Jessie Jade S.

Duroja BSCE 4B
October 07, 2022

6.    What are the three (3) primary categories of classifying estimates? Give details
- The three primary categories of classifying estimates are:
 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.
 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. (We’ll look
at these in more detail shortly.)
 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.

7.    What are the four (4) step process that are used in creating a bill of quantities? Give details.
- The four (4) step process that are used in creating a bill of quantities are:
 Taking-Off Quantities: Working from the construction documents, a quantity surveyor
will measure the tasks and items of work in a project. This requires scaling dimensions
from drawings. One will record these in standard units such as area, volume, or length.
For example, you can quantify excavation in cubic meters and steel supports in linear
feet. It’s important to follow one of the standard methodologies, such as the New Rules
of Measurement. The surveyor will list the number of each item in the project.
 Squaring: Next, the quantity surveyor multiplies the dimensions of the component into
square area and multiplies this by the number of times this work item occurs in the
construction, thus getting the total dimensions, length, volume, and area as applicable.
 Abstracting: Abstracting is the collecting and ordering of the squared dimensions.
Similar tasks and components are grouped together. Once you have taken off and squared
all items and have obtained total dimensions, they must be merged. You make deductions
for any voids or openings in the building, such as stairs.
 Billing: This last step simply involves presenting item descriptions and quantities in a
structured format, the bill of quantities. You usually present these in a hierarchy for
group, subgroup, and work section. (Examples include substructure, earthwork, and site
clearance.)

8.    What are the elements of a construction cost estimate? Describe.

- The elements of a construction cost estimate are:
 Quantity Take-Off: Developed during the pre-construction phase, a quantity take-off
measures the materials and labor needed to complete a project.
 Labor Hour: The labor hour, or man hour, is a unit of work that measures the output of
one person working for one hour.
 Labor Rate: The labor rate is the amount per hour one pays to skilled craftsmen. This
includes not just the basic hourly rate and benefits, but the added costs of overtime and
payroll burdens, such as worker compensation and unemployment insurance. This
template will help you keep track of wages and labor hours.
 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.
 Subcontractor Quotes: Most contractors will hire multiple specialist subcontractors to
complete parts of the construction. You add these subcontractors’ quotes to the
contractor’s total estimate. (It can be helpful to use a tracker to collect all the
subcontractor documentation in one place.
 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.

9.    Give several primary factors that influences on the construction cost.
 One of the primary factors that influences cost is the building site. Waterlogged soils,
previous construction, geological formations and the nature of the rock, native animal
species, and the presence of historical or natural heritage sites are just a few of the things
that can affect materials and labor requirements, delay the issuance of permits, and
increase the time needed to complete the project. Similarly, the location of the
construction site relative to economic centers can also be significant. Contractors may
have to transport workers and materials for a long distance if the site is remote. In a
bustling urban area, the wages may be higher. Furthermore, regulatory requirements may
be stricter, and hence more expensive to fulfill or comply with, at some construction sites
than at others. Lastly, certain construction sites require the completion of feasibility or
impact studies, which are likely to prove expensive.
 Time-related aspects can also affect costs significantly. Chief among these is the project
schedule, as a compressed, labor-intensive schedule will incur higher costs and rush
charges. Shorter projects, especially those with significant penalties for the contractor’s
failure to complete the project on time, are also likely to have more expensive insurance.
Also, with a project that you expect to take years to complete, you will almost certainly
have to consider fluctuating market conditions and inflation. Finally, owners inviting bids
may notice seasonal variations in bid amounts, since contractors are busier at some times
of the year than at others.
 The size and complexity of the project are other major influences on cost estimates.
Larger, more prestigious projects may attract more reputable contractors, or there may
simply be few firms capable of handling the project. Either of these scenarios can
escalate project costs.
 The quality of plans and specifications are also vital factors, as is the contractor’s
relationship with the project engineer. Construction documents that hint at imprecision
will almost certainly result in higher bids from contractors who want to err on the side of
safety. On the other hand, the project engineer’s reputation can swing costs the other
way, since contractors will know that plans drawn by a reputable engineer are less likely
to result in efficiency losses.
  Some other factors that affect the project cost include whether a government or quasi-
governmental agency commissions or funds the project, a circumstance which may
require additional paperwork and reporting. Some large projects require the completion
of a value-engineering review before bidding commences. Value engineering, which
examines the function-to-cost ratio of a project, aims at making the design as cost
efficient as possible.

