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John Ray D. Cuevas ACTIVITY 12/3/18 CE42-B06 1. What Is The Purpose of Estimating?
John Ray D. Cuevas ACTIVITY 12/3/18 CE42-B06 1. What Is The Purpose of Estimating?
CE42-B06
Construction cost estimating is the process of forecasting the cost of building a physical structure. Project
owners use cost estimates to determine a project’s scope and feasibility and to allocate budgets. Contractors
use them when deciding whether to bid on a project. You usually prepare estimates with the input of
architects and engineers to ensure that a project meets financial feasibility and scope requirements.
A good cost estimate prevents the builder from losing money and helps the customer avoid overpaying. It’s
a core component of earned value management, a project management technique that tracks a project’s
performance against the total time and cost estimate.
General
a. Design Estimates: These estimates, prepared during a project’s pre-design and design phases, start with
an order of magnitude estimate, or screening estimate, which determines which construction methods and
types are most feasible. Next comes the preliminary estimate, or conceptual estimate, which you base on
the schematic design. Then comes the detailed estimate, or definitive estimate, which you base on design
development. The last of the design estimates is the engineer’s estimate, which you base on the
construction documents. A simple template can help give an initial assessment of costs involved in a
project.
b. Bid Estimates: Contractors prepare bid estimates when bidding to construct the project. Contractors will
draw from a number of data points to prepare their estimates, including direct costs, supervision costs,
subcontractor quotes, and quantity take-offs.
c. Control Estimates: Prepared after one signs a contractor agreement and before construction gets under
way, the control estimate functions as a baseline by which you assess and control actual construction costs.
The control estimate also allows contractors to plan ahead to meet upcoming costs and determine the
project’s cost to completion.
Specific
Preliminary cost estimate is also called as abstract cost estimate or approximate cost estimate or
budget estimate. This estimate is generally prepared in initial stages to know the approximate cost of
the project. By this estimate, the competent sanctioning authority can decide the financial position
and policy for administration section. Preliminary estimates are prepared with reference to cost of
similar type projects in a practical manner.
b. Plinth Area Cost Estimate
Plinth area cost estimate is prepared on the basis of plinth area of building which is the area covered
by external dimensions of building at the floor level and plinth area rate of building which is the cost
of similar building with specifications in that locality.
k. Lang method
A method that is slightly more detailed and therefore needs some more project information is the
so-called Lang method. Its basis is the equipment prices free at site, of which it’s best to have
quotations. The method differentiates for solids, liquids and mixed solids/liquids.
l. Hand method
This method, developed by W.E. Hand, is an extension of the Lang method and proposes to use
different factors for each type of equipment (columns, vessels, heat exchangers and other units)
rather than per process type. Hand’s factors exclude indirect field costs (IFC), home off ice costs
(HOC), and the costs for OSBL facilities, all of which must be estimated separately.
3. Identify the different cost components of a construction project.
The capital cost for a construction project includes the expenses related to the inital establishment of
the facility:
Material Prices: Since the cost of materials is prone to fluctuation based on market conditions and
such factors as seasonal variations, cost estimators may look at historical cost data and the various
phases of the buying cycle when calculating expected material prices.
Equipment Costs: Equipment costs refer primarily to the cost of running, and possibly renting, heavy
machinery, such as cement mixers and cranes. It’s important to note that the equipment in use
influences how quickly you can complete the project, so the use of equipment actually impacts many
costs outside of those directly associated with running the equipment.
Indirect Costs: Indirect costs are expenses not directly associated with construction work, like
administrative costs, transport costs, smaller types of equipment, temporary structures, design fees,
legal fees, permits, and any number of other costs, depending on the particular project.
Profits: Of course, in order to make a profit, the contractor adds a margin on to the cost of completing
the work. Subcontractors do the same when preparing their own quotes.
Contingencies: Since even the most accurate estimate is likely to be affected by unforeseeable
factors, such as materials wastage, an estimate will usually have a predetermined sum of money built
in to account for such added costs.
Escalation: Escalation refers to the natural inflation of costs over time, and it’s especially vital to take
into account for long-running projects. Some projects have escalation clauses that address how to
handle this inflation.
Bonds: An owner will usually require a contractor to arrange for the issuance of a performance bond
in favor of the project owner. The bond functions as a kind of guarantee of delivery. Should the
contractor fail to complete the project according to the terms of the contract, the owner is entitled to
compensation for monetary losses up to the amount covered by the performance bond.
Capital Costs: Capital costs are simply the costs associated with establishing a facility. These include
the following: the cost of acquiring land; the cost of conducting feasibility studies and the pre-design
phase; paying the architect, engineer, and specialist members of the design team; the total cost of
construction, which covers not just materials, equipment, and labor, but also administrative, permitting,
and supervision costs, as well as any insurance fees or taxes; the cost of any temporary equipment or
structures that are not part of the final construction; the cost of hiring a commissioner; and the cost of
inspecting the structure when it’s near completion.
Operations and Maintenance Costs: More a concern for the owner than the contractor, one
accounts for operations and maintenance costs during the design phase. Making choices that lower
the total lifetime cost of a building may result in higher construction costs. Operating costs include land
rent, the salaries of permanent operations staff, maintenance costs, renovation expenses (as needed),
utilities, and insurance.
Variances: Owners will often allocate construction budgets that are larger than cost estimates
because even good, thorough cost estimates have a tendency to underestimate actual construction
costs. This can happen for a number of reasons. For example, wage increases, which can be difficult
to forecast, will make construction costs rise. Seasonal or natural events, such as heavy rainfall, may
call for action to protect construction or restore the construction site. Large projects in urban areas may
face regulatory or legal issues, such as a demand for additional permitting. And lastly, owners who
begin construction without finalizing the project’s design will over-budget to account for design
changes and the inevitable cost increases that result from throwing a project off schedule
4. Describe the process of estimating by using flowchart or schematic diagram.
CE142-B06
Identify and briefly describe the different construction equipment used in the following:
1. Backhoe
4. Wheeled Excavator
6. Dragline Excavator
5. Conveyers
7. Scrapers
4. Trucks
Used for loading, hauling, dumping, and spreading
loose materials.
8. Wagons
3. Vibratory Compactors
It is similar to tamping foot rollers except that they A concrete plant, also known as a batch plant or
utilize pads shaped as segments of a circle instead batching plant or a concrete batching plant, is
of feet on the roller drum. equipment that combines various ingredients to
form concrete.
7. Tampers or Rammers
It can also be used for mixing asphalt.
2. Concrete Pumps
2. Mobile Screeners
3. Pavement Profilers
G. CRANES
1. Mobile Cranes
F. ROCK EXCAVATION
1. Jaw Crusher
The tower crane is a modern form of a balance A loader crane or a folding boom crane is a
crane. When fixed to the ground, tower cranes will hydraulically powered articulated arm fitted to a
often give the best combination of height and lifting trailer, used to load equipment onto a trailer.
capacity and are also used when constructing tall 7. Overhead Crane
buildings.