Introduction to

Construction Estimating

The use of computers on estimating and bidding

Introduction to Construction Estimating Marcos Bastian

 In the business of design and construction,
profitability is based on accurate and complete
cost estimation

“Cost estimating is employed as one of the main tools of

successful cost management. Once an initial budget has
been established, it is important to test its assumptions by
employing a series of increasingly precise cost estimating
techniques that coincide with further development of design
and construction details.”
National Institute of Building Sciences. (http://www.wbdg.org)

Introduction to Construction Estimating Marcos Bastian

 Estimating requires a talent to
predict or avoid the
unexpected.

A good estimator understands

construction materials,
methods and systems, as well
as the labor and equipment
required to complete all tasks
in their correct sequence, on
time and on budget.

Introduction to Construction Estimating Marcos Bastian

 The structure of an estimate

Estimates are typically organized in a work-breakdown structure (WBS).

A work breakdown structure (WBS) is a hierarchical system used to define and
group discrete tasks or elements, covering the work scope of the project.

100% Rule:
A WBS must include 100% of the work defined by the project scope and
capture all deliverables – internal, external and interim.
The rule applies at all levels within the hierarchy: the sum of the work at the
“child” level must equal 100% of the work represented by the “parent” and the
WBS cannot include more than 100% of the project’s scope.

The Construction Specification Institute’s (CSI) has created the "de facto"
standard for the Construction Industry (known as MasterFormat).
The CIS has also created the UniFormat, a new design-based structure
focusing on early stages of a project planning.

Introduction to Construction Estimating Marcos Bastian

 MasterFormat
(also referred as the CSI Format)

- Created by the Construction Specification Institute CSI, 1961

- Used by nearly every business, in specifications and pricing
- Focus on materials and methods (construction approach)
- Contains 49 divisions (as of 2008)
- Better suited for pricing & construction

Example:
DIVISION 05 – METALS
05 00 00 METALS
05 01 00 Maintenance of Metals
05 10 00 STRUCTURAL METAL FRAMING
05 12 00 Structural Steel Framing

For more information

http://www.csinet.org/s_csi/sec.asp?CID=1377&DID=11339

Introduction to Construction Estimating Marcos Bastian

 Uniformat

- First introduced in 1998, Guiding Principles established in 2007

- Functional elements of a project (design approach)
- Organized in nine categories
- Better for conceptual understanding of a building
- Provides a way to compare major components of different projects

A Substructure
B Shell
C Interiors
D Services
E Equipment & Furnishings
F Special Construction
& Demolition
G Building Sitework
Z General

Introduction to Construction Estimating Marcos Bastian

 Uniformat (cont.)

UniFormat is an arrangement of construction information based on physical parts of a facility called

systems and assemblies. These systems and assemblies are characterized by their function without
identifying the products that compose them. Systems and assemblies render a view of a constructed
facility different from the view rendered by a breakdown of building materials, products, and activities
such as MasterFormat. UniFormat is intended to complement MasterFormat.
CSI – (www.csinet.org)

The purpose of UniFormat is to:

- achieve consistency in economic evaluation of projects
- enhance reporting of design program information; and
- promote consistency in filing information for facilities management, drawing
details and construction market data.

For more information:

http://www.csinet.org/s_csi/sec.asp?TRACKID=&CID=1379&DID=11342

Introduction to Construction Estimating Marcos Bastian

 Types of estimates

ROM (Rough Order of Magnitude) Estimates

- Used in strategic or preliminary planning, proforma analyses
- Used to assist go/no-go decisions
- Low level of accuracy, general in scope
Detailed Costs Estimates
- Increased accuracy
- Used to define tasks and schedules
- Based on assemblies & systems

National Institute of Building Sciences Classification

- Preliminary estimates
- Intermediate estimates
- Final estimates

Introduction to Construction Estimating Marcos Bastian

 Preliminary estimates (20% - 25% margin of error)
- Early planning stages
- Systems-based WBS (eg. Uniformat)
- May also be based on other metrics
cost/parking space, cost/hospital bed
may be referred to as “guesstimates" of “ballpark numbers”
- Feasibility focus
- Large contingency values (low confidence)

Intermediate estimates (10% - 15% margin of error)

- SDs & DDs
- Focus on systems, alternatives & comparisons
- Begin migration from ‘systems' to ‘materials & labor‘
- Frequent updates, refinement with design
- Gradual reduction of contingency