10. How much contingency is added to construction total cost?

- Finally, all cost estimates add at least a tenth, and sometimes closer to a fifth, of the
construction total to account for contingencies. Contingencies are allowances held in reserve for
unexpected costs.

11. Using historical data in construction cost estimates reliable? Why?

- Using historical data in construction cost estimates is reliable because when preparing a
cost estimate, an estimator usually relies, at least to some extent, on historical data. Though no
two projects are exactly alike, using comparable historical cost and estimate data can be an
excellent way to validate estimates. Historical data comes from a number of sources, including
catalogs of vendor data, databases, periodicals, commercial references, and digests of actual
project costs. Contractors may also look at successful past bids, assuming these proved accurate.
Regardless of what data you use, it’s critical to have reliable data, so experienced estimators
recommend using a trusted industry standard source.

12. What are the major approaches to cost estimating? Describe.

- The major approaches to cost estimating are:
 Production Function: A production function relates the amount built (the output) to
factors such as materials and labor (the input). So if you want to achieve a certain level of
output (number of square feet built), you look for the optimal input (labor hours per
square foot). Production functions can be quite accurate for forecasting input-output
relationships for projects of a particular type, and there is extensive data to draw from for
certain project types, like schools and hospitals, for example.
 Stick Estimating: Highly accurate, but incredibly time consuming, stick estimating is the
practice of determining total costs by listing, in order, the costs for every single
component of a job. The sheer amount of time it takes to produce a stick estimate invites
errors due to loss of concentration or carelessness.
 Empirical Cost Inference: This statistical method uses regression analyses to relate the
cost of construction to a model of predictors. The accuracy of this method depends on the
quality of the predictive model, so it calls for a good degree of familiarity with individual
predictors of total construction costs and a knowledge of statistical methods.
 Unit Cost Estimating: Unit cost estimating simply associate’s unit costs with each
assembly involved in a construction process. It’s fairly quick and accurate, especially if
one has used the assemblies previously, and there is evidence to justify the unit costs for
each assembly.
 Allocation of Joint Costs: You allocate costs that are difficult to assign to individual
project elements by using different mathematical formulas. For example, you can prorate
field supervision proportionally to tasks based on their share of the total basic costs.
13. What are the three primary concerns of estimating team?
The three primary concerns of estimating team are:
 How many? (quantities)
 How much? (pricing)
 How long? (productivity)

14. What is the most common way of working out labor calculations? How this to be done?
- The most common way of working out labor calculations is to use labor units. These set
out how long it takes to install each and every component across the entire project, from laying
out the foundations to building walls, installing sections of circuit on the MEP side, and the time
taken to install each individual fixture and fitting. This requires a detailed quantitative take-off to
be completed first, which will set out the requirements for each part of the job. This can then be
used in conjunction with labor rates for the different aspects of the job to produce a detailed
labor cost estimate. Still, it’s not as simple as multiplying hours required by hourly rates. There
are labor overheads and ‘non-productive’ hours to be taken into account, as well as numerous
factors that can affect the costs, such as weather, illness, site conditions, and other means of
productivity loss.

15. What is a Gantt charts?

- Gantt charts can be a good tool to utilize in labor cost estimating. These bar charts are
actually used to visually represent a project schedule, typically showing the tasks that need to be
performed sitting on the vertical axis while time intervals progress along the horizontal axis. This
can be used to ensure that the job is staffed properly, meaning there is neither a lack of capacity
nor productivity (from having too many skilled people sitting around doing nothing) at various
parts of the project. In cost estimating terms, making sure you schedule your project management
correctly can help you reduce your labor costs, allowing for a more competitive bid.