Part 1

ESTIMATE
Engr. James Bryan Mabini
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What is Construction Estimating?

Construction estimating is the process of anticipating

the expense of building a physical structure. This step is
essential, and one of the most crucial in the construction
process. Estimators need to be as accurate as possible
because profit margins (the livelihood of contractors) are
impacted if any estimated direct and indirect costs for
the project are off by even the slight amount. Every
successful project starts with a precise and accurate
cost estimate. By the end of this article, you will know
the basics of estimating and learn the importance of its
role in delivering successful commercial construction
projects. 
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Why is the Estimate Important?

Accurate estimates win new projects and business for

companies. In the bid estimation phase, construction
documents, take-offs, and other direct costs are used to
allow the estimator to determine an 
approximation on job costs. Customers and builders are
concerned about the price of a project because of the
financial impact of expenditure overrun and the failure
of project completion. It is in the interest of BOTH parties
to spend time researching and estimating the expenses.
No one wants to lose money, and construction
estimating provides a useful tool in project
management. 
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Cost Estimating Key Components

Cost estimating on a project is typically responsible for

the project estimator, manager, or other staff depending
on the type, size, and scope of the project. Each project
is different so that an estimator will look at the take-off
to measure materials, time, and labor. Cost estimations
are the total costs and expenses of a project from start
to finish. There many ways to classify expenditures, but
great estimators will categorize them into direct and
indirect costs.
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Cost Estimating Key Components

Direct costs are costs and expenses that are accountable

directly for a specific activity in construction work. Some
examples of direct costs are:

– materials
– field workers (labor)
– equipment
 Lesson 4 Part 1 Estimate

Cost Estimating Key Components

Indirect costs are expenses of items that are not

allocated directly for specific construction activities.
These are called overhead costs.  Examples of project
overhead expenditures are:

– quality control
– security costs
– utilities
– administrative costs
– temporary structures
– legal fees & permits
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Cost Estimating Key Components

Quality control -in construction typically

involves insuring compliance with minimum standards
of material and workmanship in order to insure the
performance of the facility according to the design.
The quality control process in construction includes 5
key steps:
• Define and communicate acceptable criteria.
• Create an inspection plan.
• Use checklists and notes to conduct inspections.
• Correct deficiencies and verify acceptance criteria.
• Analyze to prevent future deficiencies.
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Cost Estimating Key Components

Security Costs - means all fees, costs, expenses, stamp,

registration and capital taxes incurred by the Company
(or any other member of the Group) in connection with
the execution and registration of the Security
Documents.

Utility Costs - shall include costs for electricity, power,

gas, steam, oil or other fuel, water, sewer and other such
services for the Property, including sales or other taxes
thereon. Utility Costs means expenses for electricity,
gas, other heating and cooking fuels, water and sewer.
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Cost Estimating Key Components

Administrative Cost - Head office or administrative costs

might include; property costs, finance charges on loans,
insurances, staff, taxes, external advisors, marketing and
tendering activities.

Temporary Structures
- Field Office for Engineer
- Bunkhouse,  a building containing the sleeping quarters of
workers on a ranch.
- excavation support systems, underpinning, scaffolds,
bracing and shoring, formwork, falsework, work platforms,
decking, roof protection and structures used in on-site
contractor facilities.
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Cost Estimating Key Components

Legal fees and Permit - Attach File

construction fees and permit dpwh.pdf