have specific properties, such as
spacing, and limitations, such as length of materials.
b. Area Method involves the calculation of a quantity of a smaller area that will fit
a larger area. An example for this is the quantity of tile to be used on a room
c. Volume Method involves the calculation of a quantity required to achieve a
specific volume. An example for this approach is the quantity of cement bags
required for concrete columns.

C. Cost Calculation
After determining the quantity of the material, labor, or equipment, the process
proceeds to the third step which is the calculation of the cost per material, labor, or
equipment. The cost for the item is not set in stone. This is usually determined by
performing a process called “Canvassing” which involves requesting for the cost for
each item to one or more stores and determining its average, which is referred to as
Cost per Unit. This cost per unit is then used to calculate the cost for each item by
multiplying It with the determined quantity.

D. Preparation of the Cost Estimates

The fourth and final step of the process is to prepare the cost estimates. This step
involves the summarization of the cost of materials, labor, and equipment, which are
categorized as Direct Cost, as well as the addition of Indirect Costs that is normally
added as a percentage to the Direct Cost, which includes taxes, administrative cost,
utilities and the likes that are required for the operations during the construction.

The completion of the Cost Estimates marks the end of the estimation process.

End of Lesson