Final estimates (2% - 3% margin of error)

- For bidding, construction & control
- Multiple bidders, comparisons by major tasks/systems
- Very detailed take-offs and specifications
- Contingency reduced or eliminated
- Once construction is completed, data can be used for future projects

Introduction to Construction Estimating Marcos Bastian

 Time and Accuracy Relationship in Estimates

Data based on John D. Bledsoe’s - Concept to Bid…Successful Estimating Methods

Introduction to Construction Estimating Marcos Bastian

 Major elements of an estimate

-Direct costs (may be grouped in systems or assemblies)

Materials
Labor
Equipment

- Indirect costs
Taxes
Insurance
Bonds
Operating costs

- Overhead, profit, other markups

- Contingency
- Time & escalation
- Phasing & mobilization costs
- Geographic index

Introduction to Construction Estimating Marcos Bastian

 The use of computers
“Years ago we created estimates using a calculator and a yellow tablet.You sat down, counted the parts
and pieces, added them up and that was the cost for a job.”
Mac Crawford, Crawford Construction. Lexington KY

- The practice of cost estimating precedes the use of computers

- Because of this legacy, many of its original methods persisted even after
computers were introduced
- Computers are today an intrinsic part of the business, used not only in actual
calculations, but also in the storage, organization, retrieval and reporting of
data, as well as a collaboration tool between different disciplines
- As a result, estimates are now much more accurate and detailed, and the
industry’s requirements have also increased accordingly
- There are thousands of software packages on the market, ranging from
simple “excel-like” spreadsheet programs to complete corporate solutions.
Pricing also varies widely with the complexity of the software
- One of the greatest challenges is to migrate ‘field knowledge’ to the
computer. Experienced field professionals often rely on others to operate
estimating software.

Introduction to Construction Estimating Marcos Bastian

 Common estimating options

- Spreadsheets and manual takeoffs

“Excel is still the king”
- CAD and digital takeoff systems
- Online databases and services
BNI
R.S. Means
- Corporate software (modular systems)
- Building Information Modeling (BIM)

Introduction to Construction Estimating Marcos Bastian

 Estimating Software - Desirable Features

- Must be able to handle multiple projects (!)

- Hierarchical/WBS organization
- Detailed view per item
- Take-off system (screen-based or digitizing devices)
- Handling of complex systems and assemblies
- Items linked to cost of products & resources
(labor, materials, subcontractors, etc)
- Automated calculations
- Indirect costs, markup & overhead

Introduction to Construction Estimating Marcos Bastian

 Estimating Software - Desirable Features (cont.)

- Purchasing & contracting

- Cost comparisons (between different systems &/or providers)
- Closeout capabilities, (Manual overrides & customization)
- Reporting (links to scheduling)
- Import/export capability
- Database storage vs. flat-file structure
- Online updates and subscription
(cost data, specs.)
- Archival, backup & historic data
- * GOOD SUPPORT & DOCUMENTATION

Introduction to Construction Estimating Marcos Bastian

 To Be or not to Be(IM)
BIM Advantages
- Better coordination
- Problems identified earlier
- Hidden conflicts are discovered more easily (Structural vs MEP)
- Reduction of RFIs
- 2D Drawings are an output of model
- Produce takeoffs (debateable)

-BIM Challenges:
- Heavy requirements (processing power, storage, net traffic)
- Adoption of same technology across
different disciplines
- Existing legacy of 2D CAD
- No standards to date
- Does not replace knowledge of materials & systems
- Misconception that BIM will do the work for you

For more information: http://bim.arch.gatech.edu/?id=402

Introduction to Construction Estimating Marcos Bastian

 Conclusion

How have computers changed estimating?

- Level of detail (depth of work)

- Accuracy (takeoffs, calculations)
- Better WBS structure
- Ease of navigation (from general view to individual tasks)
- Automated recalculations (less chance for error)
- Cascading updates
- Online pricing and specification databases
- Systems integration (design, documentation specifications, estimates,
construction)
- * Field experience vs. computer literacy

Introduction to Construction Estimating Marcos Bastian

 Questions

Introduction to Construction Estimating Marcos Bastian

 Thank You!

Introduction to Construction Estimating Marcos Bastian

Introduction to Construction Estimating Marcos Bastian