Estimation of construction costs is important to the success of any construction project as it is a key factor in planning and controlling the construction process. If the cost estimates are low, the organization may run into cash deficits during construction, while if the cost estimates are high, the organization may lose tenders. You would prefer your estimates to be as accurate as you can make it when you are a builder or contractor. Here are some tips for improving accuracy:
Gather Extensive Project Details
As such, the more information provided about the project at the start of the estimating process, the higher the chance of creating a good estimate. Always ensure you get full plans and specifications, this means that everything in the project should be included. This includes things like:
- Size of the building and its structural plan as well as the number of stories or levels in the building.
- Infrastructure that is being currently used for constructing foundations, framing, finishes, etc.
- Type of roofing
- Any specialized systems incorporated within the building which includes; Heating, Ventilation as well as Air Conditioning (HVAC) systems, the plumbing system as well as the lighting system.
- A landscape and site work was necessary
Discuss with architects, engineers, owners, and or developers to have a full understanding of the project needs. The last thing you want is changes mid-way through and having to scramble to adjust to new schedules. This can be avoided through proper communication with the client where the expectations are made clear from the start.
Analyze Historical Data
Use a copy of data previously estimated from other similar projects. These include the cost of the materials used in the construction, the equipment that is used in the construction, and the people that are involved in the construction process. Explain any actual costs associated with those projects that may have occurred since the completion of those projects.
Using cost estimator software is fast and will offer a comparison of the project specifications you input against the historical information. It grows in sophistication as more project data, on projects that have been completed, are fed to it.
Hire Specialty Construction Estimating Company
Although you might allocate the simpler buildings within your company, the complicated ones should source estimating services. Construction Estimating Companies are typically well-equipped to estimate the cost of the project across numerous types of projects.
They are armed with historical data for accurate material, labor, and equipment estimates. They also ensure that they are updating you with the current cost trends within your region of operation to ensure that estimates are revised accordingly.
This is one of the best features of most estimating companies; they do not charge very highly for the services they offer. Often, the cost of the actual estimating is offset several times over by improved accuracy of the estimate.
Develop a Detailed Cost Breakdown
Commercially, do not construct only an overall figure of merit for your idea. When you have overarching categories for break such as site work, foundations, framing, roofing, plumbing, HVAC, electrical, etc., it is always more accurate to break these costs down by trade.
When listing the cost within each trade, enter material and equipment rental as separate, and labor as a sub-cost to material. This is helpful to prevent missing out on some items, which could potentially be a major factor of a project that could significantly increase your estimate. It also helps when making changes to the estimates because some of the assumptions could also change in the future.
Use Cost Estimating Software
With the help of construction estimator software, it is possible to improve the accuracy of estimates significantly. The structure of some of these programs like MC2 and InteriCon is such that they employ a strong project database to come up with the estimates from project inputs.
The software requires the project details such as specifications, components or materials required, and the site of the project. The cost is determined by using very complicated formulae that take into consideration past performance figures. Some of the programs auto-generate CAD Services and 3D models as a part of the process!
AI advancements, in particular, have thanked the field of estimating software, making it as precise as it is today. However, even for the highest level of precision, there is still the need for the input of highly detailed project information.
Factor in Design Trends
Like any other products, construction prices are not fixed, there are changes in time and there are finishing materials that depend on the fashion trends. Make sure you use the most recent expenses when costing.
For instance, ceramic and porcelain tile products are now more popular and expensive than carpets per square foot. Pricing data relating to the tiles should not be estimated in the past. This problem is overcome by reviewing such trend reports as those produced by estimating services.
Build In Adequate Contingency
This is because construction projects are characteristically exposed to some unpredictable factors that make it impossible to come up with a correct estimate. Lack of control over costs can stem from shifts in the weather, fluctuations in material prices, problems with subcontractors, or any other factor.
You have to incorporate this into your overall estimate for the job in question or the project as a whole. It is common to have a contingency of 10-15% on the net estimate cost in new building construction. You can increase or decrease this number as per the level of complexity of a project and your confidence in the accuracy of calculations.
Effective contingency management ensures that one is not caught off guard by a situation like an over-expenditure during the construction phase. Contingency funds, therefore, theoretically, if not used, become additional project profit in the long run!
Confirm Accuracy
The way to enhance estimating is by comparing estimates to final actual costs as evidenced by the number of completed projects. Also write down the preceding estimate, over or under, in the items where the estimate was reached. Determine which of the factors led to the falsifications in cost between the planned and real scenarios.
Introduce these lessons learned into the subsequent methods for developing the subsequent estimate. The last actual costs are also entered into the historical database that Construction Cost Estimator software uses to correct itself.
With regular double-checking and updating of accuracy confirmations and related data or processes, your estimates will get more and more accurate as time goes on.
Conclusion
It is not a simple task but when done right will translate to the success of the project through correct cost estimations of construction costs. Some of the essential components that need to be embraced to enhance the accuracy of cost estimates include; obtaining as many project details as possible before commencing with the estimate, using historical data where possible, obtaining specialty estimating services, subdividing cost estimates based on trades, applying state of art technology, trending, and allowing sufficient contingency. Analyzing such costs with planned costs helps identify areas of improvement on other completed projects. The good thing is that with the application of these best practices, there is always room for improvement on the estimating part. It is possible to construct economically, and in doing so, attain the utmost of profit that a building could yield.
