An estimate of the cost of a construction job is the probable cost of that job as computed from plans and specifications.
As a quality of a good estimate the, actual cost of the proposed work after completion should not differ by more then 5 to 10 % from its approximate cost estimate, provided there are no unusual, unforeseen circumstances.
Contents:
- What is ESTIMATION?
- NEED FOR ESTIMATE
- Estimation in Civil Engineering
- Operational estimating
- Unit rate estimating
- Engineer\’s Estimate
- Who is estimation Engineer?
- Recommendation for an Estimation Engineer
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What is ESTIMATION?
The definition of estimation can be understand as :
Estimation is the scientific way of working out the approximate cost of an engineering project before execution of the work.
It is totally different from calculation of the exact cost after completion of the project.
Estimation requires a thorough Knowledge of the construction procedures and cost of materials & labour in addition to the skill , experience, foresight and good judgment.
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NEED FOR ESTIMATE
Feasibility
1. It help to work out the approximate cost of the project in order to decide its feasibility with respect to the cost and to ensure the financial resources, if the proposal is approved.
Requirement of Material
2. Requirements of controlled materials, such as cement and steel can be estimated for making applications to the controlling authorities.
Calculate Cost
3. It is used for framing the tenders for the works and to check contractor’s work during and after its execution for the purpose of making payments to the contractor.
Planning and Scheduling
4. From quantities of different items of work calculated in detailed estimation, resources are allocated to different activities of the project and ultimately their durations and whole planning and scheduling of the project is carried out.
Estimation in Civil Engineering
There are two alternative approaches to estimation in civil engineering i.e. operational and unit rate. Operational estimating considers a parcel of work as a package; in contrast, unit rate estimating is where prices for bill of quantities items are each calculated separately.
Operational estimating
Civil engineering works have taken a broader brush approach to estimating, due in part to the nature of many civil engineering projects where large quantities are involved as well as extensive use of mechanical plant. In the case of civil engineering works different approaches to carrying out the works can have a significant effect on prices.
All the resources needed for parts of the construction are considered together, instead of in isolation.
Examples of where this approach is successfully used are:
- Excavation and disposal
- Concrete work, and
- Drainage.
There is no hard and fast rule where operational-based estimating techniques stop and unit rate estimating begins.
In fact, it can be difficult to reconcile works priced on an operational basis with a bill of quantities.
However, operational estimating is suitable for design and build tendering when the contractor can use their own approach and no bills of quantities have to be submitted.
Unit rate estimating
A price is calculated for each item in the bill of quantities as if the item is to be carried out in isolation to the rest of the works.
This is the traditional approach for pricing the majority of building work. Unit rates will need to calculated by the estimator for directly employed labor and take into account the following.
Engineer\’s Estimate
In Civil Engineering construction projects, the competitive bid is submitted by number of contractors taking part in tendering process and is mostly prequalified for determining the quantity and type of work a firm is capable of.
These bids are compared with engineer’s estimate which is prepared keeping in view of all the aspects of cost analysis including market escalation and localized rates.
Any technical mistake in engineer estimate in terms of under-estimate or over-estimate would either delay the project or would cause inefficient use of funds including corruption and illegal means.
Mostly in consulting organizations responsible for preparation of engineer’s estimate hire experienced individuals that are not only aware of the historic cost data but are also aware of market trends and all the gamesmanship of finance managers.
The engineer’s estimate is prepared either by considering the estimate of a recently awarded contract cost or either by considering the actual required performance of work including current competitive market costs of labor, equipment, material, production quality and rates etc.
The inclusion of overhead and profits in engineer’s estimate is very important to make it realistic and helpful for the quality and standard of finished product.
Confidentiality of the Engineer’s estimate is also very important and is helpful for the healthy competition among bidders. The engineer’s estimate should never be made public or opened to traffic.
Who is estimation Engineer?
As the name suggests; an estimation engineer who would probably be a civil engineer would be responsible in preparation of estimates for future or incoming projects and also involved in decision making for current and existing projects.
A thorough knowledge of field work and know-how of steps and resource requirement for undergoing a construction job is a must for an estimation engineer. The average annual salary according to payscale.com is 120,000$ with minimum of $25,166.
Mostly the job title of estimation engineer is also taken as proposal & estimation engineer. The Estimation engineer must also have a fully understanding of complete bidding documents including review of tender documents ensuring their completeness. He is the one fully responsible for a fair and flawless bidding process for all the projects in a company.
He is the one who has to clarify any sort of ambiguity and uncertainty raised by the contractors. The estimation engineer is to be fully equipped with all the estimation methods and jobs including formulas and softwares used for estimation.
Recommendation for an Estimation Engineer
An estimator can take one item to be paid and for start he can take an item having high usage and cost and then create a detailed cost based estimate for that item.
Research the item (find out the production rates for the item from several different types of projects), get current material prices, labor and equipment used to construct the item, current industry labor rates ( average these rates is ok), find out what equipment it takes to construct the item.
This will begin your estimate file and can be used/ modified for the next time this item needs to be estimated. Do one item each month or at least one item /quarter.
Before long you have built a good estimate history file. The most important benefit form cost based estimating is that you acquire a knowledge that few people have, no one can take away from you, and is very beneficial to your job resume if you should decide to work within the private sector.
